Facebook's (META -1.12%) first-quarter results highlighted a further deceleration in the company's top-line growth, as expected. But the social network's lucrative business model is still charging ahead, delivering meaty value for shareholders.

Here's a look at the results, including how Facebook still managed to turn a profit even as it took a $3 billion legal charge during the quarter.

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

Facebook CEO Mark Zuckerberg. Image source: Facebook.

Facebook's first-quarter results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Change


$14.9 billion

$11.8 billion


Earnings per share




Daily active users

1.56 billion

1.45 billion


Data source: Facebook first-quarter earnings release. Table by author.

Facebook's revenue increased 26% year over year, to $14.9 billion. This was a deceleration compared to 30% revenue growth in the fourth quarter of 2018 and 33% growth in Q3. Revenue, however, was up 30% on a constant-currency basis.

First-quarter highlights

  • U.S. and Canada ad revenue increased 30% year over year.
  • Asia-Pacific ad revenue rose 28%.
  • "Rest of world" ad revenue gained 21%.
  • Average price per ad decreased 4% year over year, but ad impressions rose 32% over the same time frame.
  • Average revenue per user increased 16% year over year, to $6.42, with particular strength in the U.S. and Canada.
  • Daily active users rose 8% year over year and 3% sequentially.
  • Earnings per share (EPS) for the quarter took a $1.04 hit due to a $3 billion accrual related to the Federal Trade Commission's inquiry into Facebook's data and privacy practices.
  • Stories experiences on Facebook, Messenger, Instagram, and WhatsApp now each have over a billion daily active users.

What management had to say

Facebook was particularly pleased with the performance of its stories format on its family of social networks. "Facebook and Instagram feed ads make up the bulk of our business today," said Facebook COO Sheryl Sandberg during Facebook's earnings call. "We expect that to continue, but Stories are an increasingly important growth opportunity." She added that there are already 3 million advertisers using stories.

Instagram, in particular, is already playing a key role in ad impression growth. Facebook CFO David Wehner said that Instagram Stories and Instagram Feed, alongside the Facebook News Feed, were primary drivers for ad impression growth during the quarter. However, stories ads monetize at lower rates, explaining the company's 4% year-over-year decline in average price per ad. But a 32% increase in ad impressions more than offset this decline.

Looking ahead

Management boosted its outlook for full-year expense growth, reflecting its $3 billion legal accrual. Specifically, management expects full-year expenses to increase 47% to 55% year over year, up from previous guidance for expenses to rise 40% to 50%.

Management also said it expects year-over-year revenue growth to continue to decelerate on a constant-currency basis as the year goes on.

Finally, Facebook said it now forecasts capital expenditures for the year to be between $17 billion and $19 billion, down from a previous outlook for $18 to $20 billion. "Our capital expenditures are driven primarily by our continued investment in data centers and servers," management said.