Facebook’s revenue was up by 50 percent over the same period last year, to $7.1 billion. Net income was $2.37 billion, up 165 percent compared to its profit for the same period in 2015.
And then the bomb shell.
“Over the past two years we have averaged about 50 percent revenue growth in advertising. Ad load has been one of the three primary factors fueling that growth,” CFO Dave Wehner said on Wednesday’s earnings call. “With a much smaller contribution from this factor going forward, we expect to see ad revenue growth rates come down meaningfully.”
A few sentences later he added this: “We anticipate 2017 will be an aggressive investment year.” Translation: Facebook plans to increase spending in 2017.
And with these bits of info stock was down 9 percent in after-hours trading due to less profits from ad revenue and investment which will erode profits.
However, its a good day for Facebook!