3 Key Metrics Behind Facebook's Surprising Q2 Growth

  3 Key Metrics Behind Facebook's Surprising Q2 Growth   To find out the reasons for Facebook's 48% revenue Growth in the first quarter, it is useful to examine the social network's second-quarter momentum.   Expectations rose high Wednesday afternoon, thanks to strong reports from companies in the digital advertising space in the days near Facebook's (NASDAQ:FB) earnings release. Here's an overview of some must-see packages to check out the growth of the tech company that will impact investors.  

1-Revenue growth acceleration

Expectations fell short in the first quarter, when Facebook reported 48% year-over-year revenue growth. So management kept things tight so that growth in the second quarter was the same or better. Thanks to this attitude of the management, the Company showed an annual revenue growth of 56% in the second quarter. Thus, it determined total revenue for the period as $29,1 billion, well ahead of all analysts' estimates.

2-Net income growth

Net income doubled from $5,2 billion to $10,4 billion, highlighting Facebook's strong operating leverage in its business. The increase in profitability was driven by both the company's strong turnover growth and expanding operating margin.

To find out the reasons for Facebook's 48% revenue Growth in the first quarter, it is useful to examine the social network's second-quarter momentum.

  Operating margin increased from 32% to 43% in the second quarter of 2020, resulting in earnings per share of $3.61, exceeding all analysts' estimates of $3.03.

3-Users increased despite all difficulties

Every user metric that Facebook tracks, during the pandemic process, consumers showed a significant growth while staying at home. For example, its daily active users grew 7% year over year to 1.91 billion. Despite all these growths, technology stock was trading lower in after-hours trading following the company's earnings announcement. After 11% annual growth in 2020, Facebook's revenue growth rates rose to 28% and 36% in the third and fourth quarters of last year, respectively. The management said in a statement that it expects slower growth in the second half of 2021. Also, a slowdown makes intuitive sense in light of the benchmarks Facebook will be used to.  

Source: The Motley Fool

 

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