Facebook stock spikes despite ‘significant reduction’ in demand for ads

The coronavirus pandemic is significantly slowing the growth of Facebook’s ads business, but investors seems pleased with the company’s performance in Q1 after Facebook released its earnings report Wednesday.

The company beat Wall Street expectations on revenue, sharing that they had made $17.74 billion on while follow short on earnings per share at $1.71. The company also shared that monthly active users had swollen to 2.6 billion users, beating expectations of 2.55 billion.

The company’s shares rose upwards of 9% after-hours following the release.

While Facebook’s ad revenues in Q1 showcased 17% year-over-year growth, Facebook used its earnings announcements to hedge expectations for Q2. The company said they would not be providing guidance for Q2 of fill-year 2020, instead indicating that the first three weeks of April indicated flat year-over-year growth in the the company’s outsized ads business.

The digital ads market has taken a major hit in the past several weeks in light of the pandemic crisis, in its release, Facebook said they had seen a “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.”

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