Facebook beats the streets thanks to stellar ad sales

Social media giant Facebook (NASDAQ: FB) released strong fourth quarter 2020 results on Wednesday evening. The company exceeded Wall Street expectations in all areas and increased its share buyback program by $ 25 billion.

Facebook’s revenue grew 33% year-over-year, reaching $ 28.1 billion. GAAP earnings jumped 52% to $ 3.88 per diluted share. The average analyst was forecasting earnings of about $ 3.19 per share on sales of nearly $ 26.3 billion.

The company met its stated goal of accelerating ad revenue growth, increasing that key metric from 22% in the third quarter to 31% this time around. Free cash flow increased 91% to $ 9.22 billion.

The number of active users of the company continued to climb steadily at low teenage to teenage percentage rates year over year. Facebook had 1.84 billion daily active users in December.

CFO David Wehner highlighted two macroeconomic trends that helped the company beat expectations during the quarter. A global shift to e-commerce has been accompanied by increased consumer demand for products and decreased interest in services. These two trends have combined to serve as a tailwind for Facebook’s advertising growth.

Looking ahead, Wehner said he expected easy year-to-year comparisons in the first half of 2021, as the company would measure its progress against the weak advertising environment that prevailed. during the early stages of the coronavirus pandemic.

Encouraged by these results and current business trends, Facebook fueled its share buyback program with an injection of $ 25 billion. The previous $ 34 billion authorization remained $ 8.6 billion, so the move again brings Facebook’s ability to repurchase its shares to around $ 34 billion.