The social media behemoth was relatively unaffected by the COVID-19 pandemic. Its share price even reached new all-time highs this year, making it one of the top technology stocks to own.
Facebook continues its strong track record of delivering good results, with a sparkling set of earnings for the first quarter of 2020. Advertising revenue jumped 17% year over year to $17.4 billion, while total costs and expenses only inched up by 1% year over year. Operating income thus surged by 78% year over year and net income doubled from $2.4 billion to $4.9 billion.
The company also reported continued growth in both its daily active users (DAU) and monthly active users (MAU). DAU increased by 11% year over year to hit 1.7 billion, while MAU was up 9.6% year over year at 2.6 billion. The worldwide average revenue per user also increased from $6.42 to $6.95. The pandemic helped Facebook by increasing user engagement with the company's various social media platforms as people have been forced to stay home amid lockdowns and movement control restrictions.
CEO Mark Zuckerberg remarked in the company's earnings conference call that for the first time, there are now more than 3 billion active users of Facebook, Instagram, WhatsApp, or Messenger each month. In areas hit hardest by the novel coronavirus, messaging volume has increased by 50%, while video and voice calling has more than doubled.
Investors can expect both DAU and MAU to rise in the coming months as more people rely on social media to pass the time and communicate with others while cooped up at home. Zuckerberg warned that the spike in user engagement might be temporary, but at least some proportion of new users will likely stick with Facebook's brands even after the crisis has passed.
What could negatively impact Facebook is the recently announced boycott of the platform by numerous advertisers. Many major brands have temporarily halted ad spending on the social network due to its perceived inability or unwillingness to root out hate and disinformation on its site. Facebook is actively engaging advertisers in talks to break the impasse, but these talks have not been successful thus far.