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Shares of Facebook surged in after-market trading Wednesday, spiking more than 5% after the social networking giant recorded a major earnings and revenue beat for the first quarter of fiscal 2021, a period marked by strong advertising revenue growth and a 10% rise in monthly active users. On the earnings call that followed, Facebook CEO Mark Zuckerberg leaned into the potential of virtual reality and augmented reality offerings.

Facebook logged diluted per-share earnings of $3.30 on total revenue of $26.17 billion, well ahead of Wall Street’s expected earnings of $2.37 per share on revenue of $23.67 billion for the March-ended quarter.

“We had a strong quarter as we helped people stay connected and businesses grow,” said Zuckerberg. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”

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Facebook’s after-hours spike came after closing up 1.1% on Wednesday, outpacing the broader market’s flattish day. The company’s Q1 figures included 1.88 billion daily active users, up 8% year over year, and 2.85 billion monthly active users, marking a 10% pop from the prior-year quarter.

Facebook CFO David Wehner highlighted ad revenue growth, which was fueled by a 30% rise in average ad prices and 12% growth in the number of ads delivered.

“We expect second quarter 2021 year-over-year total revenue growth to remain stable or modestly accelerate relative to the growth rate in the first quarter of 2021 as we lap slower growth related to the pandemic during the second quarter of 2020,” he said in the company’s earnings statement. He expects Q3 and Q4  revenue growth rates to “significantly decelerate,” however, as Facebook laps the prior-year’s strong quarters.

Facebook expects annual expenses to amount to $70 billion to $73 billion, narrowed from prior guidance for $68 billion to $73 billion. Capital expenditures are projected to be in the range of $19 billion to $21 billion, down from previous targets of $21 billion to $23 billion. For a consecutive quarter, the company chafed at Apple’s platform privacy changes, which will allow iPhone and iPad users to stop companies from tracking certain user data, noting that it expects those headwinds in the current quarter.

Zuckerberg kicked off the call by noting that he is “very worried” about the COVID-19 pandemic outbreaks in India and Brazil, before switching gears to the company’s commitment to augmented reality and virtual reality. He said the wireless aspect of the Oculus Quest 2 was “key,” explored the idea of expanding beyond gaming, and touted the social aspects of AR and VR platforms. In broadening the market for immersive media, Zuckerberg noted that the form factor constraints are lower in virtual reality than in augmented reality, adding that in AR, “you’re going to need a pair of glasses that really look like a normal pair of glasses to reach mainstream acceptance.”

On the commerce front, execs on the call touted the more than 1 billion people who use Facebook’s Marketplace platform every month.

Separately, in response to an analyst question about Facebook’s more controversial content, for which the social media giant receives a great deal of criticism, Zuckerberg attempted to rebut critiques that Facebook optimizes its system to increase user time on its news feed.

“We don’t want extremist content or any of that stuff on our service,” he added. “On the contrary of trying to promote that, we go out of our way to try to reduce that… It is in our business interest to reduce it… Consumers don’t like it, advertisers don’t want to be near it.”