• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Technology

Earnings Season Has Brought Good News from Social Media and Online Ad Giants

Facebook, Google and Amazon all reported good numbers for their online ad businesses, as did Twitter and Snap.
By ERIC JHONSA
Jul 29, 2019 | 07:53 PM EDT
Stocks quotes in this article: PINS, TTD, ROKU, CRM, ADBE, AMZN, TWTR, SNAP, GOOGL, FB

Last week saw a slew of leading online advertising and social media players deliver a pretty emphatic response to investor worries about their revenue and user growth.

Facebook (FB) comfortably beat Q2 estimates, with revenue rising 28% annually to $16.9 billion on the back of a 33% increase in ad impressions (driven by Instagram as well as Facebook's core news feed). Mark Zuckerberg's firm also reported that monthly active users (MAUs) and daily active users (DAUs) for its core service and Messenger each rose 8% annually (in line with expectations), and that MAUs for its entire family of services (including Instagram and WhatsApp) are now above 2.7 billion.

Alphabet/Google (GOOGL) , meanwhile, saw its stock rise more than 10% after the company topped Q2 estimates while reporting its ad revenue rose 16% to $32.6 billion, and that its "Google Other" segment, which covers various non-advertising businesses, saw revenue rise 40% to $6.2 billion. As usual, Google, which had fallen sharply in April following a Q1 revenue miss, indicated that mobile search and YouTube were the biggest growth drivers for its ad business.

Twitter  (TWTR) and Snap (SNAP) , two companies that I've admittedly been less positive about, also delivered stronger-than-expected Q2 reports. Twitter beat Q2 estimates while reporting its revenue rose 18% to $841 million, and that its monetizable daily active users (mDAUs) rose 14% to 139 million. Snap beat Q2 estimates while reporting its revenue rose 48% to $388 million, and that its DAUs rose 8% to 203 million (well above consensus) with the help of new augmented reality lenses.

Amazon.com (AMZN) , meanwhile, reported that its "Other" segment, which is now dominated by ad sales, saw revenue grow 37% to $3 billion, slightly beating estimates. Growth accelerated a bit from Q1's 34%.

Not everything that the aforementioned companies disclosed was positive. Facebook reported limited user growth for its core service and Messenger in North America and Europe, easily its two most lucrative regions. And -- though it might be guiding conservatively -- the company forecast its revenue growth will decelerate during the second half of 2019 and into 2020.

Snap, whose bottom line remains pressured by giant cloud hosting expenses, reported free cash flow (FCF) of negative $103 million despite growing its operating expenses a mere 5%. And while its outlook might also be conservative, Twitter's Q3 sales guidance range was mostly below analyst expectations.

But overall, at a time when subjects such as privacy scandals, antitrust probes, new data-sharing regulations and content safety issues have often taken the spotlight in recent media coverage of these companies, their Q2 reports largely featured encouraging numbers. For better or for worse, total social media usage continues trekking higher, particularly in developing markets. And the long-term migration of ad dollars towards online channels -- social media, search, video or otherwise -- continues at a brisk clip.

To an extent, the numbers delivered by Facebook, Google, Twitter, Snap and Amazon are encouraging for other online advertising and social media players -- a list that includes video platforms such as Roku (ROKU) , ad tech firms such as The Trade Desk (TTD)  and social media platforms such as Pinterest (PINS) .

They're also arguably encouraging for the marketing software businesses of companies such as Adobe (ADBE) and Salesforce.com (CRM) , given the extent to which their marketing apps are used by companies to help run online ad campaigns, engage in social media marketing and otherwise connect with consumers via digital channels.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investing | Technology

More from Technology

IBM Knocks on the Door of Its 52-Week High, But Nobody Answers

Bruce Kamich
Sep 22, 2023 10:45 AM EDT

Let's drill down to see the risk/reward conditions of the stock and why it may no longer be a 'Best Idea.'

A Difficult Market Is Complicated by Unusual Strength in Just 7 Stocks

James "Rev Shark" DePorre
Sep 22, 2023 7:26 AM EDT

Will this corrective action continue, or will the indexes be saved once again by the 'Magnificent Seven'?

After Splunk Grab, Cisco's a Slam Dunk

Stephen Guilfoyle
Sep 21, 2023 11:54 AM EDT

I didn't like the idea of a cash deal at the start, but after going through the fundamentals, I think it's a wise move -- and here's why I'm adding the stock.

Take Profits on Splunk: Sell to an Anxious Buyer Called Cisco

Bruce Kamich
Sep 21, 2023 9:15 AM EDT

Take after legendary trader Jesse Livermore on this news.

Broadcom Takes a Hit on Potential Loss of Google as a Key AI Customer

Bruce Kamich
Sep 21, 2023 7:31 AM EDT

Let's take a look at the charts.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:20 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading in Multiple Time Frames
  • 10:24 AM EDT BRUCE KAMICH

    This Could Get Messy

    A number of key stocks are getting close to import...
  • 01:41 PM EDT CHRIS VERSACE

    Latest AAP Podcast With Helene Meisler!

    Listen in as the Action Alerts PLUS podcast talks ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login