Facebook stock rallied in after-hours trade on Wednesday as first-quarter results topped expectations on both the top and bottom lines.
The social media giant reported earnings per share, excluding items, of $1.89 on $15.08 billion in revenue for the first quarter. Earnings were up That beat expectations from Investing.com for earnings of $1.61 a share on $14.97 billion in revenue.
Monthly active users (MAUs), one of the key metrics that analysts use to gauge the health of the company, increased 8% to 2.38 billion in the first quarter, above estimates for 2.36 billion. Daily active users (DAUs) showed robust growth for the quarter, rising 8% to 1.56 billion.
Mobile advertising revenue represented about 93% of advertising revenue for the 2019 first quarter, up from approximately 91% of advertising revenue in the first quarter of 2018.
The social media company saw margins more than halve to 22% for the quarter from 46% a year earlier as costs surged 80% to $11.8 billion. Costs included $3 billion set aside for legal expenses due to the FTC inquiry. That reduced earnings under GAAP rules to 85 cents a share.
“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices … We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” Facebook added.
Facebook’s better-than-expected quarterly results came as CEO Mark Zuckerberg reiterated plans to ramp up spending to beef up security on the platform in the wake of numerous security breaches.