Can Mark Zuckerberg Outgrow His Own Targets?
Apple, Google, Amazon, Microsoft and LinkedIn all defied the strong dollar and turned in jaw-dropping sales growth. Can Facebook do the same?
That's the question as we await the social giant's third quarter results and fourth quarter guidance on Wednesday. The consensus expectation from Wall Street is for sales to come in at $4.36 billion, a growth rate slightly below the quarter before. The reason: Chief Financial Officer Dave Wehner dutifully lowered expectations on last quarter's earnings call.
"Since the first quarter of 2014, we have seen year‐over‐year advertising revenue growth rates decline each subsequent quarter," he said. "We expect this trend to continue in Q3 and Q4 as we continue to grow off a much larger base and face currency headwinds due to the strong dollar."
In other words, it's hard to keep growing so fast when you're this big, and when international growth translates into fewer dollars than it used to.
... it's hard to keep growing so fast when you're this big, and when international growth translates into fewer dollars than it used to.
Even with that reasonable caution in mind, there's some reason to hope Facebook may have done better than it projected. Back on August 29, about two thirds of the way through the quarter, CEO Mark Zuckerberg announced that Facebook had tallied a billion logged-in users in a single day. Since Facebook hit that number for the first time late in the quarter, it's unlikely that the average number of daily active users will come in much above 1 billion, if it's above that number at all. But even if it comes in a little over, it will be close to the year-over-year growth rate the company logged during the previous two quarters. The rise of Instagram ads and video ads should also provide a boost, which could nudge revenue above the consensus number.
Even less clear is how cautious Facebook will be with its holiday quarter guidance this year. The trends certainly look promising: Apple's iPhone sales look healthy as do Google's video views and LinkedIn's user engagement. All of that suggests people are spending copious quality time with their smartphones, which ends up stuffing dollars into Facebook's pockets.
Investors seem to expect good things already, so anyone trying to trade earnings should be careful. The stock is up 15% in the past month.
Humane Business Founder @ Retail Market Practise - B.Com(Hons), MA, SIIRSM - Stress Reduction Consultant emfstrategy.com Future-proofing assets while de-stressing people & spaces Today!
9 年I don't doubt the genius of Facebook although my view is they'll continue to grow but at a diminishing rate. Unless of course the genius decides to buy another faster performing platform like Instagram - which has made the growing kind of news quite often of late...
Vision Leader at #Showthemflames Productions, - Chairperson of Moshito Music Conference and Exhibitions and he is the Vice Chairperson of The Association of Independent Record Companies of South Africa.
9 年he is a game changer with innovative abilities. a person who pulls a sup rice on you is capable of repeating that again and again.
Blog de noticias, actualizaciones tecnologicas, medios siciales, marketing digital, contenidos, etc...
9 年M. Zuckerber is a genius. He can do anything he wants to his company Facebook Inc.
Result driven goal orientated leader looking out for life's next challenge or adventure.
9 年You win some you lose some that is the game we play in business everyday day day out. The one thing you can completely count on is that nothing is for certain. No matter what company you belong to everything can change pretty suddenly and for no logical reason. Social media is a place that people dump money all the time. People do not even realize how much they are spending like impulse buying at a supermarket. I am just waiting for one of these titans of silicon valley to collapse. So people can see truly how many jobs are made by them and how dependent people are on these social sites.