Facebook missed analyst estimates in several key areas but didn’t lose users despite a massive data breach, the company said in its third-quarter earnings report on Tuesday.
Facebook reported $13.73 billion in revenue, about $50 million below the expected $13.78 billion. It had 1.49 billion daily active users for the quarter, down from the projected 1.51 billion, and 2.27 billion monthly active users, below the expected 2.29 billion. However, Facebook did beat expectations by about 30 cents for its earnings per share, coming in at $1.76.
It looks as if user growth has slowed in North America and Europe, its most important markets. CEO Mark Zuckerberg also warned investors that revenue growth may continue to be underwhelming as Facebook transitions to emphasizing Stories rather than the News Feed. Zuckerberg noted that the shift “hasn’t been as smooth as I’d hoped.”
Though user growth did not beat expectations, it also looks that Facebook didn’t lose users, a fear that investors had going into the call given a major data breach that embroiled the company this quarter, along with the continued fallout from scandals that it has been dealing with over the past year. In September, Facebook disclosed that hackers exploited a vulnerability in the platform that exposed the personal data of approximately 30 million users.
“We have a long road ahead to prevent these kinds of attacks in the future,” Zuckerberg said. He added that he believes the company has made a lot of progress in the last few years with regard to security. “We still have a year before our systems are at the level that we want, but they are getting better every day.”
Zuckerberg also noted that the upcoming U.S. midterm elections will be a major test of the protections that the company introduced after the 2016 election. “With a community of two billion people, we will see all the good and bad that humanity can do, and we will never be perfect, but I’m proud of the work we’re doing here,” the CEO told investors. “We’ve reduced the incentives to spread misinformation, we’re partnering more closely with governments and outside experts to improve security… and we set a new standard for transparency in advertising.”
Facebook’s shares dropped 5 percent upon the initial release of its Q3 figures but rebounded quickly.