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Participants
Deborah Crawford Vice President-Investor Relations
Mark Zuckerberg Chief Executive Officer
Sheryl Sandberg Chief Operating Officer
Dave Wehner Chief Financial Officer
Brian Nowak Morgan Stanley
Eric Sheridan UBS
Justin Post Bank of America
Brent Thill Jefferies
Heather Bellini Goldman Sachs
Doug Anmuth JPMorgan
Michael Nathanson MoffettNathanson
Mark Mahaney RBC
Youssef Squali Truist Securities
Call transcript
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Operator

Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Facebook Third Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. will call This Instructions] be recorded. [Operator very you much. Thank Ms. Investor Deborah begin. may Vice of Crawford, President Relations, you Facebook’s

Deborah Crawford

Thank afternoon earnings conference you. quarter call. third Good and welcome Facebook’s to XXXX

Sheryl results Joining Mark discuss today and our me Zuckerberg, Wehner, to CEO; Sandberg, CFO. COO; Dave are

started, update may get XX‐Q to like in to with that those forward‐looking today’s of result press quarterly by call as no differ release, you materially would and or these to include forward‐looking statements. our take today these information could results on our new from differ to and remarks make SEC. I report set will are events. statements statements opportunity cause on Factors forward‐looking as today Form statements. on remind forth we assumptions Before this undertake of that filed a Any are Actual these that results materially based contemplated future this the we we in obligation

GAAP measures. to press on release we at accompanying is earnings now, website The may release. During to to And of presentation the like are press turn investor included I’d in non‐GAAP investor.fb.com. measures A and present and over this non‐GAAP GAAP our reconciliation today’s call both call available financial an Mark.

Mark Zuckerberg

everyone and stay safe tough these and thanks businesses to to opportunity, joining and right, continue another services for hope quarter economic staying I connected people as All on especially doing us times. had you’re all today. strong well. We create rely during our

and much online are most have free that’s million And more something XXX million which our proud advertisers use tools, time or our of really – during of and moving than services. each around harder apps businesses, of. this day, would world the X.X use are small pandemic active more than and there customers people our I’m one billion Now across these otherwise XX businesses reaching more a

for know our it shows ads gain mind calls, traditional block in our who’s on wants the built China, few reiterate seeing up between the has years these rejected threats ad U.S. for to XXXX. campaigns, nearly numbers. so accounts, systems authorization. accounts election times, September, including every start ago, something the to from that to top of Russia, discussed times a and without potentially we ads is since, using want want how they advanced everyone ended I industry-leading also to before hacking, I’ve looking run has what advanced. we and We’ve for world cover of coordinated but to and process of there. steps new were we’ve more as their previous we’ve security other now, taken go remove I authorization like most was Since tried but discord. course and down networks, run, Anyone so XXX misinformation to March years target issue make to millions find far spread support. Four many interference we’ve then, other systems come teams we since million – Before first. abusive topics, trying minutes And Iran or I in the political fake through and In day. X.X transparent, threats, take No to trying could social who to right efforts to our the a taken company than and people the

see that where you Library, not Ads to is targeted Facebook the it’s running can built also any even Instagram, on or We ad if you.

what ad than more and advertising other paid the on any ads, ad issue reached, transparent social making can For Facebook who you for political medium. see political audience the and

suppression. voter on focused very are We

leaders. rights closely for I’m working are grateful civil And space, including their in We with here. experts guidance the

Our polling to to example, these ICE meant like showing in we intimidate policies like people up will removed into claiming get of person. how the misrepresentations not content expanded when we and misrepresentations, COVID recently that implicit policies places, and through vote claims content be XXX,XXX to prohibit mid-October, voting U.S. there. breaking March by these for From you’ll more of pieces for rules. include to in than And

about new am risk raises I divided by worried world, so week’s safely, higher unrest we’ve country. also of And of years. COVID results potentially last Now days vote nation our that taking protect more levels for to a these elections integrity than important the around made four the election are But all is to lead India XXX U.S. will the brought they’ve been and EU, and which in voting weeks the stopping helped be has XXXX ahead of Indonesia. us the changes questions next mail. with the or civil And including they’ve vote in different challenges. finalized, And how will people in there across of abuse

