iOS14 Privacy Update Seen as a Headwind
The social media business reported earnings of $3.88 per share, which is higher than the $3.22 per share expected from analysts. The Q4 revenue came in also higher — $28.07 billion vs. $26.44 billion expected.
"We had a strong end to the year as people and businesses continued to use our services during these challenging times. I'm excited about our product roadmap for 2021 as we build new and meaningful ways to create economic opportunity, build community and help people just have fun," said Mark Zuckerberg, co-founder and CEO of the company.
As far as metrics used by social media companies to measure activity on their platforms, the company reported daily active users (DAUs) of 1.84 billion, monthly active users (MAUs) of 2.8 billion, while average revenue per user (ARPU) came in at $10.14. All three metrics came in higher-than-expected.
Overall, the social media business said it serves 3.3 billion users across all platforms, which is 2.8% higher compared to the last quarter. The company did not provide formal guidance.
Still, Facebook stock fell in after-hours trading after the social media company issued a warning relating to the looming changes in Apple’s iOS 14 operating system. A new update will require developers to ask for permission to track iOS users for ad targeting. Facebook believes these changes are likely to hurt its ad business.
“Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own,” Facebook CEO Mark Zuckerberg said on an earnings call on Wednesday.
“This impacts the growth of millions of businesses around the world, including with the upcoming iOS 14 changes. Apple may say they’re doing this to help people but the moves clearly track their competitor interests,” the CEO of the social media company added.
The company also announced a repurchase of up to an additional $25 billion of its own stock. Facebook stock is trading about 0.1% lower in pre-open Thursday, after initially falling 5% on Apple warning.
Social media company Facebook reported better-than-expected results for its fourth quarter, but it warned that its ad business could suffer from the looming privacy changes in Apple’s iOS14.
About the Author
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.