Facebook (FB) is scheduled to report 1Q20 results after the close today. For the quarter, analysts are forecasting EPS and revenue of $1.71 and $17.22 bln.

Key operating metrics include daily active users (DAUs), monthly active users (MAUs), and Family daily active people (DAP). Last quarter, DAU's increased 9% yr/yr to 1.66 bln; MAU's were up 8% to 2.5 bln, and DAP increased 11% to 2.26 bln.

TECHS:

RESULTS:

Facebook reports EPS in-line, beats on revs; has seen signs of stability in ad revenue in first three weeks of April  

• Reports Q1 (Mar) earnings of $1.71 per share, in-line with the S&P Capital IQ Consensus of $1.71; revenues rose 17.6% year/year to $17.74 bln vs the $17.25 bln S&P Capital IQ Consensus.

  • DAUs were 1.73 billion on average for March 2020, an increase of 11% year-over-year.

  • MAUs were 2.60 billion as of March 31, 2020, an increase of 10% year-over-year.

  • Operating margin 33% versus 22% in prior-year period.

• We experienced a significant reduction in the demand for advertising, as well as a related decline in the pricing of our ads, over the last three weeks of the first quarter of 2020. Due to the increasing uncertainty in our business outlook, we are not providing specific revenue guidance for the second quarter or full-year 2020, but rather a snapshot on revenue performance in the second quarter thus far. After the initial steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April, where advertising revenue has been approximately flat compared to the same period a year ago, down from the 17% year-over-year growth in the first quarter of 2020. The April trends reflect weakness across all of our user geographies as most of our major countries have had some sort of shelter-in-place guidelines in effect.

• We expect total expenses in 2020 to be between $52-56 billion, down from the prior range of $54-59 billion. While this reflects a moderate reduction in the planned growth rate of total expenses, our overall expense growth in the face of expected revenue weakness will have a negative impact on 2020 operating margins.

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