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Can Facebook’s revenue growth continue?

Facebook’s revenues have increased by more than a quarter in the last three months, according to its latest report.

The company has solidified its position as the most dominant social media company by revealing remarkable performance over the first quarter of 2019 while also beating analyst expectations in each of the last four quarters.

Facebook’s announcement revealed a strong 26 per cent growth in advertising revenues to an impressive $15bn in the period. The result is the company’s strongest Q1 result in history and its second-highest quarterly revenue since its launch more than 15 years ago.

Two of the company’s other key metrics – daily and monthly active users – increased by 7.8 per cent and 8.2 per cent respectively, indicating that customers are not being put off despite the company landing itself in hot water over its privacy policies.

The company also estimates that over two billion people – more than a quarter of the world’s population – use one of its services every day. Some 35 per cent of the world’s population use Facebook, WhatsApp, Messenger or Instagram at least once a month.

Privacy improvements

Despite this, CEO Mark Zuckerberg reassured markets that the company is committed to its “privacy-focused vision for the future” and is working with other market leaders to “address important issues around the internet”.

The company has put aside $3bn to cover potential fines from the Federal Trade Commission which it seemingly expects to come to a conclusion in the near future.

Investors, as well as users, are unshaken by investigations into the internet giant

After the results were made public, shares in Facebook grew by more than 7 per cent to the highest price since June 2018, when the company was in the midst of the Cambridge Analytica scandal.

Many analysts are predicting continued growth as investors place a high value on the company’s impressive advertising revenue growth and cost containment.

Despite being in the spotlight for much of the last few years, the company has done well to continue growing. However, it must be recognised that Facebook growth is dependent on its consumers, who seem much more occupied with getting their social media fix than with the company’s potential privacy breaches.

This article first featured on Verdict, which is part of the same group as NS Tech and MarketLine.