Facebook jumped in after-hours trading as the social media company topped earnings expectations thanks to better-than-expected average user spend in the second quarter.
The company reported earnings per share of $1.99 on revenue of $16.89 billion. Analysts polled by forecast EPS of $1.87 on revenue of $16.5 billion. That compared to EPS of $1.74 on revenue of $13.23 billion in the same period a year earlier. The company had reported EPS of $0.85 on revenue of $15.08 billion in the previous quarter.
The better-than-expected results were bolstered by an increase in average user spend, a key performance metric.
Average revenue per user rose to $7.05, above forecasts of $6.87. Daily and monthly active users, meanwhile, were in-line with forecasts at 1.59 billion and 2.41 billion, respectively, for the quarter.
Facebook also revealed that it was informed by the Federal Trade Commission in June that the agency had opened an antitrust probe into the company. The company reached a settlement with the FTC of $5 billion and agreed to significantly enhance its practices and processes for privacy compliance and oversight.
"In particular, we have agreed to implement a comprehensive expansion of our privacy program, including substantial management and board of directors oversight, stringent operational requirements and reporting obligations, and a process to regularly certify our compliance with 2 the privacy program to the FTC," Facebook said in its earnings report. "In the second quarter of 2019, we recorded an additional $2.0 billion accrual in connection with our settlement with the FTC, which is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet."
Against the backdrop of increased regulatory scrutiny into Facebook's data privacy practices, CEO Mark Zuckerberg said the company would continue to invest to beef up privacy protection on its social media platforms.
"We had a strong quarter and our business and community continue to grow," Zuckerberg said. "We are investing in building stronger privacy protections for everyone and on delivering new experiences for the people who use our services."
Facebook (NASDAQ:FB) shares gained 4.52% to trade at $214.24 in after-hours trade following the report.
