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User Growth, ARPU & Other Key Q3 Facebook (FB) Estimates
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Facebook shares have sunk over 15% in the last three months on the back of user growth worries, data security concerns, and other setbacks. As fears surrounding Facebook stock continue to mount, understanding what to expect from some of Facebook’s vital Q3 metrics, which include monthly active user figures and advertising revenue, is more important than ever.
FB Overview
Facebook and Twitter —which posted impressive Q3 earnings results last week—are under significant scrutiny for their roles in the spread of “fake news” and misinformation. In fact, the U.K.’s privacy watchdog last week handed Facebook a $645,000 fine for the Cambridge Analytica scandal. Going forward, Facebook, Google (GOOGL - Free Report) , and other companies with outsized impacts on the internet will continue to face the possibility of government intervention.
With that said, many investors are likely more nervous at the moment about FB’s slowing user growth in key regions as well as its declining margins. Last quarter, Facebook said its operating margin is expected to fall to the "mid-30s on a percentage basis" over a more than two-year period. Mark Zuckerberg’s firm posted an operating margin of 44% in Q2, which already marked its lowest level in the previous last five quarters.
Now it’s time to dive into some of Facebook’s key company metrics because those could likely determine if shares of FB bounce back following its quarterly earnings release after the bell Tuesday.
To prepare for this, we can turn to our exclusive non-financial metrics consensus estimate file. The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.
User Growth
The U.S. & Canada and Europe are Facebook’s two most important regions in terms of revenue generation. Last quarter, these two areas accounted for roughly 27% of its total monthly active user base, but made up over 72% of quarterly revenues.
The firm’s MAUs in the U.S. & Canada are projected to climb by 1.5% from 239 million in the year-ago period to reach 242.52 million, based on our NFM metrics. The region’s MAUs are expected to be up marginally from Q2’s 241 million. Last quarter, Facebook experienced no sequential growth in this category.
Moving on, DAUs in the U.S. & Canada are expected to reach 186.16 million, which would mark a 1.16 million jump from both the year-ago period and Q2’s 185 million. In Europe, Facebook’s MAUs are projected to jump roughly 3% from 364 million in the third quarter of 2017 to touch 376.18 million. This growth would also represent a small climb from Q2’s 376 million. Meanwhile, Facebook’s European DAUs are expected to be up a microscopic amount sequentially and nearly 2% year-over-year to reach 279.11 million.
Moving on, Facebook’s MAUs in its Asia-Pacific region are projected to jump by 128 million, or 16% to reach 922.50 million. It is worth noting that Facebook’s DAUs and MAUs do not include Instagram, WhatsApp, or Oculus users “unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.”
Advertising
Overall, Facebook’s Q3 revenues are projected to surge 33.8% to reach $13.81 billion, based on our current Zacks Consensus Estimate. More specifically, FB’s ad revenues are expected to jump from $10.142 billion in the year-ago quarter to hit $13.662 billion in Q3. Clearly, with advertising expected to account for over 98% of Facebook’s Q3 revenues, this category is one of the company’s most important metrics.
Despite concerns about slowing user growth, Facebook looks ready to keep grabbing more and more revenue per user as its platforms remain some of the most attractive places to advertise. Plus, as linear TV fades and subscription services such as Netflix (NFLX - Free Report) and Amazon Prime Video (AMZN - Free Report) become more popular, Facebook will likely become even more important.
Facebook’s average revenue per user in the U.S. and Canada—where it made nearly 50% of its revenues last quarter—is projected to soar 43% from $21.20 in the year-ago period to hit $30.31. This would also mark a 17% sequential jump from Q2’s $25.91. Plus, FB’s worldwide ARPU is projected to surge 20.5% from $5.07 to hit $6.11 in the third quarter.
Bottom Line
It seems that investors should be excited that Facebook’s ability to generate more money per user is expected to grow at a strong clip. It is, however, worth noting that Facebook’s adjusted quarterly earnings are expected to slip 8.2% to $1.46 per share. With that said, FB’s fiscal year earnings are projected to jump by 14.6% amid rising costs.
