Facebook Tumbles After Daily Users Miss, Zuck Warns “Users Spending Less Time” On Site

Amid Capitol Hill hearings, shifts in the news strategy, promoting local content, kicking out Russian spies and banning bitcoin ads, Facebook managed to beat Q4 revenue expectations, with Revenue printing st $12.97BN, above the $12.55BN estimate, however EPS missed, coming in at $1.44, below the $1.95 expected as a result of the impact of tax provision on the company, which increased by $2.27 billion.

What is more concerning is that for the first time in years, facebook daily active users missed estimates:

  • Daily active users came in at 1.40 billion, just shy of the 1.41 billion expected.
  • Monthly active users came in line with expectations at 2.13BN
  • Mobile ad revenue as a percentage of total was 89%; Facebook reported that Q4 ad revenue was $12.78 billion.

Commenting on the results, Zuckerberg said that “2017 was a strong year for Facebook, but it was also a hard one. In 2018, we’re focused on making sure Facebook isn’t just fun to use, but also good for people’s well-being and for society. We’re doing this by encouraging meaningful connections between people rather than passive consumption of content. Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent.”

But more than the DAU and EPS miss, this is why the stock is tumbling after hours, from Zuckerberg.

“In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term.”

In immediate reaction the stock is sharply lower, and is dragging the Nasdaq along with it.


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