Facebook’s business is doing better than ever

If you pay even the slightest attention to tech news, you’ve probably recently seen nonstop criticism of Facebook’s handling of COVID-19 misinformation, along with a barrage of negative headlines tied to a new book about the company called An Ugly Truth.

These headlines generally paint the picture of a tech giant that is on the outs with users, advertisers, lawmakers, and its Silicon Valley peers. But as the world’s largest social network showed Wednesday, the reality of how its business is performing couldn’t be more opposite.

Facebook said its revenue grew 56 percent in the second quarter to $29 billion, meaning it grew faster during the period than Apple or Microsoft. More impressively, its profit grew an astounding 101 percent to $10.4 billion. Daily users across Facebook, Instagram, and WhatsApp increased 12 percent from the same time last year to 2.76 billion. Non-advertising revenue — namely sales of the Oculus Quest VR headset — grew at a more modest rate of 36 percent. And Apple’s new ad tracking prompt for iPhone apps didn’t materially hurt ad revenue like some expected, though Facebook indicated that the worst is ahead.

In prepared remarks to investors, Facebook CFO David Wehner said to expect revenue growth to “decelerate significantly” in the second half of this year, mainly due to a momentary boost in usage last year during pandemic lockdowns. He also cited “regulatory and platform changes, notably the recent iOS updates” from Apple.

Facebook’s stock price has ballooned 39 percent since the beginning of this year, but the warning about a coming growth slowdown spooked investors, sending its stock down about 3 percent.

The digital ads industry is booming coming out the pandemic, as earlier earnings reports from Snap and Google have already showed. As the number-two player after Google, Facebook stands to benefit from more ad dollars flowing online, even if its targeting capabilities are hindered by Apple in the near term.

A sign of Facebook’s growing strength is the price it chargers advertisers to show ads to users, since that system is run through an auction that increases pricing alongside rising demand. Facebook’s average price per ad grew 47 percent from the year-ago period in the second quarter, and CFO Wehner said the company expects higher ad rates it be the primary driver of revenue growth for the rest of the year.