The second half of July means Q2 earnings are out. While some results were surprising, others showed companies’ continued growth, and in one instance, even a potential rebound. We offer our analysis on six companies' results, as well as our own forecasts.
Facebook
Results
Facebook released better-than-expected results on July 24, reporting $16.9 billion in revenues, 1.59 billion in daily active users (DAUs), and $7.05 in average revenue per user (ARPU). This came just as the company was fined a record-setting $5 billion by the Federal Trade Commission (FTC) as a result of the 2018 Cambridge Analytica scandal.
Our thoughts
“This company has repeatedly shown that it can grow both its ad revenues and user base, even in the face of enormous challenges," said Debra Aho Williamson, principal analyst. "Its earnings release demonstrates that it still has that power."
“We expect Facebook’s worldwide ad revenues will increase 22.5% this year. That’s a higher growth rate than for digital advertising as a whole, which we expect will increase 17.6%. The FTC settlement, which was announced the same day as Facebook’s earnings, doesn’t appear to have direct impact on Facebook’s ad business, but other regulatory or governmental investigations may have an impact in the future. We also think that Facebook will continue to scrutinize its own business practices and could decide to make changes to its targeting capabilities on its own.”
eMarketer’s Facebook estimates
Facebook's worldwide digital ad revenues will be $67.37 billion this year (including Instagram's $14.41 billion), which will increase 20.1% to $80.93 billion next year. The company currently controls a 20.2% share of the worldwide digital ad market, right behind Google (31.1%).