Social media platform provider Facebook Inc (Nasdaq: FB) reported they blew away the first-quarter earnings and revenue estimates of analysts. The company also revealed a spectacular increase in the average price per ad and the number of ads delivered. Following the exceptional results, the stock soared 7.30% or $22.41 to close at $329.51.
The Menlo Park, California-based Facebook, reported first-quarter revenues of $26.171 billion, an increase of 48% from $17.737 billion in a similar quarter last year. Facebook attributed the considerable growth in revenue to a 30% year-over-year rise in the average price per ad and a 12% increase in the count of ads delivered.
For the quarter ended March 31, 2021, the company posted a net income of $9.497 billion, or $3.30 per share, up 94% from $4.902 billion, or $1.71 a shared quarter ended March 31, 2020.
Analysts surveyed by Refinitiv had anticipated the company to report earnings of $2.37 per share on revenues of $23.67 billion.
Commenting on the quarterly results, Mark Zuckerberg, Facebook founder, and CEO said, “We had a strong quarter as we helped people stay connected and businesses grow.”
Segment-wise,
- Advertising revenues increased 46% y-o-y to $25.439 billion.
- Other revenues were $732 million, an increase of 146% from last year.
Facebook reported daily active users (DAUs) of 1.88 billion (on average) for the quarter ended March 2021, up 8% on a y-o-y basis. Analysts polled by FactSet anticipated a DAU of 1.89 billion. Likewise, monthly active users (MAUs) rose by 10% y-o-y to 2.85 billion in the first quarter. The consensus estimate was 2.86 billion.
Furthermore, family daily active people (DAP) were 2.72 billion, increasing 15% on a y-o-y basis. Also, family monthly active people (MAP) increased 15% y-o-y to 3.45 billion.
Most importantly, the company reported average revenue per user (ARPU) of $9.27, higher than the $8.40 per user forecast by FactSet.
Operating margin increased to 43% in the first quarter, from 33 % in the prior-year period.
Provision for income taxes rose to $2.006 billion in 1Q 2021, from $959 million in the year-ago period.
During the first quarter, capital expenditures, including principal payments on finance leases, were $4.42 billion. Cash and cash equivalents and marketable securities were $64.22 billion at the end of March 31, 2021. Facebook’s employee count was 60,654 at the end of 1Q 2021, up 26% from last year.
The company anticipates Q2 revenue growth on a y-o-y basis to stay stable or slightly increase compared to the first quarter.
Facebook expects FY 2021 aggregate expenses to be in the range of between $70 and $73 billion, an increase from the earlier guidance range of $68 to $73 billion.
The company has clarified that investments will lead to a year-over-year increase in infrastructure, technical and product talent, and consumer hardware-linked expenses.
Facebook forecasts FY 2021 capital expenditures between $19 billion and $21 billion, down from the earlier forecast range of $21-23 billion.
Most capital expenses are related to investments in data centers, network infrastructure, servers, and office facilities. Facebook also anticipates FY 2021 tax rate to be in the high-teens.
The robust quarterly result is expected to keep the stock bullish in the days ahead.
The price chart provided underneath indicates that the stock is moving along the ascending trend line. Additionally, the MACD indicator is also rising in the positive zone. Therefore, we are anticipating the stock to remain in an uptrend in the days ahead.
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