Facebook (FB) reported its Q2 2020 earnings after the closing bell yesterday and delivered more than investors expected. The tech giant beat expectations on all lines: 

• EPS $1.80 on expectations of $1.39
• Ad revenue $18.32 billion on expectations of $16.92 billion
• 1.79 billion daily active users vs. 1.74 billion expected

Facebook’s share price initially surged on the news, jumping over 4% in after-hours trading. However, the enthusiasm faded away as the hours passed, trading ahead of London’s opening up by a mere 0.52%

Facebook Q2 2020 Financial Highlights

A look into the quarter’s financial details reveals another tech company that benefited from people being forced to stay home due to the pandemic. However, while the lockdowns did have a positive influence on the time people spent on Facebook (e.g. to communicate with family and friends, to manage an online business, etc.), the data shows a growing trend started way before the pandemic. In other words, Facebook still runs a sound business model, one that is able to deliver impressive results.

Advertising revenue grew 10% on a YoY basis. After much talk and negative press during the quarter, as some big companies postponed or canceled their Facebook Ads campaigns, advertising revenue kept growing at a double-digit growth rate.

All in all, total revenue increased 11% while total cost increased by only 4% YoY, justifying a 29% jump in income from operations.

Finally, net income, or the bottom line, increased by a whopping 98% when compared with the same period a year ago. All in all, a fantastic financial performance for the quarter.

Leaving financial success apart, Facebook is a social media platform. Naturally, the number of users or user growth and engagement provides a useful insight into how future financial performance may look like.

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Facebook’s daily active users continue on the growth path seen since the second quarter of 2018. In other words, during the three months in the coronavirus pandemic, Faced did not add a significantly high number of new users to its database. Instead, the trend looks solid and rising, especially in Asia-Pacific and the rest of the world, while consolidating in Europe and North America.

Despite the macroeconomic uncertainty, Facebook’s business model continues to deliver. It delivered during economic growth when it was a market leader; it delivers during an economic recession when it remains a market leader.