(Reuters) -Facebook Inc said on Wednesday it expects revenue growth in the third and fourth quarters to “decelerate significantly,” sending the social media giant’s shares down about 5% in extended trading.
The company beat Wall Street estimates for quarterly revenue, bolstered by increased advertising spending as businesses build their digital presence to cater to consumers spending more time and money online.
The company’s total revenue, which primarily consists of ad sales, rose to $29.08 billion in the second quarter from $18.69 billion a year earlier, beating analysts’ estimates of $27.89 billion, according to IBES data from Refinitiv.
Facebook, like its peers, has seen increased demand for digital ads as the pandemic drove consumers to shop largely online, forcing several businesses to create online stores and markets using social media platforms.
The world’s largest social network’s revenue from advertising rose 56% to $28.58 billion in the second quarter ended June 30, Facebook said.
The company said it expects Apple’s recent privacy change, requiring iPhone app developers to begin asking users’ permission to collect certain data for ads, to impact in the third quarter. Facebook has argued Apple’s recent requirement that iPhone app developers begin asking users’ permission to collect certain data for ads would harm its business and hurt small companies that rely on personalized advertising.
Monthly active users came in at 2.90 billion, up 7% from the same period last year but missing analyst expectations of 2.92 billion and marking the slowest growth rate in at least three years, according to IBES data from Refinitiv.
Net income rose to $10.4 billion, or $3.61 per share, from $5.18 billion, or $1.80 per share, a year earlier. Analysts had expected a profit of $3.03 per share.
(Reporting by Elizabeth Culliford and Nivedita Balu in Bengaluru; Editing by Maju Samuel and Lisa Shumaker)