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Facebook shares shoot up after strong Q4 earnings despite data breach – TechCrunch

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Facebook managed to beat Wall Street’s estimates in its Q4 earnings amidst a constant beat down in the press. Facebook hit 2.32 billion monthly users, up 2.2 perecent from 2.27 billion last quarter, speeding up its growth rate. Facebook climbed to 1.52 billion daily active users from 1.49 billion last quarter for a 2 percent growth rate that dwarfed last quarter’s 1.36 percent.

Facebook earned $16.91 billion off all those users with a $2.38 GAAP earnings per share. Those numbers handily beat Wall Street’s expectations of $16.39 billion in revenue and $2.18 GAAP earnings per share, plus 2.32 billion monthly and 1.51 billion daily active users. Facebook’s daily to monthly user ratio, or stickiness, held firm at 66 percent where it’s stayed for years, showing those still on Facebook aren’t using it much less.

Facebook shares had closed today at $150.42 but shot up over 11 percent following the record revenue and profit announcements to hover around $167. A big 30 percent year-over-year boost in average revenue per user in North America fueled those gains. Yet that’s still down from $186 where it was a year ago and a peak of $217 in July.

CEO Mark Zuckerberg went beyond his usual intro to the earnings report where he assures investors things are going well and highlights new opportunities. This quarter he noted “We’ve fundamentally changed how we run our company to focus on the biggest social issues, and we’re investing more to build new and inspiring ways for people to connect.”

Squeezing Money From The Olds

Facebook managed to grow its DAU in both the critical US & Canada and Europe markets where it earns the most money after stagnation or shrinkage in previous quarters. The fact that Facebook is no longer dwindling it its most lucrative markets is surely contributing to its share price climb. Facebook’s monthly active user plateaued in North America but roared up in Europe. That was shored up by a reversal of last quarter’s decline in Rest Of World average revenue per user, which fell 4.7% in Q3 but bounced back with 16.5 percent growth in Q4.

 

Facebook raked in $6.8 billion in profit this quarter as it slowed down hiring and only grew headcount 5 percent from 33,606 to 35,587. It seems Facebook has gotten to a comfortable place with its security staff-up in the wake of election interference, fake news, and content moderation troubles. Its revenue is up 30 percent year-over-year while profits grew 61 percent, which is pretty remarkable for a 15-year old technology company.

Earnings Call

Facebook’s plan to concentrate on product innovation in 2019 after focusing on security in 2018 was the core of today’s earnings call. Zuckerberg laid out a product roadmap for more ephemerality and encryption, how unifying the infrastructure of Facebook’s messaging apps will better connect Marketplace to WhatsApp, Groups will become an organizing function for more of the Facebook experience, and shopping features will crop up across the family of apps. You can read Zuckerberg’s full opening statement here.

New stats included 500 million daily Instagram Stories users and 2 million advertisers on Stories. Zuckerberg said he was pleasantly surprised by Facebook Portal sales but didn’t give specifics. He revealed 2.7 billion people now use Facebook’s family of apps each month. However, CFO David Wehner warned the company would eventually stop sharing Facebook-only stats, presumably to mask the shift of younger users to its other apps. He also cautioned that due to the shift of users from feeds to Stories that Facebook has less experience monetizing, and targeting headwinds due to increased privacy scrutiny, Facebook predicts mid-single digit revenue growth rate reductions each quarter this year.

While the quarter went well, morale isn’t quite as rosy. It’s been a brutal quarter for Facebook At least its swifter user growth rates show Facebook survived its biggest ever data breach without scaring off too many people. Meanwhile it’s continuously struggled with scandals like hiring opposition research firm Definers, and it saw its new teen app Lasso largely flop. Facebook will have to convince investors it knows how to win back the next generation, or at least keep squeezong a lot more money out of the last one like it did in Q4.

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We just released our community update and quarterly results.We’ve fundamentally changed how we run our company to…

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Posted by Mark Zuckerberg on Wednesday, January 30, 2019

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While the quarter went well, morale isn’t quite as rosy. It’s been a brutal quarter for Facebook At least its swifter user growth rates show Facebook survived its biggest ever data breach without scaring off too many people. Meanwhile it’s continuously struggled with scandals like hiring opposition research firm Definers, and it saw its new teen app Lasso largely flop. Facebook will have to convince investors it knows how to win back the next generation, or at least keep squeezong a lot more money out of the last one like it did in Q4.

