What to expect: Facebook Q4 2018 earnings

MANILA, Philippines – In Q3 2018, Facebook’s revenue and user growth in important markets across the globe slowed after a series of data privacy and misinformation scandals.

Facebook now hopes its recent investments to improve security, and address data issues on the platform have attracted some of its old users back and helped it recover some investor confidence. It’s set to release its Q4 2018 earnings report on Wednesday, January 30.

Estimates

According to estimates from investment research firm Zacks, Facebook’s Q4 revenue is projected to jump 26.4% from the same period a year ago to reach $16.37 billion – continuing the growth decline from Q1’s 49%, Q2’s 42%, and Q3’s 33%.

The social network’s overall fiscal 2018 revenues, meanwhile, are expected to have grown by 36.1% compared to last year to reach $55.35 billion. It’s lower than the 47% growth from 2016 to 2017. For 2019, the research firm expects the downturn to continue, with the annual revenue slowing to 23.7% to reach $68.47 billion.

One factor affecting the slower growth rate: Facebook is expected to spends billions of dollars more than ever before to address issues that plague the platform.

User growth

Facebook in the last reported quarter said that it had 2.27 billion monthly active users (MAU), which marked a 10% jump compared to same period last year. Despite the global jump, the social network’s monthly active users in valuable markets such as America and Europe held flat.

This might not be the case for Facebook in Q4 as its MAUs in US and Canada, which accounted for 49% of the company’s Q3 earnings, are predicted to increase 1.6% to reach 242.93 million.

Europe’s MAUs are also projected to increase by roughly 2.4% year-over-year to reach 378.79 million after last quarter’s flat standing. 

Meanwhile, Facebook’s MAUs in Asia-Pacific – still among the regions where people have continued to adopt the platform in spite of controversies – are expected to soar by 15% to hit 952.63 million. The “rest of the world” MAUs are expected to grow to 9.6% above the year-earlier quarter to hit 758.65 million.

In total, Facebook’s MAU is estimated to reach 2.33 billion in Q4 – a 9.5% growth from the 2.13 billion a year ago.

The projection is not far off from the 10% climb in the last reported quarter which shows that the platform’s problems may not have hurt it as much as what people initially thought.

Other Facebook products

If business for the core Facebook platform does not improve over time, at least it has Instagram to rely on.

The photo and video-sharing app is likely to generate anywhere between $5 billion to $14 billion in revenue this 2019, according to Business Insider.

“We see upside to pricing, users, and impressions as Instagram continues to improve its advertising efforts across the entire advertising funnel,” analysts from investment bank Jefferies said.

They added that similar growth opportunities can be found in WhatsApp and Facebook Messenger where they said both paid messages and advertising are possible. – Rappler.com