Facebook Reports 35% YoY Increase in Revenue in Q3 2021

The social media giant Facebook reported its third-quarter (Q3) results on Monday. It generated USD 29.01 Billion in revenue, a significant increase of 35% since last year’s same quarter. The company posted a net income of USD 9.1 Billion in this quarter, a 19% year-over-year (YoY) growth. It delivered USD 3.22 earnings per share (EPS), beating Wall Street expectations.

Facebook’s daily active users increased by 6% YoY to an average of 1.93 Billion users, while its monthly users were reported to be 2.91 Billion in this quarter, up by 6% since last year. The tech behemoth mentioned in the earnings reports that the capital expenditure surpassed USD 4.5 Billion in the quarter ending on September 30^th, 2021. Amidst the COVID-19 pandemic, the company reported a 20% YoY increase in the headcount.

“We made good progress this quarter and our community continues to grow,” said Facebook’s CEO Mark Zuckerberg in a statement. “I’m excited about our roadmap, especially around creators, commerce, and helping to build the metaverse.” Facebook is planning to spend USD 10 Billion on its Reality Labs to make the vision of metaverse come to life.

Facebook released its earnings report midst the whistleblower wholesome controversy. The critical comments by whistleblower France Haugen on how the company prioritizes profits over safety have put it on the hard spot. She also shared documents with the Wall Street Journal, which includes Facebook’s internal memos, and testified before Congress against it. Meanwhile, Zuckerberg defended the company’s efforts saying that “a coordinated effort to selectively use leaked documents to paint a false picture of our company.”

Future Growth

The aggregator of social media apps said that it expects its fourth-quarter (Q4) revenue to be between USD 31.5 Billion and USD 34 Billion. Facebook also addressed that it “reflects the significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple’s iOS 14 changes, and macroeconomic and COVID-related factors.” Last week, Snap, Inc. reported its earnings report while witnessing a slump of 27% in its share price due to the long-term impact of Apple’s privacy policies on its advertising segment.

“We expect 2021 total expenses to be in the range of $70-71 billion, updated from our prior outlook of $70-73 billion. We anticipate our full-year 2022 total expenses will be in the range of $91-97 billion, driven by investments in technical and product talent and infrastructure-related costs,” said Facebook’s CFO David Wehner in the outlook commentary. He added the capital expenditure of 2022 to be between USD 29 Billion and USD 34 Billion.

Facebook’s Share Didn’t Dwindle

On Monday, the company’s shares were trading up 1.3% even though many news outlets shared the articles on the leaked documents. “Yes, we’re a business and we make a profit, but the idea that we do so at the expense of people’s safety or wellbeing misunderstands where our own commercial interests lie. The truth is we’ve invested $13 billion and have over 40,000 people to do one job: keep people safe on Facebook,” Facebook’s spokesperson said.

The company mentioned its earnings report that it’s announcing USD 50 Billion share buyback. Moreover, it already has purchased USD 14.37 Billion of Class A stock and had USD 7.97 Billion share repurchase remaining on its earlier authorization. Facebook doesn’t pay dividends so an alternative way to provide a high ROI on investors’ investments.