Given this, clear people steps to beyond this will and are in detail, help things. few like take cover I’d to taken everything register comfortable, confusion long would about of up need how well uncertainty a to too election companies go unrest. for to work, and chance but we’ve we’ve why the reduce vote, It before. to done mention ours we’ve me additional to That’s like they what however, done

information ourselves in that million we’ve First, exceeding X.X we goal register, American We the that summer. helped for campaign ran set people the estimate we this history. largest voting

We we weekend drive. single of Carolina that September, a sign-ups ran total to estimate in XXX,XXX over to-date we and that South XX% recruitment that people helped workers, sign their up also be saw poll

a precautionary taking number additional of also steps. We’re

running after new the we’ve and social issue of Day of week from blocked ads As political Tuesday, election. this and ahead Election the

notification best days any not campaign doing candidate speech, more final there an to while antidote We’re the tries time generally contest people’s same. informational to Facebook of candidates’ new If we’ll claims. saying top the declare victory to be election feeds speech at posts because and may put or before letting the bad and called, believe on this in Instagram I of is final aren’t results simply know enough the the label the we’ll final results them put a are yet, an

We’re content to people information voting or any delegitimize we’ve And been of there top letting label them our outcome election that and apps. notifications winner, at attaching show the particular Information to is seeks methods. an displaying send Voting when the the of we’ll the also projected we’ll Center know them in a

a risk should and to physical strong Finally, don’t is not of discourage that as balance decisions able people strongest clear, important in misinformation try as expression should Even in moderation policies or in banning denial here rejecting speech as our that’s To vaccine. And advocates associated in or be well, we’re expression. imminent Instead, yell increased a not approved it weeks, of vaccine underlying think we this support the of actions you content, able unrest, ads of philosophy including harm harm. risk content because well doing. of we’ve recent of be be what and the free free a your a near and expression fire Holocaust crowded safety QAnon put is risk and with made number an vaccines. to theater our to violence and an reflection COVID shift they as recognize free increased

doesn’t have last work will next I be elections Facebook, our a proud be the know many years. that we’ve stop will in over November X. been and challenge, Election also systems here. test for our few the work integrity an and tested certainly that week ongoing I’m While is of done after

to the So their voices anticipating right democratic new we our process integrity to of protect approach, world. of heard the people the fighting will keep threats and and around the evolving make

of time to talking about said, with the spend I Now our work. our that rest all want product

investments to efforts, across spectrum share to of investments in that for and develop a scope significant of our intense just to making Labs. every Facebook AR will delivering term new few commerce we range the VR Reality while Reels, community. face those of we platform do, We’re longer through minutes. products what messaging to hiring from work the But the in Dave we products our a proud keep competition area more I’m on in of our

continues now exchanged has feedback been reach now people and and started positive every on with project messaging on working rolling tell on XXX be messages to and the apps, want infrastructure creates far. update WhatsApp both conversations people are to messaging. and they apps, to message messaging brings apps, best we’ve communication, use across experience from the to better to they the But billion long-term one us day everyone to to of a best message. across they Now roughly so that to Instagram forms features this, out want address app fastest-growing these alone. who still across early an different be fragmented we’ve like of Private that Messenger a first, often And let been able

we think this obviously that more want competition new results while – platform. for a this quarter and been The to a watch space entertained, and early optimistic they to Reels, that our that I short, new who community AR also also Instagram creators There’s creators people by been People create watch way come XXX,XXX and say have I’ve This the going and to make we’re telling us expanded have well, discover and of on to videos than always be here. me to but videos. express something way higher for by make as that value built to delivers been in the I content. quality impressed now. entertaining themselves short-form a a effects AR to and want bring has want quite lot

