The last year has been challenging for Facebook (META 0.27%) investors. The social media giant has endured a string of scandals, data breaches, and increasing calls for oversight by governments around the world. Additionally, by taking the steps necessary to secure its platform and users, Facebook is spending hand over fist, even in the face of slowing revenue growth.

Facebook will update investors on its progress when the company reports its first quarter results after the market closes on Wednesday, April 24. Let's recap Facebook's fourth-quarter results and review a recent shareholder proposal to see if they contain any insight into what investors can expect when Facebook reports earnings.

The Facebook thumbs up logo on the street sign at the entrance to its headquarters.

Image source: Facebook.

Slowing revenue growth

Investors breathed a sigh of relief when Facebook's fourth-quarter report wasn't nearly as dire as many had expected. The company reported revenue of $16.91 billion, up 30% year over year, but down sequentially from the third quarter. Management had warned investors to expect growth to decline by mid- to high single digits. This marked the fourth consecutive quarter of slowing growth, from the 50%, 42% and 33% year-over-year growth Facebook achieved in the first three quarters of 2018.

Earnings per share of $2.38 increased 65% year over year, but benefited from a one-time charge of $0.77 in the prior-year quarter. Adjusting for that charge resulted in earnings that grew by 8%, the result of expenses that soared 62% year over year as Facebook continues to make necessary investments to safeguard the platform and its users from bad actors and outside interference.

User growth continues its slow march upward, with monthly active users and daily active users each climbing around 9%.

Recent events

Investors may finally be growing weary of the endless parade of scandals that have plagued the social media giant over the past year. In a proxy filing last week, shareholders proposed to eliminate Facebook's dual-class stock system and replace it with a one-share one-vote regime. 

The proposal recommends that the current share structure be phased out over time. The filing argues that chairman and CEO Mark Zuckerberg's disproportionate control of the company puts shareholders at a disadvantage, giving him more than half the voting power even though he owns only 13% of the economic value of the company. "Without equal voting rights," the proposal said, "shareholders cannot hold management accountable."

As evidence of the need for change, the proposal noted that the stock had fallen more than 40% since last July, though it has regained some ground and is now down just 16% from last summer's highs.

It's important to note that, with nearly 60% of the voting power, Zuckerberg will easily vote down the very proposal that seeks to dislodge him, so the shareholder proposal is purely symbolic.

What the results could look like

Since the onset of its difficulties last year and with the momentous spending necessary to secure the platform, Facebook has been reluctant to provide definite guidance. The company expects revenue growth to continue to decelerate by a mid-single-digit percentage, excluding the impact of foreign currency exchange rates. Management has said revenue growth will continue to decelerate throughout 2019.

We can turn to Wall Street for more specific guidance, though we don't want to fall victim to its short-term mindset. Analysts' consensus estimates are calling for revenue of $14.97 billion, up 25% year over year, but down sequentially from the 30% growth in Q4. Analysts are also expecting earnings per share of $1.63, a decline of about 4% compared to the prior-year quarter.

The troubles at Facebook were years in the making, and the solutions may take nearly as long to implement. Investors should brace themselves for more decelerating growth and increased spending. We'll know more when Facebook reports earnings on Wednesday, April 24.