Money comin’ in, money goin’ out.
Facebook’s revenues exceeded analysts’ forecasts and expectations, according to a Wednesday report from Reuters. But the social media company says that it has already set aside $3 billion, around 6% of Facebook’s total on-hand cash and securities, in response to a possible penalty from the Federal Trade Commission later this year due to multiple violations.
Most of the violations can be attributed to the Cambridge Analytica scandal that happened in 2018, while some are related to all the breaches and data leaks that Facebook was involved in for the past year.
“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet,” says Facebook in a statement posted online. “We estimate that the range of loss in this matter is $3 billion to $5 billion.”
Facebook also says that they have no idea when the penalties will hit. “The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”
Although the $3 billion fine is a huge loss for Facebook, enough to decrease its recorded profit far below the first quarter earnings of 2018, the company still continues to grow, both in terms of revenue and user base. This is partly due to all the smaller social media platforms that Facebook has acquired.
According to Facebook, the company’s daily and monthly active user base has grown by over 26%, earning them a revenue of more than $15 billion. Individually, Facebook’s user base is now sitting at 2.38 billion total users, having grown by 8%. All in all, the total number of unique users who log into Facebook, WhatsApp, Instagram, and Messenger each month is 2.7 billion. With the current world population at 7.53 billion, this means that at almost 36% or at least one out of every three people on Earth is using Facebook’s family of services.