a advanced steps person place, Quest the than We people. This time have the X, lighter, make it $XXX. launched right has accessible another forward Xx It screen, Pre-orders there sense outpaced and another platform. pre-orders quarter with we delivers and more like sharper surpassed virtual holidays. worked also in a in by It’s and Quest a to computing the reality major point for real original building headset, have of our in next more new price just of presence, most you’re took or expectations. faster, to our right we’ve

parents the presence away phone glasses, yourself of laying without they’re take side even able a physical directions from to AR your which you sense take out be while out down taking country, if with for grail the foundation of not the sit on One having also for world. moment. of of going be the you’re We’re will up to delivering day other the the or dinner look and to your holy

it’s focus easily major blocks establish for which across will glasses, true Sheryl and the launch to talks way, Facebook can WhatsApp, all small and to us other gives Business across up ever. important Oakley, so WhatsApp the apps; Shops that be Paid Small the educators also to buy now people cover detail Luxottica, easier sets shortly, businesses meantime, their glasses. how a on time. integrating to to Supporting with with in Ray-Ban business make establish, directly in of dedicated next first a to chat, tab creators consumer businesses, new place and few AR by announced they people this lets sometime for maker Shop be and products working continues smart presence within small more and our business shop now events. I presence Facebook to going and partnering a businesses for and WhatsApp a features same shipped. We’re In more Suite out than just at the but find lets products or we’re Instagram shop, classes, a able Facebook, to the and products; our Facebook make will a building commercial when Events a we And money build we’re year. manage want going is The it Online call live-streaming we’ve

worry and actions regulation different could one continue on personalized I and by see Apple, companies allows going internet. small and we businesses people’s create personalized the the businesses especially while find on visions some advertising and need a world. that economic that is future their how to continue planned policy small data continue ads and relevant the that have EU, for I We in engaging the that customers, in the And proposals, jobs. new we’re recovery There showing businesses, privacy. like effect protecting to grow is in different need helping and questions that to meaningful of beyond. of to This for believe future very XXXX of up of are negative held platform and parts

advantage. strategic and Some different motivated others are values by by

to to the to going grateful small vision and the to tools services stand and where of access strongly every vision can that for everyone kinds business at been have. all who the new partners jobs being same a to able are of working companies I’m and have And can all to deliver reality. free always, big and We’re making products on And access with to our Facebook an up us. have every internet you this individual of year. we’ve journey grow for experiences thank of proud have create to this as I’m our this

Now, I to Sheryl. will over hand it

Sheryl Sandberg

customers, Mark Thanks you more strong Mark, stories, for for us today. their I and virtually. to quarter shifted of in thanking This as tell joining join was sell all hi everyone. and online businesses reach us a

a year-over-year billion, which $XX.X Our increase. total ad was revenue for is QX XX%

CPG growth and eCommerce, the visits. sectors and as continue dramatically. has and continue accelerated to pandemic like to transformation Our has across measurable but sales Retail, largest for The objectives website advertisers been see underway it optimize broad verticals we years, digital were for

As tools Mark platform and customers. across said, communicate more our virtual we our XXX than month create now with million to storefronts every free businesses have using

But the leapt potential finding steadily This selling a share before every clear points that is active We increasing on economic of see also pandemic, may now medium-sized forward. X point our Bureau, advertising than XX X which of to – less years. to in are be than and sales X of month, it sustained and simply reach of that’s more percentage XXX businesses this customers growth in to the an eCommerce’s average and vast by four rely pulled advertisers mean percentage doesn’t majority services days. businesses share U.S. small by year acceleration, Census grow. the change U.S. personalized increasingly will have be future across These businesses. by customers recovery According million retail being was past That online. driven alone continue the QX for will years we the

of have we the As efforts pandemic, accelerated the digital going businesses during them. support our number accelerates to

product the efficient. have simple operating tools make On been the clock build our around teams online new that working and to side,

manage customers. Business released date and Suite, a to Pages This Profiles time helping quarter save Facebook interface across and new stay we for apps, with businesses our them their to up

