Facebook, Inc. Common Stock (NASDAQ: FB) stock fell over 0.7% on 25th July, 2019 (As of 9:42 am GMT-4; Source: Google finance). Facebook Inc will pay a record-breaking US$5 billion fine to resolve a government probe into its privacy practices and the social media giant will restructure its approach to privacy, the U.S. Federal Trade Commission.
The probe uncovered a wide range of privacy issues. It was triggered last year by allegations that Facebook violated a 2012 consent decree by inappropriately sharing information belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. The consultancy’s clients included President Donald Trump’s 2016 election campaign.
But, FB in the second quarter of FY 19 has reported decent earnings with adjusted earnings per share of $1.99, beating the analysts’ estimates for the adjusted earnings per share by 12 cents. The company had reported the adjusted revenue growth of 28 percent to $16.9 billion in the second quarter of FY 19.
Facebook daily active users reached 1.59 billion, that’s up 8% compared to last year led by growth in India, Indonesia and the Philippines. This represents approximately 66% of the 2.41 billion monthly active users in June. MAUs grew $180 million or 8% compared to last year. In terms of regional ad revenue growth, north America and Asia-Pacific were strongest and both grew 30% followed by Europe at 25%. Rest of world grew more slowly at 21% and was impacted by currency headwinds.
Moreover, Ad revenue grew 28% year-over-year and the company saw strong growth across all regions and on both Facebook and Instagram. Mobile ad revenue was $15.6 billion contributing approximately 94% of total ad revenue. At the end of June, the company made the transparency tools available globally for ads about social issues elections or politics. These tools show who paid for an how much they spent and who saw the ad, helping people understand who is trying to influence their vote will help the company better defend against foreign interference and other abuse.
Capital expenditures were $3.8 billion driven by investments in data centers, servers, office facilities and network infrastructure. FB generated $4.8 billion in free cash flow and ended the quarter with approximately $48.6 billion in cash and investments. In Q2, the company bought back approximately $1.1 billion of the Class A common stock.