Facebook (NASDAQ:FB) shrugged off scandals and regulatory woes announcing another strong quarter of financial results, beating expectations on both profits and revenue.
Facebook shares rallied 5% after-hours trading to $198.01 following an impressive set of numbers. Whilst Facebook (NASDAQ:FB) has many problems, attracting advertising revenue is not one of them. These results show that Facebook’s core business has emerged unscathed from the onslaught of scandals over the past two years.
Notably, Facebook picked up 2 million users in each of its core US and Canada and Europe markets, after quarters of shrinkage, no growth or weak growth. Adding to the good news, the average revenue per user also grew solidly across all markets. This bodes well for the tech giant’s ability to monetize the growth in these areas
Timing is everything
Facebook’s impressive earning were somewhat overshadowed by Twitter CEO Jack Dorsey announcing that it would ban all political ads. The move is in stark contrast to Mark Zuckerberg’s more relaxed approach to the spread of misinformation without fact checks. The move by Jack Dorsey will undoubtedly increase pressure on Facebook to up their game in this department.
The headcount at Facebook continues to grow. Headcount increased by 28% YoY. Content moderators are playing an increasingly important role as the push for transparency grows.
Scandals
Facebook's public perception took some hits across the quarter as it contended with outages, regulatory concerns over its Libra project, with growing calls including from presidential candidates for the network to be broken up.
Yet despite the negativity, users kept using, user growth increased, and ad revenue kept pouring in across the quarter.
Facebook levels to watch:
On the daily chart technical indicators are bullish across the board. The stock is trading +4.4% out of hours. A break above 198 could open the door to resistance at 203 before 209. On the downside support is seen at 181.60 prior to 173.