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Facebook managed to beat Wall Street’s estimates in its Q4 earnings amidst a constant beat down in the press. Facebook hit 2.32 billion monthly users, up 2.2 perecent from 2.27 billion last quarter, speeding up its growth rate. Facebook climbed to 1.52 billion daily active users from 1.49 billion last quarter for a 2 percent […]

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Josh Constine is a technology journalist who specializes in deep analysis of social products. He is currently an Editor-At-Large for TechCrunch and is available for speaking engagements.

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Previously, Constine was the Lead Writer of Inside Facebook through its acquisition by WebMediaBrands, covering everything about the social network.

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Constine graduated from Stanford University in 2009 with a Master’s degree in Cybersociology, examining the influence of technology on social interaction. He researched the impact of privacy controls on the socialization of children, meme popularity cycles, and what influences the click through rate of links posted to Twitter.

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Constine also received a Bachelor of Arts degree with honors from Stanford University in 2007, with a concentration in Social Psychology & Interpersonal Processes.

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Josh Constine is an experienced public speaker, and has moderated over 120 on-stage interviews in 15 countries with leaders including Facebook CEO Mark Zuckerberg, whistleblower Edward Snowden (via on-stage video conference), and U.S. Senator Cory Booker. He is available to moderate panels and fireside chats, deliver keynotes, and judge hackathon and pitch competitions.

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Constine has been quoted by The Wall Street Journal, CNN Money, The Atlantic, BBC World Magazine, Slate, and more, plus has been featured on television on Good Morning, America, The Today Show, China Central Television, and Fox News. Constine is ranked as the #1 most cited tech journalist on prestigious news aggregator Techmeme.

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[Disclosures: Josh Constine temporarily advised a college friend’s social location-sharing startup codenamed ‘Signal’ that was based in San Francisco before dissolving in 2015. This advising role was cleared with AOL and TechCrunch’s editors and has concluded. Constine’s fiancu00e9e Andee Gardiner co-founded startup accelerator Founders Embassy. Constine’s cousin Darren Lachtman is the founder of influencer advertising startup Niche that was acquired by Twitter, and he’s since left and founded teen content studio Brat. Constine does not write about Founders Embassy or Brat. Constine has personal acquaintances stemming from college housing circa 2007 with founders at Skybox Imaging (now Terra Bella), Hustle, Snapchat, and Robinhood, but does not maintain close social ties with them nor does that influence his writing. Constine occasionally does paid speaking engagements at conferences, but only those funded by companies he does not cover. Constine owns a small position in Ethereum and Bitcoin cryptocurrencies, does not day-trade, and discloses his positions directly in articles where appropriate. Constine does not do consulting, angel investing, or public stock trading beyond public stock invesments by his parents’ estate that he has no role in managing or advising.]

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Josh Constine is a technology journalist who specializes in deep analysis of social products. He is currently an Editor-At-Large for TechCrunch and is available for speaking engagements.

nn

Previously, Constine was the Lead Writer of Inside Facebook through its acquisition by WebMediaBrands, covering everything about the social network.

nn

Constine graduated from Stanford University in 2009 with a Master’s degree in Cybersociology, examining the influence of technology on social interaction. He researched the impact of privacy controls on the socialization of children, meme popularity cycles, and what influences the click through rate of links posted to Twitter.

nn

Constine also received a Bachelor of Arts degree with honors from Stanford University in 2007, with a concentration in Social Psychology & Interpersonal Processes.

nn

Josh Constine is an experienced public speaker, and has moderated over 120 on-stage interviews in 15 countries with leaders including Facebook CEO Mark Zuckerberg, whistleblower Edward Snowden (via on-stage video conference), and U.S. Senator Cory Booker. He is available to moderate panels and fireside chats, deliver keynotes, and judge hackathon and pitch competitions.

nn

Constine has been quoted by The Wall Street Journal, CNN Money, The Atlantic, BBC World Magazine, Slate, and more, plus has been featured on television on Good Morning, America, The Today Show, China Central Television, and Fox News. Constine is ranked as the #1 most cited tech journalist on prestigious news aggregator Techmeme.

nn

[Disclosures: Josh Constine temporarily advised a college friend’s social location-sharing startup codenamed ‘Signal’ that was based in San Francisco before dissolving in 2015. This advising role was cleared with AOL and TechCrunch’s editors and has concluded. Constine’s fiancu00e9e Andee Gardiner co-founded startup accelerator Founders Embassy. Constine’s cousin Darren Lachtman is the founder of influencer advertising startup Niche that was acquired by Twitter, and he’s since left and founded teen content studio Brat. Constine does not write about Founders Embassy or Brat. Constine has personal acquaintances stemming from college housing circa 2007 with founders at Skybox Imaging (now Terra Bella), Hustle, Snapchat, and Robinhood, but does not maintain close social ties with them nor does that influence his writing. Constine occasionally does paid speaking engagements at conferences, but only those funded by companies he does not cover. Constine owns a small position in Ethereum and Bitcoin cryptocurrencies, does not day-trade, and discloses his positions directly in articles where appropriate. Constine does not do consulting, angel investing, or public stock trading beyond public stock invesments by his parents’ estate that he has no role in managing or advising.]

