Social media giant Facebook (NASDAQ: FB) posted solid results for the fourth quarter of 2020 on Wednesday night. The company exceeded Wall Street expectations at all levels and increased its share buyback program by $ 25 billion.
Facebook’s revenue increased 33% year over year, reaching $ 28.1 billion. GAAP earnings increased 52% to $ 3.88 per diluted share. The average analyst predicted earnings of about $ 3.19 per share on sales close to $ 26.3 billion.
The company has achieved its stated goal of accelerating the growth in ad revenue, bringing this key metric from 22% in the third quarter to 31% at this time. Free cash flow increased 91% to $ 9.22 billion.
The company’s count of active users continued its steady rise in percentage rates from teenagers to teenagers year after year. Facebook had 1.84 billion daily active users in December.
CFO David Wehner highlighted two macroeconomic trends that helped the company exceed expectations in the quarter. A global shift towards online commerce has been accompanied by increased consumer demand for products and less interest in services. These two trends combined to serve as a fan for the growth of advertising on Facebook.
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Looking ahead, Wehner said he expects easy comparisons year on year in the first half of 2021, as the company will measure its progress against the weak advertising environment that prevailed during the early stages of the coronavirus pandemic.
Encouraged by these results and current business trends, Facebook replenished its stock buyback program with a $ 25 billion injection. The previous $ 34 billion authorization had $ 8.6 billion left, so the move brings Facebook’s ability to repurchase its shares to about $ 34 billion again.