Facebook had a fantastic first quarter despite looming legal fees

Facebook has disclosed its financial results for the first quarter of 2019.

Before diving into the financial results we’re going to take a look at how many users Facebook has. Following events such as the Cambridge Analytica scandal and a security flaw which was discovered late last year, one would assume Facebook would be losing users.

That doesn’t appear to be the case however as both daily active users and monthly active users increased by eight percent year-on-year. As of March 2019, there are 1.56 billion daily active users on Facebook and 2.38 billion monthly users.

The good news doesn’t stop there for Facebook as revenue from advertising increased by 26 percent year-on-year and 93 percent of that revenue comes from mobile advertising.

Total revenue for the first quarter amounts to $15 billion.

Net income for the first quarter however, amounted to 2.429 billion which is a 51 percent drop year-on-year.

The reason behind this massive drop is related to an ongoing investigation into Facebook by the Federal Trade Commission in the US regarding the Cambridge Analytica scandal of last year.

Facebook is expecting legal expenses of between $3 billion and $5 billion.

“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet. We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” the social network said.

This expense however, is the only real black mark on an otherwise fantastic quarter for Facebook.

Founder and chief executive officer Mark Zuckerberg praised the firm and said that its focus is no shifting toward being more responsible.

“We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet,” Zuckerberg said.

Will Facebook be able to continue this momentum throughout the remainder of the year? We’d say that largely depends on how big those legal fees grow to become but for now, Facebook will likely be celebrating this win after a tough 2018.

[Source – Facebook]


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