Ali Mogharabi: Facebook's third-quarter results came in mixed as they missed slightly on the top line but beat our expectations and consensus on the bottom line. The narrow miss on revenue was mainly due to the user count decline in Europe, which was a result of GDPR.
We note that the firm's total daily and monthly user counts still beat our expectations. In our view, no decline in Facebook's U.S. users was reassuring as it displayed that this wide-moat name's network effect moat source is intact. More importantly, albeit data and content issues that have surrounded the firm this year, advertisers continue to spend on Facebook as ad loads and ad prices both increased and further drove impressive double-digit growth in revenue generated per user.
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Ali Mogharabi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.