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Facebook revenue, user growth falls short of expectations

Facebook's revenue and user growth has disappointed investors.

Posted: Oct 30, 2018 3:52 PM

(CNN) -- Facebook's revenue and user growth has disappointed investors.

Total revenue jumped 33% to 13.73 billion for the three months ending in September, but fell short of analysts' expectations. User figures also missed analysts estimates. Monthly active users totaled 2.27 billion as of September 30, while daily active users for the month averaged 1.49 billion. Analysts were expecting 2.29 billion monthly users and 1.51 billion daily users.

But it's not all bad news for Facebook. Earnings of $1.76 per share topped Wall Street's estimates.

The company also said it estimates over 2.6 billion people now use Facebook, WhatsApp, Instagram or Messenger each month. In addition, more than 2 billion people use at least one of these Facebook-owned apps each day on average.

The report comes after a disappointing second quarter. Facebook said its user growth had slowed and its expenses were increasing.

At the time, CFO David Wehner warned sales growth may decline in the second half of the year as the company prioritizes new formats, such as its popular Stories feature, and offers users "more choice around privacy." He said prioritizing privacy in the product development process could have an effect on revenue growth.

The company said it expected expenses to increase as it invests "billions of dollars per year" to improve safety and security following a slew of issues, including fake news and foreign election meddling on its platform.

It's been a challenging year for the company. In September, Facebook was hit with the biggest security breach in its history. Nearly 30 million users' phone numbers and email addresses were accessed by hackers.

The company continues to grapple with privacy issues in the aftermath of the Cambridge Analytica scandal and the proliferation of disinformation. Just last week, Facebook said it took down 82 pages, groups and accounts that were run from Iran but targeting people in the US and the UK ahead of the US midterm elections.

However, Instagram has remained a bright spot for Facebook. In June, it announced 1 billion people use the photo-sharing app each month. Instagram's Stories -- a format pioneered by Snapchat, which lets users post photos and videos that disappear after 24 hours -- is used by more than 400 million people every day, up from 250 million one year ago.

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