Facebook reports Q4 revenue of $21.1B, up 25% YoY, and net income of $7.4B, up 7% YoY; DAUs rose 9% YoY to 1.66B, MAUs rose 8% YoY to 2.5B; stock drops 5%+

Facebook, Inc. (Nasdaq: FB) today reported financial results for the quarter and full year ended December 31, 2019.

Facebook 2020-01-30

Context & Ripple Effects

A year ago this quarter looked very different: Facebook closed 2018 with $6.9B in Q4 net income, up 61%, and the stock jumped more than 11% on the print. The 2019 close inverts the reaction — revenue still grew 25% to $21.1B and users kept climbing, but net income growth collapsed to 7%, and the stock fell over 5%.

The gap between the two prints is the story: after a year in which headcount had grown 42%, expense growth caught up with revenue growth. The market is repricing Facebook from a hypergrowth company to one whose margins, not its user curve, set the verdict.

First-order effects

Investors punish the deceleration directly: 7% net income growth on 25% revenue growth signals costs are scaling faster than the ad business, so the same top line now buys a falling stock instead of last January's rally.

Second-order effects

The slowdown forces a search for new levers — product experiments like the planned full-screen immersive video player replacing the News Feed in select international markets are attempts to defend engagement and ad inventory as DAU growth settles into single digits.
Cost discipline becomes the earnings narrative: with MAU growth at just 8%, subsequent quarters live or die on whether expense growth can be bent back below revenue growth rather than on user additions.

Third-order effects

If the pattern holds, Facebook's valuation regime shifts permanently from user-growth multiples to margin management — though the arc isn't linear, as Q2 2020's 11% revenue growth shows the deceleration deepening before Q4 2020's 33% rebound restores it.

The trend: Facebook is crossing from hypergrowth into a maturing advertising franchise where quarterly stock reactions hinge on expense control and engagement products rather than user-count headlines.

Discussion

@joshconstine Josh Constine on x
Facebook's 2019 expenses grew $47B, up 51% vs 2018. Content moderation & safety costs are strangling the golden goose https://twitter.com/...
@kashhill Kashmir Hill on x
Facebook is paying $550 million to settle a class action lawsuit brought in Illinois, where residents are protected by the nation's strongest biometric privacy law. https://www.nytimes.com/...
@sarahfrier Sarah Frier on x
Facebook beat on revenue and profit and user numbers, but the stock is falling. It's the slowest growth ever.
@mjb_sf Melinda Byerley on x
My followers know I predicted this in 2016. Here's my next prediction: fraud lawsuits for fake traffic. https://twitter.com/...
@cpen Carolyn Penner on x
@MikeIsaac I can't even imagine what the next decade for zuck looks like. Disliked, understood, and ??
@danielnewmanuv Daniel Newman on x
Facebook is growing, but not by enough. Revenue per user is actually better with just $FB than all of its apps. That is a problem for sure. Interesting year ahead for the company -> Facebook stock falls after showing 51% rise in expenses https://www.cnbc.com/... #Earnings #FB htt…
@hoarsewisperer @hoarsewisperer on x
Facebook has spent much of the last decade willfully divorcing itself from the abuse of its platform by bad actors because it was more profitable. That was what this was always about. Facebook would rather see democracies fall than reduce its gluttonous profits. https://twitter.c…
@mikeisaac Rat King on x
Facebook settles class-action biometric privacy case for $550 million, the largest ever U.S. privacy lawsuit payout ever. w/ @natashanyt https://www.nytimes.com/...
@slpng_giants @slpng_giants on x
Here's the real reason why @Facebook isn't interested in moderation or fact-checking: https://twitter.com/...
@twadhwa Tarun Wadhwa on x
Another way to look at this is that until recently Facebook had been ignoring and passing on to the public the costs of safety and moderation. Their previous profit calculations were incomplete and misleading, they don't know the economics of running their platform “safely” yet. …
@profgalloway Scott Galloway on x
Facebook earnings — net negative for society; Zuck will be w/us another 70 yrs & can't be removed from office; they don't show up to hearings, refuse responsibility; w/Sandberg, top 2 individuals to profit the most while doing the most damage. w/ @jchatterleyCNN @CNN @firstmove h…
@scobleizer Robert Scoble on x
@SeeReason @0x100e Wild. Not enough huge profits. https://www.techmeme.com/...
@joshconstine Josh Constine on x
Facebook warns the world's sudden interest in privacy will hurt its ad targeting & revenue, even as user grow: -GDPR & California's CCPA -Anti-targeting in browsers, iOS, & Android -Fb's own privacy tools (some mandated by FTC) https://techcrunch.com/... https://twitter.com/...
@kantrowitz Alex Kantrowitz on x
Facebook daily active users in Canada and US, a key metric for the business, are going up https://twitter.com/...
@sarahfrier Sarah Frier on x
For Wall St it's always concerns about future growth. FB has already expanded to most of the world's internet-connected population. Now, it needs to spend more to find its next big biz model, after news feed ads. (this isn't because of spending on content moderation etc.)
@mikeisaac Rat King on x
the reason the shares are sinking is b/c expenses surged to 12 billion bucks — part of FB's plan to continue spending huge on “securing the platform”, per Zuckerberg margins are going to shrink b/c of that for the foreseeable future
@thekenyeung Ken Yeung on x
Facebook's Average Revenue per User (ARPU) jumped from $7.37 in Q4 2018 to $8.52 in Q4 2019 worldwide. In the U.S./Canada, ARPU went from $34.86 in Q4 2018 to $41.41 in Q4 2019. https://twitter.com/...
@joshconstine Josh Constine on x
Facebook shares plummet because profits grew just 7% in 2019 compared to 61% in 2018 https://techcrunch.com/...
@thekenyeung Ken Yeung on x
Seems that much of Facebook's Q4 2019 growth was in Asia-Pacific and the rest of the world, not Europe, the U.S., or Canada. https://twitter.com/...
@mattrosoff Matt Rosoff on x
Facebook $FB has a new metric I've never seen before in its deck: Family Daily Active People and Monthly Active People. Measures usage across FB, Instagram, Messenger, Whatsapp. https://s21.q4cdn.com/...
@thekenyeung Ken Yeung on x
Facebook considers “family” metric as its estimates of the number of unique people using one or more of its products (Facebook, Instagram, Messenger, WhatsApp) — but not Oculus. https://investor.fb.com/...
@thekenyeung Ken Yeung on x
Facebook: $21.08 billion in total revenue. $7.349 billion in net income $2.56 EPS 1.66 billion DAU (+9% YoY) 2.50 billion MAU (+8% YoY) 2.26 billion family daily active people (DAP) 2.89 billion family monthly active people (MAP) https://investor.fb.com/...
@mattrosoff Matt Rosoff on x
Unclear why Facebook shares are off so much. Expecting a big beat? https://twitter.com/...
@tonyromm Tony Romm on x
it does not matter how many agencies investigate Facebook or lawmakers threaten to regulate it, the company continues to make truck loads of cash money, per latest earnings https://investor.fb.com/...
@joshconstine Josh Constine on x
Facebook introduces new stat, Family Average Revenue Per Person, to mask how revenue might be shifting from Fb to Instagram https://techcrunch.com/... https://twitter.com/...
@joshconstine Josh Constine on x
Facebook will pay $550M to settle an Illinois class-action suit over its facial recognition Tag Suggestions feature, though penalties could have reached $35B https://techcrunch.com/... https://twitter.com/...

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