Social media giant Facebook (NASDAQ: FB) achieved good results for the fourth quarter of 2020 on Wednesday evening. The company exceeded Wall Street expectations overall and increased its $ 25 billion share buyback program.
Facebook’s revenue rose 33% year-on-year to $ 28.1 billion. GAAP earnings increased 52% to $ 3.88 per diluted share. The average analyst forecast revenue of about $ 3.19 per share on sales near $ 26.3 billion.
The company achieved its stated goal of accelerating its growth in advertising revenue, increasing the key measure from 22% in the third quarter to 31% this time. Free cash flow increased by 91% to $ 9.22 billion.
The company’s active number of users continued their steady increase at percentages from low teens to mid teens year before year. Facebook had 1.84 billion active users daily in December.
CFO David Wehner highlighted two macroeconomic trends that helped the company exceed expectations in the quarter. A global shift towards online commerce has been accompanied by greater consumer demand for products and lower interest in services. These two trends together serve as a tailwind for the growth of Facebook.
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Looking ahead, Wehner said he expects easy year-on-year comparisons in the first half of 2021, as the company will measure its progress against the poor advertising environment that prevailed in the early stages of the coronavirus pandemic.
Encouraged by these results and current business trends, Facebook has supplemented its share buyback program with a $ 25 billion injection. The previous $ 34 billion authorization has $ 8.6 billion left, so the move brings Facebook’s ability to buy back its shares back to about $ 34 billion.