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.
