Facebook CFO David Wehner said Wednesday that while the company has seen its advertising revenue start to stabilize amid the Covid-19 pandemic, it could be in for another drop and that "the outlook is really uncertain."
Facebook shares soared more than 10% in after-hours trading Wednesday after the company announced first-quarter results. The company noted a drop in advertising revenue in March due to the coronavirus pandemic, but is now seeing signs of stabilization.
"After the initial steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April, where advertising revenue has been approximately flat compared to the same period a year ago, down from the 17% year-over-year growth in the first quarter of 2020," Facebook said in its earnings report.
"The April trends reflect weakness across all of our user geographies as most of our major countries have had some sort of shelter-in-place guidelines in effect."
Wehner remains cautious on his outlook for the second quarter, however.
"We know economists are calling broadly for a GDP contraction in Q2 that's pretty substantial globally," Wehner told CNBC's "Closing Bell." "We know that advertising tends to be very sensitive to the macroeconomic climate. We really have a very cautious outlook on how things are going to develop."
Wehner's comments echo those made by Alphabet in its first quarter earnings Tuesday. The company, which also heavily relies on its advertising business, said its ad revenue was starting to show signs of recovery after a steep drop off in March.
"The decline in our Search and other ads revenue was abrupt in March, and although we're seeing some early signs at this point that users are returning to more commercial behavior, it's not clear how durable or monetizable that will be," Alphabet's CFO Ruth Porat said during the company's earnings call.