Facebook reported its slowest revenue growth since its 2012 IPO, but still blew past analysts' estimates. Its stock rose more than 6% in extended trading, positioning it to hit a record on Friday.
Here's what Facebook reported:
Facebook said that its user growth reflects increased engagement from consumers who are spending more time at home, though as economies open up, at least outside the U.S., that's starting to change.
"We are seeing signs of normalization in user growth and engagement as shelter in-place measures have eased around the world, particularly in developed markets where Facebook's penetration is higher," the company said in the statement.
The company is also seeing better-than-expected revenue per user, showing that it continues to have pricing power when it comes to big brands advertising on the site.
In the U.S. and Canada, Facebook's user base rose to 198 million daily active users from 195 million a quarter earlier. Its user base in Europe remained flat at 305 million daily active users in the prior quarter.
Facebook said it counts 3.14 billion monthly users across its family of apps, compared to 2.99 billion in the previous quarter. This metric is used to measure Facebook's total user base across its main app, Instagram, Messenger and WhatsApp.
Facebook Chief Financial Officer David Wehner said the company expects its daily and monthly users will be flat or slightly down in regions around the world where Covid-19 shelter-in-place restrictions continue to ease.
The company forecast revenue growth for the third quarter of about 10%, beating analysts' expectations for growth of 7.9%.
Facebook said its forecast, while topping projections, takes into account ongoing headwinds, including economic volatility, the ad boycott, regulations around ad targeting and changes to Apple's upcoming iOS 14 operating system, which Wehner said could hurt Facebook's targeting abilities.
In mid-June, activists launched a campaign urging brands to suspend their advertisements on Facebooks throughout July in protest of hate speech and misinformation on the site. Coca-Cola, Starbucks, and Volkswagen, are among the many participants. Facebook said that through the first three weeks of July, its year-over-year revenue growth was about 10%.
As of Thursday's close, Facebook shares were up 14% this year, topping the 0.5% gain for the S&P 500. The stock topped $252 in extended trading, above its record intraday high of $250.15 earlier this month.
Facebook's "Other" revenue came in at $366 million for the quarter, up 40% compared to last year. This includes sales of Oculus virtual reality headsets and the Portal video-chatting devices.
Facebook's expenses in the second quarter were up 24% from a year earlier, excluding the company's settlement with the Federal Trade Commission a year ago. That was a smaller increase than in the first quarter, primarily because of a decline in costs related to travel and events as a result of employees working from home, Wehner said.
The second-quarter results come a day after CEO Mark Zuckerberg's testimony on Wednesday before the House Antitrust Subcommittee, alongside the CEOs of Amazon, Apple and Google. During the hearing, Zuckerberg was criticized for Facebook's acquisitions of Instagram and WhatsApp, its enforcement of policies against competitors like Pinterest and the way that it's copied rivals like Snap.