Facebook on Thursday said that its daily and monthly active users in the US and Canada, a core market, declined slightly in the third quarter compared to the previous three months, and it expects this trend to continue. Facebook does not break down user numbers by region, so the full extent of the damage is unclear.
Globally, the earnings release paints a rosier picture both in terms of financial performance and user growth.
Facebook’s revenue jumped 22% to $21.47 billion compared to last year, which beat analysts’ expectations. Net income increased 29% to $7.85 billion year-over-year.
The company had 2.74 billion monthly active users during the quarter ending in September, an increase of 12% from the prior year. When combining all of Facebook’s various apps, including Instagram, Messenger and WhatsApp, the company reported 3.21 billion users, an increase of 14%.
Last quarter, Facebook said its daily and monthly active user numbers “reflect increased engagement as people around the world sheltered in place and used our products to connect with the people and organizations they care about.” However, the company previously cautioned that as stay at home orders begin to ease, it expected engagement to be flat or to slightly drop in the future.
Shares of Facebook initially jumped following its latest earnings report, then fell about 3% before climbing slightly into positive territory in after-hours trading.
Looking ahead to 2021, the company said it continues to face “a significant amount of uncertainty.”
“We believe the pandemic has contributed to an acceleration in the shift of commerce from offline to online, and we experienced increasing demand for advertising as a result of this acceleration. Considering that online commerce is our largest ad vertical, a change in this trend could serve as a headwind to our 2021 ad revenue growth,” the company said in its earnings report.
Facebook also cited other challenges, including iPhone software changes that it expects will hurt its advertising business, as well as the “evolving regulatory landscape.”
“We had a strong quarter as people and businesses continue to rely on our services to stay connected and create economic opportunity during these tough times,” Facebook CEO Mark Zuckerberg said in a statement.
“Facebook has rebounded nicely from both the early-pandemic advertiser pullout, when marketers pulled ads across all media to redo messaging or conserve funds, and from the July ad boycott,” said eMarketer principal analyst Debra Aho Williamson. “Despite its challenges with election turmoil and content moderation, it remains a go-to for advertisers seeking to engage a broad base of consumers.”