Facebook Reports Fourth Quarter and Full Year 2016 Results (Feb 1, 2017)

Facebook is surely one of the most predictable tech companies in reporting massive growth and profitability at the moment, and today’s results were no exception. The same drivers that have powered growth were there again in Q4: massive growth in US & Canada ARPU (up 46% year on year), massive growth in users (MAUs up 17% or 269m), increasing ad load and ad prices globally, and ads in new places like Instagram Stories and Messenger. Facebook has even been driving desktop ad revenue again, despite a decline in underlying usage – it was up 22% thanks to better mitigation of ad blockers. The only tiny dark cloud is that this is all ad growth – Facebook’s revenue is absolutely dominated by ads, which were 98% of its revenue in Q4. Non-ad revenue continues to decline, despite its investments in Oculus and other new areas, and will do so throughout 2017 too. If you believe in long-term challenges around ad-based business models, whether for privacy reasons, hitting a ceiling, the perverse incentives they create for businesses that use them, or something else, that could be a problem, especially as Facebook has already said its ad growth will slow in 2017 due to saturating ad load. However, I’m still very bullish on Facebook overall, especially as I think there are lots of untapped markets, not least showing people more content that doesn’t come from their friends, especially video (which was mentioned by Zuckerberg on the call today).

via Facebook

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• Facebook

• Earnings
• Financials
• Q4 2016

• Facebook's Power

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