[HN Gopher] Facebook Reports First Quarter 2021 Results [pdf]
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Facebook Reports First Quarter 2021 Results [pdf]
Author : mfiguiere
Score : 50 points
Date : 2021-04-28 20:32 UTC (2 hours ago)
(HTM) web link (s21.q4cdn.com)
(TXT) w3m dump (s21.q4cdn.com)
| kstrauser wrote:
| > In the third and fourth quarters of 2021, we expect year-over-
| year total revenue growth rates to significantly decelerate
| sequentially as we lap periods of increasingly strong growth. We
| continue to expect increased ad targeting headwinds in 2021 from
| regulatory and platform changes, notably the recently-launched
| iOS 14.5 update, which we expect to begin having an impact in the
| second quarter. This is factored into our outlook.
|
| This isn't the best time to depend on an anti-privacy business
| model, it seems.
| hiralal wrote:
| Ehh - Facebook will just show more ads to account for the gap
| due to less personalized ads. And users will still come back..
| throwaway5752 wrote:
| What is q4cdn? I did a whois, and I tried to find more details.
| I'm not sure why this wouldn't be directly from a Facebook IR or
| news wire hosted press release. I'd like to have some knowledge
| of who/what is running it, since this is a pdf.
| fred256 wrote:
| The FB investor relations site links to the exact same URL.
| throwaway5752 wrote:
| I was updating my post accordingly:
| https://investor.fb.com/investor-events/event-
| details/2021/F... links to it.
|
| I'm still curious, but less concerned. They appear to use
| Cloudflare, AWS for DNS, and registered through Godaddy. I
| just haven't figured out who runs it. I wouldn't be surprised
| if it if were via business wire, but I'm surprised it's hard
| to find out. Multiple companys' IR teams seem to use it based
| on some cursory querying.
| fred256 wrote:
| Looks like q4inc.com is the corporate website. (Oh I see
| this was mentioned in a sibling comment already)
| opheliate wrote:
| Just a guess: Probably the CDN for Q4, which would make sense,
| as they're an investor relations company.
| https://www.q4inc.com/
| throwaway5752 wrote:
| Thanks! I bet you're right,
| https://www.q4inc.com/soc2/default.aspx agrees with what
| based on what they say about their stack.
|
| https://www.q4inc.com/products/surveillance/default.aspx is a
| bit disturbing, but I can understand why it sells.
| halotrope wrote:
| You did not see anything yet. Wait till they put ads in WhatsApp.
| srckinase123 wrote:
| How does one learn to analyze these quarterly results and other
| financial reports (e.g., 10-K)? What books/videos/courses would
| take an absolute beginner towards becoming an expert? Would
| proper analysis of these results/other financial reports enable
| one to decide which company is a worthwhile investment? It seems
| like learning accounting would be a good start.
| ericjang wrote:
| Martin Shkreli (yes, The pharma bro) has an excellent set of
| youtube tutorials on reading 10-k and 10-q forms to compile DCF
| valuation models. His video series focuses on household tech
| names
|
| here's the first one in the series:
| https://www.youtube.com/watch?v=VI_riscmviI
| srckinase123 wrote:
| Thanks for the link. If I remember, there was one Shkreli
| video where he mentions if you are not working at a hedge
| fund using large sums of other people's money, then the
| amount of profit one would make actively investing their own
| money is not worth the amount of research it takes to make
| informative investments. Not sure if that is exactly what he
| said, so don't quote me on it.
|
| What's your take on retail investors and active investing,
| assuming that the retail investor does not have access to
| large sums of money.
| goler wrote:
| I recommend Aswath Damodaran's valuation course:
| http://pages.stern.nyu.edu/~adamodar/New_Home_Page/webcasteq...
|
| If you don't have time for the full course, I've also heard
| good things about Damodaran's Little Book of Valuation.
| srckinase123 wrote:
| Thanks for the course link. Does the course assume any
| prerequisites?
| goler wrote:
| Not really, but familiarity with accounting terms and some
| basic investment concepts helps. The course is designed for
| NYU MBA students and many of them have already taken
| corporate finance which gives them a head start. Damodaran
| puts all of the course info online (notes, lectures, emails
| to students, etc), though, which allows you to go at your
| own pace. The emails sometimes contain pointers to helpful
| supplemental materials.
|
| If you check out the email archives [1], you'll see that
| Damodaran wrote this in the first message: "1. Preclass
| work: I know that some of you are worried about the class
| but relax! If you can add, subtract, divide and multiply,
| you are pretty much home free... In are you have forgotten
| your accounting, I have added my version (which would
| probably not be approved of by your accounting professor)
| of an accounting class to my website: http://people.stern.n
| yu.edu/adamodar/New_Home_Page/webcastac... If you want to
| get a jump on the class, you can go to the class web page:
| http://people.stern.nyu.edu/adamodar/New_Home_Page/equity.h
| t... "
|
| [1] http://people.stern.nyu.edu/adamodar/New_Home_Page/eqem
| ail.h...
| srckinase123 wrote:
| Thanks for the detailed insight. Looks like a great
| wealth of information.
