Facebook’s first-quarter report is here, and like pretty much everyone else, it said it’s contending with “a significant reduction in the demand for advertising” that began in March.
However, the social network specifically noted that while pandemic-prompted declines in ad spend were “broad based” and affected all categories, some marketing topics, notably video games, have shown “relative strength,” per Variety. (It’s possible that gaming’s strong ad performance–plus the significant spike in viewership for gaming content–played a part in Facebook’s decision to debut its dedicated Gaming app last week, instead of in June.)
Despite end-of-quarter ad troubles, Facebook reported higher than expected revenues: $17.74 billion compared to analysts’ projected $17.48 billion, an 18% year-over-year jump from the $15.08 billion it reported Q1 2019. Net income, though, was lower than expected: $4.9 billion, with earnings per share of $1.71. Analysts had expected per-share profit of $1.74.
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As for how many users are around to see those still-strong gaming ads, Facebook reported a first-quarter gain of around 100 million monthly actives, bringing it to a total of 2.6 billion. In the month of March, its daily active user count increased to an average of 1.73 billion, 11% more than it had in Q1 2019.
Facebook, subsidiary platform Instagram, and subsidiary messaging service WhatsApp now have a collective total of 2.99 billion monthly active users, the company revealed. (That too is an 11% increase from Q1 2019.)
With the disclosure of these figures, Facebook cautioned that it expects average numbers of daily and monthly active users will likely shrink once shelter-in-place orders have been lifted.
And that’s not the only change it foresees. It also said that after March’s drop in demand, “we have seen signs of stability reflected in the first three weeks of April, where advertising revenue has been approximately flat compared to the same period a year ago.”
Stability could mean things are looking up, but the platform ultimately decided not to release revenue projections for the rest of 2020. “Our business has been impacted by the COVID-19 pandemic and, like all companies, we are facing a period of unprecedented uncertainty in our business outlook,” it explained.
CEO Mark Zuckerberg did mention one future-related figure for Facebook: Unlike YouTube and Google’s parent conglomerate Alphabet, which intends to slow down hiring for the remainder of 2020, Facebook is going to ramp it up. Zuckerberg said there are plans to hire at least 10,000 more employees this year. (It currently has 48,268, per Variety.)
That difference aside, Facebook’s earnings call echoes much of Alphabet’s and Snap’s. YouTube also saw “a significant slowdown in ad revenues” beginning in March, but said that direct-response ads like preroll surveys saw “substantial” growth even in March. Snap likewise saw growth in direct-response ads, and said it intends to invest more money into strong ad sectors–including gaming.
