What Crisis? Facebook Made $9 Billion in Profit in the Last 3 Months
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On the face of it, Facebook has been having one of the worst weeks in its history. A series of over 50 news stories have laid out Facebook’s utter failure to police its own platform and protect its users, and highlighted just how much the company knew about their problems.
And yet, by the close of trading on Monday, the company’s share price had risen by 1%.
The reason: Facebook had once again shown its ability to grow and make money, even during its most turbulent times.
In an earnings call on Monday night, the company reported $29 billion in revenue for the three months to the end of September, up a whopping 35% from the same period a year earlier.
Of that, nearly $9.2 billion was profit, a 17% increase from last year. So where did all that extra money come from? The number of people using Facebook's family of apps grew a massive 12% year-over-year.
In its early years, Facebook regularly posted eye-watering growth figures, but as the company has saturated markets across the globe, its rate of growth has naturally slowed—which makes the figure announced by the company on Monday night all the more remarkable.
Facebook now has nearly 3.6 billion users globally. That is almost two thirds of the world’s adult population using one of the company’s apps, which include Facebook, Instagram and WhatsApp.
The flood of stories in the Facebook Papers series published in recent days may have an impact on the current quarter’s earnings. And Facebook whistleblower Frances Haugen has indicated that new leaks of internal documents will continue to trickle out until the end of November.
While this week’s flurry of stories had no impact on the results Facebook announced Monday, there were many other controversies that could have.
Over the course of the last year, when the company grew its user base by more than 385 million people, the company has been roiled by revelations about how it allowed QAnon to flourish on its platform, how it failed utterly to stem the flow of COVID-19 and vaccine misinformation, and how its network was used to foment anger that directly led to the Capitol riots.
Despite all of this, the company continues its inexorable growth.
While he didn’t announce his company’s new name, CEO Mark Zuckerberg did use the earnings call to complain about how journalists and publications had ganged up on him and his company in recent days.
“Good criticism helps us get better, but my view is that what we are seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company,” Zuckerberg said on the call.
Zuckerberg did admit that apps like TikTok have taken a large slice of Facebook’s younger audience, and he said the company was being reorganized to focus more on winning back 18- to 24-year-olds.
“We are retooling our teams to make serving young adults their North Star,” Zuckerberg said. “Like everything, this will involve trade-offs in our products and it will likely mean that the rest of our community will grow more slowly than it otherwise would have.”
Central to Facebook’s plans for growth is the so-called ‘metaverse,’ a virtual version of the world that Zuckerberg may view as a chance to wipe the slate clean and start again.
On Monday the company outlined how it plans to break out Facebook Reality Labs—the division of the company dedicated to augmented and virtual reality services—as a separate entity within the company’s finances.
To give a sense of just how much focus Facebook is putting on its virtual future, CFO Dave Wehner said the company is investing so heavily in VR that it will reduce “our overall operating profit in 2021 by approximately $10 billion.”
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David Gilbert, Khareem Sudlow
