Facebook: $110m a Day Profit, Advertising Revenue Ramps Up

Facebook’s profits doubled in the second quarter, soaring to $110 million a day, as its digital advertising revenue surges massively.

On Wednesday, the California-based company said its earnings had jumped to $10.39 billion, or $3.61 per share, on revenue of $29 billion in the April-June period.

Earnings exceed $5.18 billion or $1.80 per share in 2020, representing a 56% increase to $28.58 billion revenue from $18.32 billion.

The figures, which equate to about $76,000 per minute, beat the experts’ predictions.

A FactSet survey showed analysts expected earnings to rise to $3.04 per share and revenue to $24.85 billion.

In its second-quarter report, Facebook explained that its earnings saw a 50% increase from last year as digital advertising soared.

The average price per ad saw experienced a year-over-year 47% rise while the number of ads shown to people increased by 6%, driving ad revenue growth.

However, the tech giant estimates cooler growth in the coming months, which has caused its shares to plummet.

Facebooks’ CEO Mark Zuckerberg stated that the firm had solid growth as “we continue to help businesses grow, and people stay connected.”

Around 2.9 billion people use the social media platform monthly today after a year-over-year 7% increase.

Additionally, some 3.5 billion people downloaded and used at least one of the company’s apps, including WhatsApp, Instagram, and Messenger.

However, the firm’s shares fell 4% after it warned that growth was expected to slow.

The estimated growth reduction is due to regulatory actions and privacy settings on Apple’s iPhone, which could negatively impact Facebook’s ad targeting.

“We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates,” Facebook said in the earnings release.

Under the new privacy policies, Apple mobile apps tell users what tracking information they want to collect and request permission to do so.

But not being tracked makes it harder for Facebook and other companies to target their ads, which account for a large percentage of their revenue.

“This has been very challenging for advertisers and we’re working with them to help navigate these changes,” Facebook chief financial officer David Wehner stated.