The company exceeded revenue expectations and matched estimates for its daily active user growth. Here's what Facebook reported:
The company's earnings per share analyst expectations are not comparable due to the anticipated FTC charge.
The company said it counts 2.7 billion monthly users across the its family of apps, which is unchanged compared to last quarter. Facebook saw its user base in Europe grow to 286 million daily active users, up from 282 million last quarter. The company's user base in the U.S. and Canada remained flat quarter-to-quarter at 186 million. The company said average revenue per user was $6.42, up 16% from $5.53 a year ago.
The FTC has been probing Facebook since March 2018 following reports that political consulting firm Cambridge Analytica had improperly access the data of 87 million Facebook users. To date, the FTC's biggest fine against a tech company was in 2012 when Google agreed to pay a $22.5 million penalty due to its privacy practices.
"We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion," Facebook said in a statement. "The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome."
The company is undergoing a major transition from News Feed ads as it grows ad revenue from its newer Stories products. CEO Mark Zuckerberg on Wednesday said Facebook, Messenger and WhatsApp's Stories features now have 500 million daily active users, joining Instagram, which hit that mark in January. Facebook COO Sheryl Sandberg on Wednesday said the company now has 3 million advertisers using Stories ads across Instagram, Facebook and Messenger.
"Stories are an increasingly important growth opportunity," she said. "We are helping advertisers keep up with the shift in how people are sharing just as we did with mobile."
Stories was the largest contributor of year-to-year impression growth for the company during the first quarter, Chief Financial Officer David Wehner told analysts on Wednesday.
"Ultimately, we believe we can increase demand for Stories as we attract more advertisers and bring more effective direct response units to Stories, and over time that will play through to increased prices," Wehner said.
During the call with analysts, Zuckerberg touched on his March call for regulation, saying he doesn't think people "want private companies making so many decisions around speech, elections and data privacy without a more robust democratic process."
"There should be a public process for determining what is allowed and required for keeping harmful content to a minimum," he said.
In a March memo, Zuckerberg wrote that the future of the company will be "private, encrypted services." The company is working to integrate the messaging functions of WhatsApp, Messenger and Instagram, and Zuckerberg said he expects "Messenger and WhatsApp to become the main ways people communicate on the Facebook network."
The company's shift to privacy will "be a central focus for the company for the next five years or longer," Zuckerberg said on Wednesday. He added that he does not expect the privacy pivot to be a real contributor to Facebook's business for "the next couple of years."
Zuckerberg said that as the company builds out the Facebook Marketplace and Instagram's new e-commerce feature, that will result in more "private interactions around payments." These types of features will help businesses make sales on Facebook and lead them to spend more on advertisements, Zuckerberg said.
"If payments becomes a really important part of what we do, we'll have some options and choices about how we choose to have the revenue flow to us in the future," Zuckerberg said.