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Bumble files to go public – TechCrunch

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The dating and networking service Bumble has filed to go public.

The company, launched by a former co-founder of the IAC-owned Tinder, plans to list its share on the Nasdaq stock exchange, using the ticker symbol “BMBL.” Bumble’s planned IPO was first reported in December.

Bumble CEO Whitney Wolfe Herd was on the founding team at Tinder before starting Bumble. She filed suit against Tinder for sexual harassment and discrimination, which was at least somewhat inspirational in her quest to build a dating app that put women in the driver’s seat.

In 2019, Wolfe Herd took the helm of MagicLab, renamed to Bumble Group, in a $3 billion deal with Blackstone, replacing Badoo founder and CEO Andrey Andreev following a harassment scandal at the firm.

The company is targeting the public markets at a particularly heady time for new offerings, with investors embracing venture-backed IPOs throughout late 2020 and the start of 2021. Previously privately held companies like Airbnb, Affirm, and others have seen their fortunes soar on the back of prices that public investors are willing to pay, perhaps inducing more IPO filings than the market might have otherwise seen.

You can read its IPO filing here. TechCrunch will have its usual tear-down of the document later today, but we have pulled some top-line numbers for you to kick off your own research.

But before we do, the company’s board makeup, namely that it is over 70% women is already drawing plaudits. Now, into its numbers.

Inside Bumble’s IPO filing

Let’s consider Bumble from three perspectives: Usage, financial results, and ownership.

On the usage front, Bumble is popular, as you would imagine a dating would have to be to reach the scale required to go public. The company claims 42 million monthly active users (MAUs) as of Q3 2020 — many companies will try to get public on the strength of their third-quarter results from 2020, as it takes time to close Q4 and the full calendar year.

Those 42 million MAUs translated into 2.4 million total paying users through the first nine months of 2020; the percent, then, of paying users to MAUs is not 2.4 million divided by 42, but a smaller fraction.

Turning to the numbers, recall that Bumble sold a majority of itself a few years back. We bring that up as Bumble’s financial results are complicated thanks to its ownership structure.

After the IPO, Bumble Inc. will “be a holding company, and its sole material asset will be a controlling equity interest in Bumble Holdings,” per the S-1 filing. So, how is Bumble Holdings doing?

Medium? Doing the sums ourselves as the company’s S- 1 is fraught with accounting nuances, in the first nine months of 2019, Bumble managed the following:

  • Revenues of $362.6 million
  • Net income of $68.6 million

And then, combining two columns to provide a similar set of results for the same period of 2020, Bumble recorded:

  • Revenues of $416.6 million
  • Net income of -$116.7 million

For those following along, we’re using the “Net (loss) earnings” line, for profitability, and not the “Net (loss) earnings attributable to owners / shareholders” as that would require even more explanation and we’re keeping it simple in this first look.

While Bumble saw modest growth in 2020 through Q3 and a sharp swing to losses on a GAAP basis, the company’s adjusted profitability grew over the same time period. The company’s adjusted EBITDA, a very non-GAAP metric, expanded from $80.0 million in the first three quarters of 2019 to $108.3 million in the same period of 2020.

While we are generally willing to allow quickly-growing companies some leniency when it comes to adjusted metrics, the gap between Bumble’s GAAP losses and its EBITDA results is a stress-test of our compassion. Bumble also swung from free cash flow positivity during the first nine months of 2019 to the first quarters of 2020.

If you extrapolate Bumble’s Q1, Q2, and Q3 revenue to a full-year number, the company could manage $555.5 million in 2020 revenues. Even at a modest software-ish multiple, the company would be worth more than the $3 billion figure that we discussed before.

However, its sharp unprofitability in 2020 could damper its eventual valuation. More as we dig more deeply into the filing.

Finally, on the ownership question the company’s filing is surprisingly denuded of data. Its principal shareholder section looks like this:

When we know more, we’ll share more. Until then, happy S-1 reading.

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Samsung unveils Galaxy S21 line – TechCrunch

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Samsung lowers prices with its latest Galaxy S phones, Google completes its Fitbit acquisition and Beyond Meat is coming to Taco Bell. This is your Daily Crunch for January 14, 2021.

