Facebook on Wednesday reported surging profits and revenue driven by soaring ad sales, but cautioned that it might face “headwinds” in the future from regulation and technology changes.
The social network’s revenue in the fourth quarter grew to $28 billion, up 33 percent from a year earlier and beating Wall Street estimates. Profits totaled $11.2 billion, up 53 percent.
Facebook’s business rose even as it dealt with multiple controversies. It has been criticized for the proliferation of misinformation across its platform and the effects of those falsehoods on users, while regulators have grown increasingly concerned about its outsize power.
In December, the Federal Trade Commission and more than 40 states accused Facebook of buying up its rivals to illegally squash competition. This month, Facebook angered conservatives and others for banning the account of former President Donald J. Trump, citing his incitement of violence.
Even so, the company continued to attract new users. Facebook’s apps — which include Instagram, WhatsApp and Messenger — had more than 3.3 billion regular monthly users in the fourth quarter, a new high. About 2.6 billion of them used one of Facebook’s apps every day, the company said.
After an initial drop in advertising in March, Facebook’s business boomed as more people bought products online during the pandemic, executives said. The company said it expected that trend to continue.
“Despite the negative publicity and antitrust cases, it appears there is nothing that can stop what is arguably the world’s most important advertising platform,” said Jesse Cohen, a senior analyst at Investing.com.
Facebook said one area of uncertainty was potential regulation, especially in Europe. The company is closely watching rulings in Ireland that could prohibit it from transferring data on its European Union users to the United States. Executives also said they were concerned about changes that Apple was making to its mobile operating system, iOS, about the tracking of apps, which could hamper some of Facebook’s ad-targeting tools.
In a statement, Mark Zuckerberg, Facebook’s chief executive, was positive.
“We had a strong end to the year as people and businesses continued to use our services during these challenging times,” he said. “I’m excited about our product road map for 2021 as we build new and meaningful ways to create economic opportunity, build community and help people just have fun.”