Facebook is also currently a Zacks Rank #3 (Hold) based on its recent earnings revision trends, and might be worth thinking about ahead of its Q3 earnings release on Tuesday.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
User Growth, ARPU & Other Key Q3 Facebook (FB) Estimates
Facebook shares have sunk over 15% in the last three months on the back of user growth worries, data security concerns, and other setbacks. As fears surrounding Facebook stock continue to mount, understanding what to expect from some of Facebook’s vital Q3 metrics, which include monthly active user figures and advertising revenue, is more important than ever.
FB Overview
Facebook and Twitter —which posted impressive Q3 earnings results last week—are under significant scrutiny for their roles in the spread of “fake news” and misinformation. In fact, the U.K.’s privacy watchdog last week handed Facebook a $645,000 fine for the Cambridge Analytica scandal. Going forward, Facebook, Google (GOOGL - Free Report) , and other companies with outsized impacts on the internet will continue to face the possibility of government intervention.
With that said, many investors are likely more nervous at the moment about FB’s slowing user growth in key regions as well as its declining margins. Last quarter, Facebook said its operating margin is expected to fall to the "mid-30s on a percentage basis" over a more than two-year period. Mark Zuckerberg’s firm posted an operating margin of 44% in Q2, which already marked its lowest level in the previous last five quarters.
Now it’s time to dive into some of Facebook’s key company metrics because those could likely determine if shares of FB bounce back following its quarterly earnings release after the bell Tuesday.
To prepare for this, we can turn to our exclusive non-financial metrics consensus estimate file. The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.
User Growth
The U.S. & Canada and Europe are Facebook’s two most important regions in terms of revenue generation. Last quarter, these two areas accounted for roughly 27% of its total monthly active user base, but made up over 72% of quarterly revenues.
The firm’s MAUs in the U.S. & Canada are projected to climb by 1.5% from 239 million in the year-ago period to reach 242.52 million, based on our NFM metrics. The region’s MAUs are expected to be up marginally from Q2’s 241 million. Last quarter, Facebook experienced no sequential growth in this category.
Moving on, DAUs in the U.S. & Canada are expected to reach 186.16 million, which would mark a 1.16 million jump from both the year-ago period and Q2’s 185 million. In Europe, Facebook’s MAUs are projected to jump roughly 3% from 364 million in the third quarter of 2017 to touch 376.18 million. This growth would also represent a small climb from Q2’s 376 million. Meanwhile, Facebook’s European DAUs are expected to be up a microscopic amount sequentially and nearly 2% year-over-year to reach 279.11 million.
Moving on, Facebook’s MAUs in its Asia-Pacific region are projected to jump by 128 million, or 16% to reach 922.50 million. It is worth noting that Facebook’s DAUs and MAUs do not include Instagram, WhatsApp, or Oculus users “unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook.”
Advertising
Overall, Facebook’s Q3 revenues are projected to surge 33.8% to reach $13.81 billion, based on our current Zacks Consensus Estimate. More specifically, FB’s ad revenues are expected to jump from $10.142 billion in the year-ago quarter to hit $13.662 billion in Q3. Clearly, with advertising expected to account for over 98% of Facebook’s Q3 revenues, this category is one of the company’s most important metrics.
Despite concerns about slowing user growth, Facebook looks ready to keep grabbing more and more revenue per user as its platforms remain some of the most attractive places to advertise. Plus, as linear TV fades and subscription services such as Netflix (NFLX - Free Report) and Amazon Prime Video (AMZN - Free Report) become more popular, Facebook will likely become even more important.
Facebook’s average revenue per user in the U.S. and Canada—where it made nearly 50% of its revenues last quarter—is projected to soar 43% from $21.20 in the year-ago period to hit $30.31. This would also mark a 17% sequential jump from Q2’s $25.91. Plus, FB’s worldwide ARPU is projected to surge 20.5% from $5.07 to hit $6.11 in the third quarter.
Bottom Line
It seems that investors should be excited that Facebook’s ability to generate more money per user is expected to grow at a strong clip. It is, however, worth noting that Facebook’s adjusted quarterly earnings are expected to slip 8.2% to $1.46 per share. With that said, FB’s fiscal year earnings are projected to jump by 14.6% amid rising costs.
Facebook is also currently a Zacks Rank #3 (Hold) based on its recent earnings revision trends, and might be worth thinking about ahead of its Q3 earnings release on Tuesday.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>