After years of being a Wall Street darling, social network Facebook (META -5.68%) fell from favor in the second half of 2018 as growth slowed and data and privacy concerns mounted. Shares plummeted 40% between the middle of last summer and the end of 2018.

Facebook's fourth-quarter update this week gave the company a chance to prove its business can still fire on all cylinders even as it faces heightened scrutiny and ramps up spending on security and privacy. Fortunately for shareholders, the company didn't let down. Revenue decelerated less than expected and earnings per share increased despite soaring costs.

Here's a closer look at the quarter's results.

Facebook CEO Mark Zuckerberg discusses the company's 10-year road map at F8 2018.

Facebook CEO Mark Zuckerberg. Image source: Facebook.

Facebook's fourth-quarter results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Change


$16.9 billion

$13 billion


Operating margin




Earnings per share




Data source: Facebook fourth-quarter earnings release.

Helped by a growing community and an increase in ad impressions, Facebook's revenue increased 30% year over year to $16.9 billion. This is down from 33% revenue growth in the company's prior quarter. But management had guided for revenue growth for the period to be between 24% and 28%.

Earnings per share rose 65% year over year to $2.38. When adjusting to exclude the impact of a one-time charge to earnings per share in the year-ago quarter related to the 2017 Tax Cuts and Jobs Act, earnings per share rose just 8%. But this is a notable increase in light of the company's 62% year-over-year increase in costs and expenses during the quarter.

Fourth-quarter highlights

  • Facebook's monthly active users rose 9% year over year to 2.32 billion.
  • Daily active users increased 9% year over year to 1.52 billion.
  • Facebook said it has 7 million active advertisers across its services, up from "more than 6 million" in the company's prior quarter.
  • Daily active users increased sequentially in all four of the company's geographic segments, including Europe, which saw daily active users decrease sequentially in both Q2 and Q3 of last year.
  • The average price per ad decreased 2% year over year across Facebook's platforms, but ad impressions increased 34% year over year.
  • Facebook said there are now 2.7 billion people using Facebook, Instagram, WhatsApp, or Messenger every month, up from 2.6 billion in Q3.

Looking ahead

For its first quarter, management said it expects the company's revenue growth to continue to decelerate. "In Q1, we expect our total revenue growth rate to decelerate by a mid-single digit percentage on a constant currency basis compared to the Q4 rate," said Facebook CFO David Wehner in the company's fourth-quarter earnings call. This implies a year-over-year revenue growth rate in Q1 of approximately 24% to 26%. In addition, Wehner said the company expects further sequential deceleration in quarterly year-over-year revenue growth rates throughout 2019.

Facebook maintained its guidance for full-year 2019 expenses to grow 40% to 50% compared to expenses in 2018.

Check out the latest Facebook earnings call transcript.