Facebook, under fire, reports record earnings
Despite all of the doom and gloom reported about Facebook, from record fines to what seems like a constant stream of bad news, the company is doing just fine: it still made a ton of money.
Lurking in Q1's earnings filing, reported overnight, was a surprise: the company is expecting to pay a fine of $3-5 billion in the US as a result of a still-ongoing FTC probe into its conduct following the Cambridge Analytica scandal.
That sounds like a bunch of money—and it is—but it’s a drop in the bucket when Facebook, in the same quarter, filed revenue of $15 billion. Quartz points out that even with the money set aside for paying the fine, the quarter was still a record Q1.
For context, the United Kingdom issued fines of just £500,000 for the same breach under pre-GDPR provisions, given the violations happened before the law went into effect. Even still, GDPR only allows for fines of up to 4 percent of global revenue—bringing the maximum up to around $22 million—which wouldn't come close to the FTC's expected fine.
Investors reacted to this news with elation and relief, sending after-hours trading soaring to over $200 a share. After all, the fine could have been much greater, and while a slap on the wrist from the FTC is a first for Facebook, it puts a dollar amount on what it can get away with—which isn't so bad after all.
Other highlights from Facebook’s earnings:
- 👩👩👦 More than 2.38 billion people log in to Facebook each month, and 1.56 billion every day
- 💸 Average revenue per user was $6.42 globally
- 🔢 More than 2.7 billion people touch a Facebook product every month
- 📈 User growth has returned in Europe after it started falling in 2018
Other earnings roundups
It was a big day for earnings at technology companies, and we know some of this might be sleep-inducing, so here's the highlights from each big release today.
- After a few consecutive quarters of profitability, Tesla is dramatically losing money again, reporting a $702 million loss in Q1.
- Tesla's CFO said that "this was one of the most complicated quarters in Tesla's history" during the earnings call.
- Losses mounted because Tesla struggled to deliver overseas, lower than expected delivery volumes and significant internal restructuring.
- The company is burning cash at an alarming rate, losing $1.5 billion in just a single quarter, and leaving it with $2.2 billion on hand—which includes customer deposits for cars that are yet to be built.
- Reported surprisingly strong results of $30.6 billion, up more than 14 percent over last year.
- The cloud group, which is responsible for Azure, reported $9.7 billion and 21 percent growth. It's almost as if on-demand servers are a money-printing machine!
- Windows is actually...growing? It increased revenue to $10.7 billion, despite Windows being free for consumers, it's growing OEM and enterprise revenue steadily.
- Surface revenue is still strong, at $1.3 billion and grew 21 percent, which isn't bad considering the PC industry was widely thought to be dead (or at least stagnant).
- It isn't public yet but a rumor indicates the company's full filing details will become available before Friday this week, and that it expects to perform a direct listing in the coming weeks.
A Massachusetts court has ruled that police can't access real-time cellphone data without a warrant
The NSA recommends dropping its long-running phone surveillance program
Brave's alternative browser wants to 'pay' people to surf the web
Color me skeptical, but a very interesting experiment nonetheless.
Good read: 'It's not play if you're making money': how Instagram and YouTube disrupted child labor laws
Cool thing: Someone ported the VIM text editor to the new WebAssembly standard, and it works natively on the web now.