| jjmorrison wrote:
| > 8% YoY user growth and 46% YoY revenue growth
|
| Curious how well understood the mechanics are of this. I've been
| fascinated by how clever the whole model works. They know revenue
| growth needs to outpace their ability to increase available ad
| space (so user growth or attention growth). So they are heavily
| reliant on data to improve ad targeting so they can drive more
| conversion per ad impression.
|
| The power of the ad auction model is that 100% of the improved
| efficiency of ad targeting is translated to revenue for Facebook.
| Advertisers will pay $X for a conversion in their ROI
| calculations - so Facebook will get the maximum amount the market
| will pay a certain for a given conversion. Advertisers are
| actually a little worst off as targeting gets better - the
| conversion cost stays the same and the number of impressions goes
| down.
|
| To keep growing revenue at this pace, Facebook needs to
| continually feed the beast with better and better data so they
| can squeeze more and more conversions out of their existing ad
| space.
|
| The only other two ways to grow revenue is more users and more
| time from users. Which is getting tougher and tougher. That's why
| this Apple fight is so important to Facebook - it's really their
| lifeblood right now.
| randomsearch wrote:
| It's odd that their DAU are increasing, because at least in the
| western countries I'm aware of, young people don't use Facebook
| much. So I'd expect a gentle decline over time. Where is the
| growth coming from?
| babelfish wrote:
| The majority of humans do not live in western countries
| nerfhammer wrote:
| young people use instagram constantly
| cm2012 wrote:
| Exactly this. FB ad targeting is revolutionary for companies to
| match with prospective users. I've managed 50m+ in FB spend,
| getting start-ups in front of some really niche audiences, and
| nothing compares to the FB algo.
| ah88 wrote:
| They have been focusing on selling other products besides ads
| so curious how much of that revenue growth is from ads vs other
| products.
| sanxiyn wrote:
| It's all there in financial statement. It's all ads.
| bigzyg33k wrote:
| They mention this in the earnings report
|
| Advertising accounted for $25.4 Billion of their revenue, up
| from $17.4 Billion in the same quarter last year, an increase
| of 46%
|
| Revenue from other sources was $732 Million, up from $297
| million in the same quarter last year, an increase of 146%
| jjmorrison wrote:
| Not sure if the breakdown is exact but financials say $25B in
| ads, and $700M in "other"
| wsetchell wrote:
| Increased signal (e.g. more or different data) is one of the
| many levers to increase ad value.
|
| Without changing signals you can still make meaningful long
| term progress through ranking, delivery, and format
| improvements.
| jjmorrison wrote:
| True. They do seem quite obsessed with slurping more data. i
| wonder how much it would hurt them in the long term if they
| couldn't get more.
| s3r3nity wrote:
| > Facebook daily active users (DAUs) - DAUs were 1.88 billion on
| average for March 2021, an increase of 8% year-over-year.
|
| > Facebook monthly active users (MAUs) - MAUs were 2.85 billion
| as of March 31, 2021, an increase of 10% year-over-year.
|
| Let this be another sign that Facebook's demise is greatly
| exaggerated: their daily & monthly active user counts are _still
| growing_ ... and by non-trivial amounts.
|
| Almost _2 billion_ people visit Facebook at least once _daily_
| .... that's mind-blowing.
|
| Yes, I know: the common HN refrain is "how many are fake / bot
| accounts?" etc. etc. Until that's proven to be a real problem,
| which would lead to significant lawsuits for misleading
| shareholders, I will lean on the hypothesis that the significant
| majority of this growth is "real."
|
| You can play "chicken little" all you want and say "Facebook will
| go away just like MySpace," but doubters should be sweating right
| now, as the numbers refuse to show that.
| gogopuppygogo wrote:
| Facebook has made their product emotionally addictive.
|
| Their biggest threat now is regulatory changes to consumer
| data. I haven't read the filings but I'd expect their lobbying
| efforts to be in full gear.
| jjmorrison wrote:
| Bots or not - that $25B is coming from somewhere.
|
| I'm most sad that so many smart humans are working on this of
| all the important problems in the world.
|
| Makes loads of money though, so won't change until incentives
| change.
| baby wrote:
| I don't work there anymore, but I always liked the idea of
| connecting the world. Sure a service without ads would be
| great, but you gotta pay the bill and you can't connect the
| world with a monthly fee. I get that this is HN and the
| majority thinks "this is bad", but just writing this because
| there are people like me with a different opinion.
| cm2012 wrote:
| Solving world hunger is obviously better than ads, but I'd
| say in the scheme of things tech people spend their time on,
| ad improvements is middling in importance? It's not the
| bottom.
|
| Good ad targeting means:
|
| 1) New small businesses (on Shopify) can reach customers
| without going through retail gatekeepers. Ask any Shopify
| seller, nothing beats FB.
|
| 2) New challenger SaaS brands can get in front of customers
| to compete with mammoth corporate brands with worse software
| (I see this all the time on my job).