The big story: Samsung unveils Galaxy S21 line

Samsung’s new line of phones includes the S21, S21+ and S21 Ultra, priced at $799, $999 and $1,119 respectively, an across-the-board price cut of $200. Brian Heater writes that the Ultra, in particular, “has one very important trick up its sleeve” — namely compatibility with the S Pen.

All three phones are available for pre-order now and start shipping on January 29.

In addition, Samsung announced the Galaxy Buds Pro, which cost $199 and come with a stated five hours of battery life. And it’s launching a Bluetooth locator, dubbed the Galaxy SmartTag.

The tech giants

Google’s Fitbit acquisition is official — This follows regulatory scrutiny on both sides of the pond.

Amazon’s Ring Neighbors app exposed users’ precise locations and home addresses — The bug made it possible to retrieve the location data on users who posted to the app.

Beyond Meat shares soar after inking deal with Taco Bell on new menu items — Taco Bell announced that it would work with Beyond Meat to come up with new menu items due to be tested in the next year.

Startups, funding and venture capital

Medium acquires social book reading app Glose — Glose has been building iOS, Android and web apps that let you buy, download and read books on your devices.

Tiger Global is raising a new $3.75B venture fund, one year after closing its last — Despite being named Tiger Private Investment Partners XIV, this is actually the firm’s thirteenth fund.

Carbyne raises $25M for a next-generation platform to improve emergency 911 responses — The Israeli startup aims to help emergency services get more complete information about callers, and to provide additional telemedicine services.

Advice and analysis from Extra Crunch

Five consumer hardware VCs share their 2021 investment strategies — Investors are generally bullish on at-home fitness startups.

Poshmark prices IPO above range as public markets continue to YOLO startups — This is the late-2020, early-2021 IPO market in action.

Twelve ‘flexible VCs’ who operate where equity meets revenue share — Founders seeking non-dilutive funding: start here.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Tech and health companies including Microsoft and Salesforce team up on digital COVID-19 vaccination records — The so-called “Vaccination Credential Initiative” includes a range of big-name companies from both the healthcare and tech industries.

2020 was one of the warmest years in history and indicates mounting risks of climate change — 2020 either edged out or came in just behind 2016 as the warmest year in recorded history, according to data from U.S. government agencies.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Medium acquires social book reading app Glose – TechCrunch

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Medium is acquiring Paris-based startup Glose for an undisclosed amount. Glose has been building iOS, Android and web apps that let you buy, download and read books on your devices.

The company has turned reading into a multiplayer experience as you can build a bookshelf, share notes with your followers and start conversations in the margins. Sure, there are social platforms that let you talk about books, such as Goodreads. But Glose’s differentiating point is that the social features are intrinsically linked with the reading features — those aren’t two separate platforms. There are also some gamification features that help you stay motivated as you read difficult books — you get streak rewards for instance.

In many ways, Glose’s one-tap highlighting and commenting features are reminiscent of Medium’s features on this front. You can highlight text in any reading app on your phone or tablet but you can’t do much with it.

More recently, Glose has launched a separate service called Glose Education. As the name suggests, that version is tailored for universities and high schools. Teachers can hand out assignments and you can read a book as a group.

Over 1 million people have used Glose and 25 universities have signed up to Glose Education, including Stanford and Columbia University.

But Glose isn’t just a software play. The company has also put together a comprehensive book store. The company has partnered with 20,000 publishers so that you can buy ebooks directly from the app.

And if you are studying Virginia Wolf this semester, Glose also provides hundreds of thousands of public domain books for free. Glose also supports audio books.

This is by far the most interesting part as Medium now plans to expand beyond articles and blogs. While Glose is sticking around for now, Medium also plans to integrate ebooks and audio books to its service.

It’s a smart move as many prolific bloggers are also book writers. Right now, they write a blog post on Medium and link to a third-party site if you want to buy their books. Having the ability to host everything written by an author is a better experience for both content creators and readers.

“We’re impressed not only by Glose’s reading products and technology, but also by their experience in partnering with book authors and publishers,” Medium CEO Ev Williams said in a statement. “Books are a means of exploring an idea, a way to go deeper. The vast majority of the world’s ideas are stored in books and journals, yet are hardly searchable nor shareable. With Glose, we want to improve that experience within Medium’s large network of engaged readers and writers. We look forward to working with the Glose team on partnering with publishers to help authors reach more readers.”

The Glose team will remain in Paris, which means that Medium is opening its first office outside of the U.S. Glose will continue to honor its partnerships with authors, publishers, schools and institutions.

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