Facebook may be facing the worst news cycle in its history right now, but it is still making staggering profits. Yet again.
The company earned $29.01 billion in third quarter revenue, an increase of $21.47 billion from the same period last year. It also reported impressive user numbers, with 1.9 billion users per day and 2.9 million people using Facebook's apps every month. Facebook made $9.2 billion profit on the more than $29 billion revenue.
Bloomberg reported that Facebook's stock price rose by 3% after its earnings announcement.
Mark Zucerberg stated that we made progress in the quarter and our community continues its growth. This statement was made ahead of the earnings call. I am excited about our roadmap, particularly around creators, commerce and helping to build a metaverse.
The news stories about Zucks company that have been published in the last few days are something Zucks is not particularly excited about. A group of 20 news outlets was recently granted access to documents by Frances Haugen, a whistleblower at Facebook, detailing the worst offenses of the company, including misinformation and failure to curb hate speech. These stories started to trickle out over the weekend. A deluge was of new reports arriving Monday, just before earnings were announced.
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Facebook also gave a hint as to how its reports will change starting next quarter. The company stated that it will be splitting earnings reports into two separate segments starting in Q4 this year. The first segment is Facebooks Family of Apps, or FoA. This includes earnings from Facebook and Instagram. Segment number 2 is Facebook Reality Labs (or FRL), which encompasses the company's many hardware and virtual reality products. The company revealed that it will not be removing the Oculus brand from its VR headsets but would move the product under the FRL name, which it shares with Portal tablets.
While the media storm has not yet affected the company's earnings, Apples privacy-centric updates for the iOS ecosystem are causing chaos. In light of the ongoing headwinds from Apples iOS 14 updates, as well as macroeconomic and COVID factors, our outlook is a reflection of the uncertainty we face in fourth quarter, Facebook stated in its Q3 earnings summary.
Facebook for its part had known this for over a year and engaged in a full-blown PR campaign against Apple as soon as the impending changes were made public. It seems that Facebook's worst fears are now a reality. With Apples support, more people have opted out of app-based tracking. Graham Mudd, the chief advertising executive of the company, stated last month that it was having difficulty tracking large numbers of iOS users using the Facebook ecosystem. Mudd revealed this month that the company was changing the way it counts users across Facebooks properties to make up some of the missing figures.
Facebook is not the only app that feels the brunt from Apple's updates. Snap's revenue goal was missed by $3 million in the quarter. The company explained to investors during an earnings call that Apples don't track toggles and this is why they failed to meet their quarterly target. Snaps chief operating officer Jeremi Gorman stated that the company was still trying to adjust to industry changes in the way advertising is measured and targeted on iOS. However, the revenue miss was greater than they expected. Snap's dire warning was made about the potential impact on Snap's market value and that of its competitors like Google and Facebook.