Facebook Q2: $18.68B revenue, up 11% YoY, net income $5.18B, up 98% YoY, as DAUs rise 12% YoY to 1.79B, MAUs rise 12% YoY to 2.7B; stock up 7%+
Facebook, Inc. (Nasdaq: FB) today reported financial results for the quarter ended June 30, 2020. — “We're glad to be able to provide small businesses …
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Context & Ripple Effects
Facebook's Q2 print lands at the end of a visible deceleration curve: quarterly revenue growth ran 42% in Q2 2018, then 28% in Q2 2019, and the last reported quarter before this one saw a stock drop of 5%+ on slowing user gains. At 11% YoY revenue growth, this is Facebook's slowest headline quarter in the covered arc — yet the market bid the stock up 7%+ anyway.
The reason is the composition: DAUs and MAUs both jumped 12% YoY to 1.79B and 2.7B — an acceleration from the 8-9% user growth of the past two years — while net income of $5.18B nearly doubled YoY. Usage is outrunning monetization right now, and investors read that as pent-up ad revenue rather than decay.
First-order effects
Facebook's revenue-per-user compressed this quarter — revenue grew 11% against 12% user growth — meaning the surge in daily and monthly actives was not immediately matched by ad pricing or load.
Investors who punished the stock after the Q4 report reversed course, bidding shares up 7%+ on the margin resilience behind the slower top line.
Second-order effects
If engagement stays elevated into subsequent quarters, Facebook has room to raise ad load or pricing against a larger active base — the Q3 report later showed exactly that, with revenue growth rebounding to 22% YoY ($21.47B) on roughly flat 12% user growth.
Competing ad platforms face a larger, more engaged Facebook audience bidding for the same advertiser budgets, pressuring rivals' effective CPMs wherever their reach overlaps.
Third-order effects
The pattern points toward ad-supported platforms being judged less on quarterly revenue growth than on the spread between audience expansion and monetization — with Facebook demonstrating it can hold profitability through a monetization trough and reaccelerate on top of a bigger user base.
A sustained gap between usage growth and revenue growth signals structurally cheaper reach for small businesses — the constituency Facebook's own release highlights — reshaping how ad budgets are allocated across platforms.
The trend: Large ad-platform earnings are entering a phase where audience-growth inflections matter more to the market than headline revenue deceleration, because monetization can be repriced onto an enlarged base later.
Wow - Mark Zuckerberg absolutely going off on the media and politicians in Facebook's Q2 earnings call. Says there's a “fundamental difference” between how people “actually experience” our services & “the impression you get if you just read much of the commentary about Facebook”
We have said from the beginning that we never expected to make a dent in Facebook's pocket book, but rather to send a message to their conscience. Today just reminds us that they continue to profit from hate. https://www.cnbc.com/...
Facebook provides some Q3 guidance reflecting the #StopHateForProfit ad boycott, essentially claiming “nothing to see here” (and lumps it in with other factors) https://investor.fb.com/... https://twitter.com/...
Zuck makes the argument that FB is an important American success story/site that has made going through the pandemic easier. His voice seems to plead for gratitude for what they built. “We do not profit from misinformation or hate. We do not want this content on our platforms.”
FB is legendary. They manage to find new human beings in every corner of the world (except China bcs they only want fair competition in the US)to use their products for the first time every single quarter. It is almost like billions of people reject the sentiment in Washington.
Facebook references the coming release of Apple's iOS 14 and its restrictions on tracking users across apps as having “increasingly significant” impact on ad targeting https://www.theinformation.com/ ...
to those who scoff at the second point, his argument would was: Imagine going through this pandemic two decades ago without the internet. People probably wouldn't stay in touch, and small businesses would go out of business without Facebook's products
Facebook just reported earnings and they are good. Analysts expected FB revenue would grow only about 2.5% year-over-year given the coronavirus. It grew 10%. Revenue was ~$18.7 billion. Stock is up like 5.8% https://investor.fb.com/... https://twitter.com/...
FB's quarterly DAU/MAU chart never fails to make me chuckle. No matter what levers FB needs to pull, they'll never allow that ratio to dip below the 66% level. https://twitter.com/...
“Facebook said it counts 3.14 billion monthly users across its family of apps, compared to 2.99 billion in the previous quarter.” Per yesterday's hearings... How many were sham accounts? https://www.cnbc.com/...
Just crazy seeing the two different worlds between Facebook's business performance and its public relations, governmental, and internal problems. https://www.cnbc.com/...
The one-two punch here is quite something. These financial results only underscore and prove the points of the investigation. While overall GDP has been decimated, Big Tech is grabbing an ever-larger share of what's left. Consolidation of money and power on fast forward. https://…
stronger privacy regulation, historic antitrust scrutiny, an advertising boycott and a severe economic contraction caused by a pandemic and facebook still made that coin https://twitter.com/...
The bigger news IMO is this: FB says revenue in the first three weeks of July was also up 10%. That was with thousands of advertisers boycotting the platform. The boycott still looks terrible for Facebook, but doesn't appear to be doing much damage... https://twitter.com/...
Revenue: $18.69B Users: 2.7B for FB monthly, 3.14B for all FB apps So far in 3Q they are seeing similar trends of about 10% rev growth, taking into account economic headwinds and “the impact from certain advertisers pausing spend on our platforms related to the current boycott.”