Facebook’s stock jumped into record territory on Wednesday after the social media giant reported stronger-than-expected results for the first quarter thanks to soaring ad revenue.
Chief executive Mark Zuckerberg said the extra money means the company will invest more in new areas of potential growth — including augmented and virtual reality, commerce, business messaging and content creators, such as people who make videos, write newsletters and host podcasts.
He said in a conference call with analysts: “I believe that augmented and virtual reality are going to enable a deeper sense of presence and social connection than any existing platform.”
Facebook is also expanding its e-commerce offerings and the use of its messaging services for businesses. As for the creator economy, the company is getting into audio, podcasts and independent publishing similar to Substack.
The company said it earned 9.5 billion dollars (£6.8 billion) or 3.3 dollars per share, in the January-March period – up 94% from a year earlier.
Revenue grew 48% to 26.2 billion dollars (£18.9 billion).
The average price of ads on Facebook grew 30% from a year earlier, while the number of ads increased by 12%.
Facebook had 2.85 billion monthly users, on average, in March – up 10% from a year earlier.
Its family of apps — Facebook, Instagram and WhatsApp — had monthly users of 3.45 billion in March.
In January, the company predicted uncertainty for 2021, saying its revenue in the latter half of the year could face significant pressure.
Because revenue grew so quickly in the second half of 2020, Facebook could have trouble keeping up that pace. This uncertainty is now baked into the company’s forecast, so it did not come as a surprise to investors.
Shares of the Menlo Park, California-based company rose 6% to 325.8 dollars in after-hours trading. If the gains hold in Thursday’s regular trading session, it will mark a record high for the stock, which is up 12% so far this year.
Facebook added it expects its second-quarter 2021 revenue growth to stay stable or “modestly accelerate” compared with the growth rate in the first quarter.