Big tech companies continue to prosper in the time of COVID. Facebook, Alphabet (Google’s parent) and Amazon each reported solid growth for the third quarter of 2020 — results that reflect how people worldwide have upped their usage of internet giants’ services during the pandemic.
The trio each posted revenue and earnings that topped Wall Street expectations. Here are the key takeaways from the companies’ Q3 earnings reports:
- Facebook: Revenue of $21.47 billion (up 22% year over year) and net income climbed 29%, to $7.85 billion. Facebook’s monthly active users were 2.74 billion as of the end of September (up 12% annually) and monthly active users across its family of apps was 3.21 billion (up 14% year-over-year).
- Alphabet: Revenue of $46.17 billion was up 14% year over year, and net income jumped 59%, to $11.25 billion. YouTube ad revenue hit $5.04 billion, up 32%.
- Amazon: Net sales increased 37% to $96.1 billion, and net income tripled to $6.3 billion.
Also reporting quarterly earnings Thursday were Apple, which posted a 1% increase in revenue amid a steep drop in iPhone sales, and Twitter, which increased revenue 14% and topped earnings estimates but reported lighter-than-expected user growth of just 1 million daily users.
Facebook chief Mark Zuckerberg, in announcing the company’s Q3 results, said, “We had a strong quarter as people and businesses continue to rely on our services to stay connected and create economic opportunity during these tough times. We continue to make significant investments in our products and hiring in order to deliver new and meaningful experiences for our community around the world.”
Still, amid the ongoing pandemic, Facebook said monthly and daily active users in the U.S. and Canada slipped slightly from the previous quarter. The company expects Q4 figures to dip sequentially as well, in line with that trend. Facebook expects Q4 ad revenue, which will include the holiday season, to be higher than Q3.
“We believe the pandemic has contributed to an acceleration in the shift of commerce from offline to online, and we experienced increasing demand for advertising as a result of this acceleration,” Facebook CFO Dave Wehner said ahead of the earnings call. “Considering that online commerce is our largest ad vertical, a change in this trend could serve as a headwind to our 2021 ad revenue growth.”
Amazon CEO Jeff Bezos said the company is “proud to have created over 400,000 jobs this year alone,” with the company’s hiring driven by a surge in online buying amid the global COVID pandemic. In addition, Bezos said Amazon is seeing more customers than ever shopping early for their holiday gifts, “which is just one of the signs that this is going to be an unprecedented holiday season.”
For Alphabet, the Q3 growth reflected an increase in advertiser spending in Google Search and YouTube as well as “continued strength in Google Cloud and Play,” CFO Ruth Porat said in prepared remarks.
Elaine Low contributed to this report.