Facebook’s Sales Growth Hits a Speed Bump.

The internet giant Wednesday reported a slowdown in revenue growth, something it had warned would happen. It’s coming at a time when Facebook faces plenty of tough challenges.

Last week we cautioned of troubles ahead for the social media giant – read here. This is only the beginning.

The main points of Facebook’s latest earnings:

  • Fourth-quarter revenue grew 25 percent, to $21.1 billion. That’s the slowest pace in Facebook’s history as a publicly traded company, according to the WSJ.
  • Daily users of the core Facebook platform grew to 1.66 billion, beating analyst expectations of 1.65 billion.
  • Expenses also rose, reducing Facebook’s operating margin to 42 percent from 46 percent. This seemed to be the decisive factor, causing the selloff.

The company also said it would pay $550 million to settle a class-action lawsuit over its use of facial-recognition technology.

It’s the latest cue of the legal headaches that continue to bedevil Facebook, which also include a slew of new regulations around the world governing security and data.

Shares in Facebook fell 7 percent in after-hours trading Wednesday, with investors worrying that the company has peaked and faces serious downside risk.

Read our full article on Facebook here.

Luka Marjanovic

Chief Analyst

Luka holds a Bachelor’s in International Business from Denmark and a Master’s in International Management from ESADE. During his undergraduate studies he founded his own consulting firm, providing services to local businesses in various sectors; as well as working as a research assistant in the field of Big Data. Prior to his education he served in the Danish Royal Army as Second Sergeant, leading and managing a group of men, under extreme pressures and conditions. Luka has spent significant time abroad, living and working in six different countries.

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