Social media giant Facebook reported revenue of $26.2 billion for the quarter that ended March 31, beating Wall Street analysts' expectations Wednesday. The technology company's earnings were up nearly 50% compared to the same period one year earlier, when it reported nearly $18 billion in revenue.
Its number of daily active users rose 8% in the first quarter, to 1.88 billion visitors per day, just below the 1.89 billion forecast.
"We had a strong quarter as we helped people stay connected and businesses grow," Facebook founder and CEO Mark Zuckerberg said. "We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy."
The company's revenue growth was driven largely through paid advertisements, particularly from small and medium-sized businesses. The average price per ad rose 30% year-over-year, the company said.
"Despite several headwinds — such as ongoing antitrust scrutiny, lingering privacy concerns, as well as looming changes which could negatively impact its advertising business — Facebook delivered another blockbuster quarter," said Investing.com analyst Jesse Cohen.
One of Facebook's core efforts is developing tools that help businesses and consumers interact more seamlessly through the platform as the pandemic drives more commerce online.
"For years we've invested in products and tools to support this shift and these investments have helped many businesses reinvent themselves during a pandemic," Chief Operating Officer Sheryl Sandberg said during Wednesday's earnings call with Wall Street analysts.
Last year the company launched Facebook Shops, which allows users to create online stores. Currently, there are more than 1 million active shops and more than 250 million monthly shop visitors, the company said.
Facebook's e-commerce platform is still under development and will be a "multi-year journey," Zuckerberg said Wednesday.
It also strives to be the go-to platform with tools for creators of all kinds who want to monetize their work. "Our goal is to support the full range of human expression and be the best platform for millions of creators to make a living," Zuckerberg said.
The company also said changes to Apple's iOS platform will affect its second-quarter earnings.
Apple's new iPhone software, iOS 14.5, Identifier for Advertisers (IDFA), a unique, random number assigned to each iPhone that helps companies personalize advertisements.and other apps from tracking their activity. The update changes the
Facebook previously objected to the changes, arguing that they would take a large bite out of small business sales.
"We continue to be concerned about the impact it will have on small business to use their advertising budgets effectively," Chief Financial Officer Dave Wehner said. "That said, the impact on our own business, we think will be manageable."
Wehner added that the software update is expected to remain a "headwind" for the company for the rest of the year.