|
| 3) Without good ad targeting, only bottom hanging fruit
| advertisers that appeal to the lowest common denominator can
| afford to spend. Weight loss, teeth whitening, etc. Good ad
| targeting means a better user experience with ads.
| truth_ wrote:
| Not completely unrelated: FB makes killer programming tools
| loved by most.
|
| - PyTorch for Deep Learning overtook TensorFlow in Academia
| and Competitions and breathing down the neck in Industry
| despite the latter having significant inertia.
|
| - React.js is THE hottest frontend framework now.
|
| - GraphQL is highly adopted in the industry.
|
| I want FB to exist as long as possible and very successfully
| as I do not want the tools to go away. I have worked with two
| of the three, and I love them. It had made me fond of and
| loyal to FB and FAIR.
| azangru wrote:
| > React.js is THE hottest frontend framework now.
|
| I am not quite sure what you mean by "the hottest". Would
| you say that jquery was THE hottest frontend library circa
| 2014, or that Wordpress it THE hottest CMS now?
|
| React is hugely popular, no doubt about it. It absolutely
| was the hottest frontend framework somewhere around 2015.
| It's more complicated now, I think.
| s3r3nity wrote:
| > I'm most sad that so many smart humans are working on this
| of all the important problems in the world.
|
| Depends upon values and perspectives of the problem. Part of
| me agrees with you, and yet part of me is sympathetic to the
| goals of connecting the world, encouraging community
| discussion, and bringing transparency to social issues and
| reducing the power of governments to control the narratives.
| - to the point that many governments fear FB and ban it
| outright. (e.g. Do you think China banned Facebook because of
| "misinformation?" Or that the ratio of real information to
| misinformation was a little too much for them to lose control
| of their propaganda narratives?)
|
| Would I say that's more important than sustainable farming /
| agricultural tech? I don't think so - but to each their own.
| nine_k wrote:
| Quite interesting that the ad revenue growth is mostly from ads
| commanding a higher price, and only marginally because they
| serve more ads.
|
| FB's targeting is pretty good, if for no other reason then
| because they see all the social stuff users do even without the
| need for crutches like third-party cookies. Likely customers
| are willing to pay increasingly more for a well-targeted ad.
| [deleted]
| JohnJamesRambo wrote:
| Why would I be sweating that Facebook is adding users?
| Disappointed, more like, because the science shows that
| Facebook actively damages people's mental health and I hope we
| all want people to feel good. Your numbers show that a almost 2
| billion people feel worse each day from Facebook.
| s3r3nity wrote:
| If I drink enough water to kill myself from water poisoning /
| overhydration, that isn't a good reason to ban water. It's
| more like "user error."
|
| Too much of _anything_ is bad.
|
| So it's a strong claim to say "2 billion people feel worse
| each day," when it could be that the majority use it in
| moderation and probably feel some positive utility from it.
| baby wrote:
| > because the science shows that Facebook actively damages
| people's mental health
|
| come on...
| cm2012 wrote:
| Total daily users increased 8% but ad revenue improved 46%
| because of competition for ad slots. This is because FB targeting
| works really well, better than any other attention based ad
| channel. 90% of major ad spenders on FB nowadays are very direct
| response, ROI based marketing orgs, and they spend where the
| results are.
| subpixel wrote:
| I wonder how many FB users are like me: people who don't identify
| as FB users bur who do actually use FB out of necessity, and
| pretty often.
|
| I've moved several times in the last year, and (unfortunately) FB
| is how I:
|
| - connect with local groups of parents (FB has no competition in
| this vertical)
|
| - connect with local athletic groups (Strava and others exist,
| but try planning an outing on Strava)
|
| - see what the local take-out restaurants are offering today (FB
| and Instagram own this niche, which has exploded)
|
| - get recommendations on contractors, service providers, etc
| (often passively, by searching groups for recent answers to
| someone else asking the same question)
|
| - find out about when local organizations or companies I care
| about are doing something (you can't really rely on libraries
| etc. announcing things via email anymore, but they won't do
| anything without posting to FB)
|
| On top of all this, I use Instagram, not only to post photos but
| also to explore the area around where we've settled. I search by
| location a ton and have found it's a great way to learn about
| what people do and where they go when you're not able to meet
| people and get recommendations the normal way.
|
| So yeah, I rage quit previously but FB has got my number again.
| [deleted]
| Dejital wrote:
| After I started posting "Stories" with Facebook, which shows
| you viewers as well as "likers", I was surprised by how many
| lurkers there really are. Even lurkers are very much Facebook
| users, especially when serving ads is concerned.
| mam3 wrote:
| "I am not really a car driver but i use car when i need it."
|
| Doesnt make more sense that what you say. You ARE a facebook
| user.
| Udik wrote:
| Sounds like he's using it in an entirely different way from
| what used to be Facebook's focus. It's not keeping in touch
| with other people any more, but rather a collection of small
| local-centric services. (Take away restaurants, parents
| group, tradesmen, library, etc.).
| subpixel wrote:
| Yes - and my point being that, to my dismay, FB is the best
| and/or only way of consuming this information because it is
| the primary (increasingly the only) place this information
| is shared.
| [deleted]
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