Even as Facebook has grappled with one corporate embarrassment after another, it has remained a business powerhouse.
But on Wednesday, the social network encountered the perils of being an aging corporation: It reported its slowest growth ever.
Facebook’s revenue in the last three months of 2019 rose 25% from a year earlier to $21 billion, while profits jumped 7% to $7.3 billion, the Silicon Valley giant said. While the performance was robust, the revenue growth was down from 28% in the previous quarter, turning 2019 into a year when the company did not report sales growth above 30% in any quarter.
At almost 16 years old, Facebook has matured into a large organization that is increasingly grappling with the law of large numbers and decelerating growth rates. Wall Street investors, who are accustomed to Facebook’s being a rapid-growth company, sent its stock down more than 6% in after-hours trading.
It was “the fourth straight quarter that the social media giant has delivered sub-30% growth,” said Jesse Cohen, an analyst at Investing.com, a financial markets platform, though he added that the business was doing well.
Even as growth slowed, Facebook managed to wring more marketing dollars from the millions of advertisers who rely on its service, indicating that it has shrugged off some of the regulatory concerns and competitive pressure that have plagued it in recent years.
“We had a good quarter and a strong end to the year as our community and business continue to grow,” said Mark Zuckerberg, Facebook’s founder and chief executive. “We remain focused on building services that help people stay connected to those they care about.”
Profits surged even as Facebook increased its spending on security, research and development, and other areas of the business. Its expenses rose to more than $12 billion in the fourth quarter, up 34% from a year earlier.
Zuckerberg is set to focus this year on securing the platform in the runup to the November election, aiming to avoid being caught off guard with disinformation and foreign interference as the company was in 2016. Election-security teams have ballooned at Facebook, which is spending billions of dollars on the effort.
The company also reported 2.89 billion regular users across its family of apps — including Instagram, WhatsApp, Messenger and Facebook’s core social network — up 9% from a year earlier.