Facebook ended 2020 much stronger financially than at the beginning of the year, proving that its business could withstand the coronavirus pandemic and even thrive thanks to the screen time skyrocketed in the last 12 months.
The company reported fourth quarter earnings on Wednesday of more than $ 28 billion in revenue with a profit of $ 11.2 billion, respectively 31% and 53% year-on-year increases. Regarding usage, Facebook is on the rise, with more than 1.84 billion people using their main social network at least once a day in December 2020, an increase of 11% year on year. As of December 31, 2020, more than 2.8 billion people accessed Facebook at least once a month, a 12% jump from the previous year.
When measuring the use of its family of apps, which also includes Facebook Messenger, Instagram and WhatsApp – a metric that the company refers to as “active people for the family” – the numbers are even better, as usual. More than 2.6 billion people check one of the Facebook apps every day (up 15% from 2019), while more than 3.3 billion check one of the apps at least once a month (up 14% ).
Facebook’s business was unaffected by its decision in October to temporarily ban political advertising after elections in the United States. (The company extended the ban for a month in December, but exempted advertising for Georgia’s Senate contests.) This was to be expected; political advertising pales in comparison to e-commerce, the standard retailer and small business ad spend on the platform.
Facebook’s “Others” category, which includes its Portal video chat devices and Oculus virtual reality businesses, also did very well in the last quarter, with a 156 percent jump in revenue to $ 885 million. The last quarter included the launch of Facebook’s second-generation Quest wireless headset, Quest 2 and Portal devices, which saw increasing sales throughout the year as people switched to remote work and virtual hangouts at home.
But it’s not all good news for Facebook in the future. The company says it will “continue to face significant uncertainties as we manage through a series of cross-currents in 2021” in its earnings report, signaling concerns that the company will not be able to maintain the same rate of growth year on year as it enters in the second half of 2021.
Not stated in your report are Apple’s privacy changes that could have significant consequences for Facebook’s advertising business, including mandatory new privacy labels and Apple’s plan to compel application makers to obtain user consent to track people on iOS devices. Earlier this month, Facebook’s WhatsApp delayed a new update of the privacy policy that was causing users to flee the app to competitors like Signal and Telegram.
“At the same time, in the first half of 2021, we will be overcoming a period of growth that was negatively impacted by reduced demand for advertising during the early stages of the pandemic,” writes the company. “As a result, we expect year-over-year growth rates in total revenue to remain stable or to accelerate modestly sequentially in the first and second quarters of 2021. In the second half of the year, we will experience periods of increasingly strong growth, which will put significant pressure on growth rates year after year. “
Facebook also continues to resist its fair share of platform moderation and public relations controversies surrounding disinformation, electoral interference and the recent ban by former President Donald Trump. This adds to a new wave of US regulatory scrutiny punctuated last month by an unprecedented Federal Trade Commission lawsuit that seeks to undo the company’s expensive acquisitions of Instagram and WhatsApp. But these issues appear to have little effect on the company’s bottom line for now.