Facebook Reports 56% Revenue Gain in Q2

Facebook reported strong results in the second quarter, but it was helped by Apple not rolling out iOS 14.5 and its more stringent privacy permissions until April 26. Chief financial officer David Wehner acknowledged the company is bracing for the “headwinds” to come. Revenue of $29.1 billion for the quarter was up 56% from $18.7 billion in the second quarter of 2020, with nearly all of it coming from advertising ($28.6 billion), as always. Wehner said in a statement that growth in ad revenue during the period was driven by a 47% year-over-year increase in average price per ads, along with a 6% rise in the number of ads delivered. He expects ad revenue growth for the remainder of 2021 to continue to ride those year-over-year price hikes. The company reported net income of $10.4 billion, slightly more than double the $5.2 billion it posted a year ago. Wehner projected that Facebook’s year-over-year total revenue growth rates will “decelerate significantly on a sequential basis” in the third and fourth quarters. “We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter,” he explained. “Facebook has been doubling down on building meaningful social commerce experiences across shoppable posts, conversational commerce and live shopping experiences," Emplifi president and chief of strategy Yuval Ben-Itzhak told Adweek. “After years of focusing on the top of the marketing funnel—activities with reach and engagement metrics—Facebook is finally investing further into conversion opportunities with ecommerce.” The social network’s user base continued to grow. Facebook reported 2.9 billion monthly active users as of June 30, up 7% year over year, and an average of 1.9 billion daily active users in June, also up 7%. However, the uptick in users does not necessarily translate into more creators on the platform. “Access to the platform will continue to be a huge hurdle for Facebook,” The Social Element social media strategist Elizabeth Koenig told Adweek. “What makes the creator space so interesting is how much access people across the world have to cameras and the internet. … While [CEO Mark] Zuckerberg is thinking long term about the metaverse, until there is true access to the technology, it will be a metaverse of elite creators only.” Monthly active people on the company’s family of applications increased 12% compared with the second quarter of last year to 3.5 billion, while daily active people went up at the same rate, reaching 2.8 billion. "We had a strong quarter as we continue to help businesses grow and people stay connected," Zuckerberg said in a statement. "I'm excited to see our major initiatives around creators and community, commerce and building the next computing platform coming together to start to bring the vision of the metaverse to life." Indeed, Zuckerberg set the wheels in motion for his metaverse vision earlier this week, as Facebook Reality Labs head Andrew Bosworth introduced a new Metaverse product group to be led by Instagram vice president of product Vishal Shah. Facebook Gaming vice president Vivek Sharma was tapped to lead the Horizon team and Oculus veteran and Facebook Gaming vp of play Jason Rubin leading the content team. “Facebook's worth already crossed $1 trillion a month ago, so Zuckerberg talking like the new king of the metaverse ahead of his earnings call isn't surprising," Koenig said. "He is priming investors by taking a leading voice in explaining the tech investments that have been happening for a while now. Naming it and making it sound aspirational puts Facebook in a good light while the company is continuing to fail at misinformation control around politics and the pandemic, as well as falling usage stats (in the first quarter of 2021).” Into the Metaverse: Facebook Reality Labs Forms a New Product Team

Earnings Reports

Facebook Reports 56% Revenue Gain in Q2, but Apple iOS 14.5 ‘Headwinds’ Are Blowing

The social network totaled 2.9 billion monthly active users, up 7% year over year

David Cohen

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