A 10% rise in Facebook’s shares in after-hours trading mid-week on the back of an 18% increase in revenue for the entire quarter helped investors ignore a decline in ad revenue the social media giant reported in March.
Even as Facebook conceded that COVID-19 pandemic had hurt advertising in March, ad sales had, however, shown “signs of stability” during the first three weeks of April.
Despite the decline in March, Facebook’s revenue climbed to $17.74 billion, up nearly 18% from the $15.08 billion the company had reported during the same quarter last year.
In the wake of stay-at-home policies globally, Facebook’s daily-average-users (DAU) and monthly-average-users (MAU) had both seen considerable gains with DAUs rising 11% to 1.73 billion and MAUs rising 10% year-on-year to 2.60 billion.
The results also showed Earnings (EPS) of $1.71 per share and average revenue or Average Revenue Per User (ARPU) of $6.95 during Q1. Capital expenditures, including principal payments on finance leases, stood at $3.66 billion during Q1. Headcount stood at 48,268 as of 31 March 2020, an increase of 28% year over year.
Following the pandemic and the uncertainties it had thrown up, Facebook desisted from giving revenue guidance for the coming year and said the company could “lose at least some of this increased engagement when various shelter-in-place restrictions are relaxed in the future”.
Speaking on a conference call, Facebook CEO Mark Zuckerberg spoke of his concerns about governments and businesses around the world thinking about removing stay at home restrictions quickly.
“While there are massive societal costs from the current shelter in place restrictions, I worry that reopening certain places too quickly, before infection rates have been reduced to very minimal levels, will almost guarantee future outbreaks and even worse economic outcomes,” Zuckerberg said, adding, “I am very concerned that this health emergency and therefore the economic fallout will last longer than people are currently anticipating.”
Zuckerberg’s concerns about removing social-distancing restrictions too soon are in dramatic contrast to Elon Musk who has called on governments to “give people their freedom back”.
The diverging views, of course, result from diverging results: whereas one CEO has experienced a higher engagement from stay-at-home policies, the other would like to see customers hitting the road again and soon.
In a rant laced with expletives during Tesla’s Q1 2020 earnings call, Musk doubled called the lockdowns as “forcibly imprisoning people in their homes… against all their constitutional rights”. Musk said, “they can stay in their house and they should not be compelled to leave. But to say that they cannot leave their house and they will be arrested if they do, this is fascist. This is not democratic, this is not freedom. Give people back their goddamn freedom.”