S&P 500 Had Its Best January Since 1987

Every single potential negative story about the company gets magnified because the media knows it will generate clicks. However, the #DeleteFacebook movement wasn’t as popular as some thought.

S&P 500 - Details Of The Quarter

As you can see from the chart below, quarter over quarter monthly active user growth accelerated to 2.2% from 1.7%. Furthermore, the ratio of daily active users to monthly active users only fell 0.2% to 65.6%. 

Revenues were up 30%. Operating margins were up 4% to 46%. The number of employees spiked 41.8% which increases the odds Facebook will take control of its platform and avoid unscrupulous behavior. R&D as a percent of revenue fell from 19.4% to 16.95%, but sales and marketing as a percent of revenue was up 0.6% to 14.6%.

(Click on image to enlarge)

greatFBq4 CHART

S&P 500 - Facebook Has Killed Snapchat

Earnings per share were up 65% year over year. This is the type of quarter we came to expect from Facebook up until the Cambridge Analytica scandal. This was a great quarter because estimates were so low, and the sentiment was as weak as it could get. 

Now we’re back with a company that destroyed its main competitor, Snapchat, by legally copying its main product which is stories. Users on Facebook, WhatsApp, and Instagram post a combined 1 billion stories per day. Instagram has 500 million daily active stories users. Of the 7 million advertisers Facebook services, 2 million use the stories feature. Facebook is legendary at monetizing features and apps. 

Facebook has destroyed Snapchat to the point where I think it’s fair to say Twitter is back to being its main competitor.

S&P 500 - Change In Reporting

Facebook announced it will change the way it reports user numbers sometime in the future. It is going to count the total users on its 3 platforms instead of singling out just the main app. 

In this quarter, Facebook’s family of apps had 2.7 billion monthly active users which is up from 2.6 billion last quarter. Some investors are comparing this to Apple not giving out the specifics of iPhone unit growth. 

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