Facebook Profits Jump 17 Percent
The results in the latest quarter are a sign of the company’s financial strength as it faces a public relations crisis.,
Facebook profits jump 17 percent.
By Mike Isaac
- Oct. 25, 2021Updated 5:07 p.m. ET
Facebook said on Monday that revenue rose 35 percent to $29 billion in the three months ending in September compared with the same period last year, while profits rose 17 percent to $9.2 billion, a sign of the social network’s financial strength as it faces a public relations crisis over troubling disclosures made by a former employee.
Advertising revenue, which is responsible for the vast majority of Facebook’s income, rose 33 percent to $28.3 billion. “Other” revenue, which consists largely of sales of Facebook’s virtual-reality Oculus hardware, rose 195 percent to $734 million.
Some 3.6 billion people now use one of Facebook’s apps every month, up 12 percent from a year earlier.
“We made good progress this quarter and our community continues to grow,” said Mark Zuckerberg, Facebook’s founder and chief executive. “I’m excited about our road map, especially around creators, commerce and helping to build the metaverse” — a vision of the future espoused by technologists in which disparate parts of the digital world will merge with portions of the offline world. Mr. Zuckerberg has said he hopes for Facebook to be known as a “metaverse company” in the years ahead.
The results were a continuation of the company’s strong financial performance during the coronavirus pandemic, which has pushed people indoors toward their computers and other devices.
In recent weeks, though, Facebook has faced intensifying political pressure. Frances Haugen, a former employee who became a whistle-blower, has shared thousands of pages of internal documents and has said that the company chose “profits over people.” The disclosures by Ms. Haugen, first publicized in The Wall Street Journal, ignited a firestorm of criticism from lawmakers, regulators and the public. Lawmakers have focused largely on reports showing how Facebook knew Instagram was worsening body image issues among teenagers, among other issues.
On Monday, more than a dozen news organizations, including The New York Times, published articles based on the Facebook Papers, a cache of documents Ms. Haugen took before she left the company. A few hours later, she testified before British lawmakers, saying that the company was unwilling to stop the harmful aspects of its products because doing so could jeopardize profits and growth.
Facebook appears to be setting itself up for long-term, expensive growth plans. The company said it would break out its Facebook Reality Labs segment into a different reporting unit on its quarterly earnings statements. That segment will be separate from the rest of the company’s so-called “Family of Apps” — Instagram, WhatsApp, Messenger and Facebook proper.
Facebook Reality Labs, or F.R.L., is heavily investing in technologies like virtual and augmented reality. Mr. Zuckerberg’s long-term goal is that the department helps Facebook become a significant player and creator of the so-called metaverse. But right now, the unit spends more than it makes — and will for some time.
“We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years,” the company said in its earnings statement. Facebook expects F.R.L. to bring down its overall 2021 profits by close to $10 billion.
Shares of Facebook jumped 2.6 percent to $337.25 in after-hours trading.