Measured by almost every important metric, Facebook's (NASDAQ:FB) third quarter proved to be big yet again. Despite analysts' huge expectations for the social network headed into the report, the company beat the consensus analyst estimate for revenue and EPS. But reflecting the rosy outlook already baked into the stock price, Facebook's impressive growth wasn't enough for the stock to jump. After the report, the after-market response was mostly muted. But shares took a dive when Facebook reported slower growth ahead, as well as rising costs. Here's a look at the most important items.

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The good
The consensus estimate going into the quarter for Facebook's non-GAAP EPS and revenue were $0.40 and $3.1 billion, respectively. Actual results were $0.43 and $3.2 billion. These figures were up 59% and 60% from non-GAAP EPS and revenue in the year-ago quarter.

One of the most notable takeaways from the results was just how strongly Facebook's advertising revenue continued to rise. At 92% of revenue, the company's ad revenue is undoubtedly its biggest driver for revenue and EPS. Ad revenue was up 64% from the year-ago quarter. While that's a deceleration from last quarter's 67% growth, the slowdown wasn't nearly as severe as the drop to 67% in Q2 from 82% in Q1.

Monthly active users, or MAUs, hit 1.35 billion, up 14% from the year-ago quarter and 2.5% sequentially. The sequential growth rate was down slightly from 3.2% in Q2.

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Daily active users, or DAUs, were up strongly to 864 million, from 728 million in the year-ago quarter, or 19%. Surprisingly, the sequential growth in DAUs of 4.2% was actually an acceleration from Q2's 3.4% sequential growth.

The bump in Facebook's DAU growth is excellent news. User growth is important to investors. Twitter stock was slammed yesterday on the news of the deceleration in its member growth. Sequential monthly active user growth for Twitter in Q3 decelerated to 4.8% from 6.3% growth in Q2, sparking concern on the Street about just how much longer the younger social network can grow meaningfully.

Engagement, one of the most important metrics Facebook investors should watch, was also up. As measured by the percentage of MAUs that are using Facebook on a daily basis, engagement was 64%, compared with 62% in Q2. This all-time high for Facebook's engagement metric means users on a per-member basis are more active on the social network than ever before.

The bad
Facebook stock's aftermarket performance turned sour when CFO David Wehner turned to the company's outlook.

The company expects costs and expenses to rise 50% to 70% next year as it invests in talent and new areas.

Further, Facebook is estimating year-over-year revenue growth to fall to 40% to 47% in Q4. That's down meaningfully from the 59% revenue growth Facebook reported in Q3, and the guidance midrange is lower than the consensus analyst estimate of 45% growth.

The investor takeaway
Even after a sell-off, Facebook stock is still looking a bit pricey to buy shares -- especially with Facebook confirming that the operating environment going forward looks poised to get rougher as it plans to invest in new growth opportunities. And new growth opportunities, of course, always aren't guaranteed to pan out.

Facebook Video Ads

Facebook's video ads are one of the company's recent initiatives to drive more revenue growth. Image source: Facebook.

But for investors who own shares (congratulations to your sweet 55% gain in the past 12 months), the company's continued excellent execution makes holding the stock worthwhile -- even in the face of rising costs. Facebook's lucrative business model, paired with its fast-growing revenue, should continue to benefit the social network's bottom line for years.

Going forward, investors should expect continued deceleration in Facebook's revenue and earnings growth. But new initiatives to bring ads outside the walls of Facebook, continued efforts to improve ad products, and efforts by Facebook to create new and more personalized ways for members to find value in their network should keep the growth strong -- just not as strong -- for some time.

Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple, Facebook, and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.