uploads/2018/07/Facebook-DAU-3-1.png

Factors that Dented Facebook’s Q2 Global Users Numbers

By

Updated

Facebook’s slowest-ever user growth in Q2

Facebook (FB) delivered its slowest-ever user growth rate in the second quarter, which pulled down its stock more than 20.0% in after-hours trading on Wednesday. Facebook’s sluggish user growth also adversely impacted its top-line growth in the quarter. Both revenues and global daily users lagged behind analysts’ expectations in the second quarter.

Article continues below advertisement

Facebook’s MAUs

Facebook ended the second quarter with more than 2.2 billion monthly active users (or MAUs), which grew just 1.54% sequentially and increased more than 11.0% on a YoY (year-over-year) basis. Facebook’s photo and video platform Instagram has grown to 1.0 billion monthly users from 600.0 million in late 2016. 

Facebook’s two messaging apps, Messenger and WhatsApp, each reported well over 1.0 billion monthly users. About 2.5 billion people use at least one of the company’s apps each month, Facebook stated on a conference call.

Facebook’s DAUs

Facebook reached 1.47 billion DAUs in the second quarter but missed analysts’ expectations of 1.49 billion daily users. Facebook’s DAUs increased 11.0% YoY. However, on a sequential basis, its daily active users grew at a slower rate of 1.44% in the second quarter, compared to 3.42% sequential growth in the first quarter.

Its daily user growth came from India (INDA), Indonesia, and the Philippines. However, its North American and European DAUs reached 185.0 million and 279.0 million, respectively, missing estimates of 185.4 million and 279.4 million. 

FB’s European DAUs declined from 282.0 million in the first quarter, reflecting the effect of the implementation of the GDPR (General Data Protection Regulation) law in the European Union. The GDPR law was implemented to give users more control over their online data.

The new GDPR law also resulted in a fine of $5.0 billion on Google-parent Alphabet (GOOGL) for alleged competition abuses related to its Android phone software. Like Facebook and Google, the new privacy regulations in Europe (EFA) are expected to hurt Twitter (TWTR) as well, as it also uses a massive amount of personal data to target its users.

Facebook’s North American DAUs remained flat in the second quarter from the first quarter, despite the fake news issues and the Cambridge Analytica data leak scandal. These issues impacted as many as 87.0 million users.

Advertisement

More From Market Realist