On Wednesday, under the hungry eyes of investors for a light at the end of the tunnel amid the pandemic of COVID-19, a few more big techs released their results for the first three months of 2020. Facebook announced an 18% increase in its first-quarter revenue this Wednesday: $17.7 billion, up from $15.1 billion earned in the same quarter of 2019–a slightly higher number than the one expected by the analysts. The vast majority of these gains came from advertising.
As usual, the United States and Canada respond with the largest volume of revenue, followed by Europe and Asia. In the report, Latin America is part of the “rest of the world”.
But that does not mean that the company did not feel the impact of the new coronavirus. In the report, Facebook said it saw user engagement grow, probably due to social isolation measures. The number of Facebook daily active users (DAUs) grew 11% year-over-year, to 1.73 billion on average for March 2020.
On the other hand, the company also registered a reduction in the demand for advertising within its platforms, as well as a drop in the price of ads in the last three weeks of the first quarter. And it is especially at this point, the most sensitive, that the company refused to give forecasts for the next quarter.
“Due to the increasing uncertainty in our business outlook, we are not providing specific revenue guidance for the second quarter or full-year 2020, but rather a snapshot on revenue performance in the second quarter thus far,” said the company.
Facebook explained that after the initial steep decrease in advertising revenue in March, the company is seeing signs of stability reflected in the first three weeks of April, where advertising revenue has been approximately flat compared to the same period a year ago, down from the 17% year-over-year growth in the first quarter of 2020. “The April trends reflect weakness across all of our user geographies as most of our major countries have had some sort of shelter-in-place guidelines in effect,” stated the company.
On the expenses side, Facebook said that it will make operational expense savings in certain areas such as travel, events, and marketing. “However, we plan to continue to invest in product development and to recruit technical talent. In addition, we have committed over $300 million to date in investments to help our broader community during the crisis,” highlighted the company.
As pointed out by The Washington Post, though, Facebook and the Tech Giants are in a privileged position to overcome the COVID-19 coming recession. “The company is sitting on a $553 billion stockpile of cash, making it one of the most valuable and cash-rich companies in the world,” wrote Elizabeth Dwoskin, from The Post.
Although the company has reported that it will slow the pace of hiring, Facebook executives said that the company will hire around 10,000 people this year, as one more sign of this privileged position among businesses in general. Today, according to the report, the company employs 48,268 people, 28% more than it did at the end of March of the previous year.