Facebook user growth slows but earnings beat forecast

Facebook exceeded Wall Street's earnings targets but user growth continues to slow amid challenging times for the world's leading social network.

UNITED STATES (REUTERS) - Facebook is still struggling to emerge from the intense scrutiny brought on by the data and privacy scandals uncovered earlier this year.

"We don't sell any data to anyone. We don't sell it to advertisers and we don't sell it to developers," said Facebook CEO Mark Zuckerberg.

Quarterly results released on Tuesday (Oct 30) show the social network's closely-watched user growth rate continues to slow. Average monthly users, a key metric of eyeballs on the main Facebook app, coming in at 2.27 billion - that's up only 10 per cent from last quarter, a slowdown from Facebook's go-go days and weaker than analysts had expected. 

Facebook CEO Mark Zuckerberg: "Our next focus is building community." 

But Zuckerberg highlighted a different data point: that 2.6 billion people a month interact with at least one of Facebook's apps when you include Instagram and WhatsApp.

Sales during the third-quarter also fell shy of expectations with the slowest growth rate in six years.

Zuckerberg blaming a less-than-smooth shift to the network's Stories display versus the News Feed customers were used to. But Facebook still managed to easily top profit forecasts.

 

The earnings beat coming despite a surge in expenses compared to last year.

Shares, however, were volatile in after-hours trade after Zuckerberg warned investors revenue and cost growth will be out of sync for "some time".