Facebook's Q3 earnings exceed expectations, but Russian Federation issues may harm future profit
- Author: Darren Santiago Nov 03, 2017,
Nov 03, 2017, 0:13
CEO Mark Zuckerberg resolved the concerns surrounding the company in the opening of its letter to financiers.
"Our community continues to grow and our business is doing well", said Mark Zuckerberg, Facebook founder and CEO. The firm said Russian representatives spent just $46,000 on advertising- compared with the $81 million the Trump and Clinton campaign grounded- but Russia's effort still reached over 126 million users. Third-quarter ad revenue rose 49% to $10.1 billion, beating the consensus of $9.71 billion. "Protecting our community is more important than maximising our profits", he said.
Despite mounting criticism from USA lawmakers over Russia's use of its platform to spread propaganda, the company's stock has been trading at all-time highs ahead of Wednesday's results.
He added by saying, " We're investing so much in security that it will impact our profitability.
But CEO Mark Zuckerberg sounded a warning note, after a hard few weeks of debate around the role of rogue Russian actors trying to influence the last United States presidential election through Facebook ads and posts.
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Ad revenue was up 68% YoY, from $6.8 billion to just over $10 billion, with mobile ad revenue comprising roughly 88% of ad revenue for the quarter, a 4% increase from this time previous year. EPS (GAAP): $1.59 vs. $1.28 expected, up 77% from the year-ago period. The social media giant, along with Google and Twitter all sent general counsel this week to three scheduled meetings before the Senate Judiciary Committee on Russian influence in the 2016 presidential election.
Zuckerberg outlined investment priorities that included video content, which he described as the biggest trend at Facebook.
It's worth noting that more than 98 percent of Facebook's revenue comes from advertising, 88 percent of which is from mobile devices.
Facebook now has 2.07 billion monthly active users - an increase of 16 per cent year-over-year.
Facebook is having a great day following the release of its Q3 earnings report, which gave investors lots of news to be happy about, including significant growth in overall and advertising-related revenues. "You've created these platforms, and now they are being misused, and you have to be the ones to do something about it, or we will". "We're building AI to go after more different areas of harmful content and finding fake accounts and other bad actors in the system".