Facebook Wants To Focus More On Community

Facebook announced Q1 numbers that beat analysts’ estimates for revenue, ads, monthly and daily users and engagement. But after-hours trading saw Facebook shares fall 1.92 percent, even after the tech giant beat analyst expectations on almost every count.

In his prepared remarks, CEO Mark Zuckerberg called out two main areas of focus: connecting communities and combating the fake news and violence that has taken center stage of late.

“In the past decade, Facebook has focused on connecting friends and family,” Zuckerberg said. “Now, with that foundation, our next focus will be on building community. My hope is to help more than one billion people join meaningful groups to strengthen our social fabric.”

Zuckerberg also addressed a number of efforts designed to eliminate the violent and fake news controversies that have concerned users, investors and advertisers alike over the last six months.

“It’s clear we have more to do here,” Zuckerberg said. “We’re going to continue to keep building new tools to keep people safe here on our platform.”

Over the next year, Zuckerberg said that Facebook plans to add 3,000 more people to its community operations team to review millions of user reports the company receives on a weekly basis.

Likewise, Zuckerberg noted that Facebook will be making changes to its news feed ranking system to reduce the financial motivation to spread hoaxes and fake news. Facebook is also working with independent fact checkers and user tools in 14 countries to help spot questionable news content.

Along with its community-oriented upgrades, Zuckerberg once again touted the future of user-generated images across its platforms.

“Photos and video are becoming more common than text,” he said, “and the camera is becoming more central than the text box in all of our apps.”

Now, one in every five Facebook videos is a live broadcast, he said. Over the past year, watch times for live video broadcasts have increased four times over.

With the addition of computer vision technology, expanding the “Stories” format, image overlays and filters, Zuckerberg noted that the company looks to make its camera the first augmented reality platform.

Instagram Stories now has more than 200 million daily active users, Zuckerberg said. Likewise, WhatsApp Status has 155 million daily active users.

The company didn’t disclose user numbers for the new Facebook Stories and Messenger Days for Q1, likely as the features are still relatively new. The health of these additions will likely signal how Facebook will fare in its video and AR plays come Q2.

Facebook by the Numbers

In Q1, Facebook brought in $8.03 billion in revenue in Q1, up 49 percent year over year (YoY), beating out analyst estimates of $7.84 billion. Likewise, Facebook’s GAAP EPS hit $1.04 per diluted share, well above the anticipated $0.87.

Ad revenue made up a significant chunk of the total, as expected, at $7.86 billion, up 51 percent YoY but down from 56 percent in Q3.

The slowdown in ad revenue is something that Facebook warned investors was coming, given their decision to reduce the number of ads in the news feed.

Mobile ad revenue accounted for 85 percent of Facebook’s total in Q1, accounting for some $6.82 billion.

As the company reported earlier this year, monthly active users for Messenger hit over 1.2 billion.

Payments revenue declined — coming in at $175 million, a 3.3 percent drop from the same period last year and below the $180 million brought in for Q4 2016.

Facebook’s user numbers also beat estimates, with total monthly users topping 1.93 billion in the quarter, up 4.1 percent, or 76 million from Q4, and beating out expectations of 1.91 billion going into the quarter.

Daily active users hit 1.28 billion worldwide, up 18 percent YoY, on par with the 18 percent growth seen in Q4. Facebook’s stickiness — the ratio daily to monthly active users — remained at 66 percent in Q1.

In the U.S. and Canada, Facebook’s average revenue per user (ARPU) was $17.07, down from the last quarter, but still well up YoY, especially compared to other world regions. ARPU hit $4.23 globally, in Q1, down 10 percent from Q4 but up 27 percent over the same period last year and beating out expectations of $4.17.