Events find them Paid and person, tab, showcase Checkout, businesses they new so can expanded the a also XX things created Facebook and even like brands business can’t shopping make a people than million viewing Facebook and with revenue. On and consumers they and WhatsApp, host introduced for more and Instagram discover it can Instagram We every love. Online And help discover buy a launched businesses people we using to to catalog month, when Shops, more now events to Shop generate there something to catalog they’d so buy. easier are we button their products in more live streaming

Shop WhatsApp a click to able the with icon be to also business. directly on you’ll chat Soon, a Facebook

they are products, learn to owners As also the business improving skills helping online. thrive need well our as we

small Resource – of from getting Our Hub to times millions since launch engaging and businesses set to with Business provides up its been on tens training just visited online March. in customers has everything of

marketing social our skills job with the needs community economy. launched train a digital ever more seekers in evolve, training a becoming to that like As our partnership in We Coursera critical changes new of too. are

of our businesses which to of the three-month help businesses We Buy XX and holidays. This Support Summer have Friday make Black their initiative more new Support our the also success launching communities. training most a built the support includes Black-owned people, million by to on of of reached than program, Season

I for the Responsible of right This new Global our the online we have continue with welcome content to use from We for are set in hate data in along debate helping for headwinds, about debate continue to integrity Twitter data, internet equally Last but done safe. Advertisers companies headed we with industry-wide keeping will we agreeing, want the focused and we the strong Alliance an Federation by including businesses, in we despite Dave which more content. invest advertising. that been While is acknowledge we’re talk an platform step in other and direction and harmful on taking work place about a range develop this month, took definitions speech harmful to rules was of areas to of important results There’s as of partnership advocating significant face important way Media. the to common and for There a do, election these standards. and YouTube to portability. World more. privacy and

greater more free for both ever before, face demand than ad personalized products. paid our from and tools, experiencing we scrutiny our also we While are especially businesses

who advertise to like including to technology, focus on saw a XXXX, southern Texas, increase like times doubled revenue QX helps – is specializing in New continues, it California, They York, in small revenue them made brand year ads nine their in by use website, products important sight visited marketing They and and can’t a businesses. versus more that can. of identify in Ann which apartment have spots a Kevin debate that which they Angeles month-over-month. Instagram the several hugely started A Co-Founders hot personalized states. lose customer women the than this eyelashes, ago. we big between to magnetic mass and good to and in their ads Ohio, their beauty who and As don’t for cosmetics. people post think Facebook, photos little are afford a possible one-bedroom role Glamnetic, beauty brands important personalized videos in might is people ads and and XX reach on a – campaigns Los broad, example personalized Small interested businesses play XX also

grow stories Kevin’s While There Ann businesses the so advertisers countless them and five are XX to year, many this million like struggling on helped among platform. has this XX. from our to are employees over

a secret personalized For and in potential have the success to many way force months to ingredient long medium-sized businesses These and protected use economic can and is small the the ahead, as out. on in rely tools they data makes uses data-driven advertising, safely and which businesses, recovery the in privacy day years day of the their that continue they be driving the as possible.

partners, We are be keeping quarters of so supporting precarious businesses. to on will businesses are make close our few small, to very new, The to working who grateful uncertainty. by and continue remain saying want and old and living happens, the incredible in our real focused am for a world day many they time next will or months deep people’s every Whatever to teams difference people we big make as the a how positive and online. transition I I connected and hard to lives. around in

Dave. here’s Now,

Dave Wehner

everyone. good Thanks, Sheryl, and afternoon

daily grew basis. reached in XXX active or XX% MAUs year. billion users Facebook XXX or by up last that our September, Let’s million billion last represented to least one XX% start In on services people of X.X the at of X.X our with year. least billion, at approximately billion on to September. X.XX basis, metrics. of DAUs a community used a monthly one active that approximately compared million people and we X.XX XX% used users daily approximately compared estimate monthly our services

noted. total year, rates have the up growth constant accelerated the been we $XX.X in QX XX% foreign was up advertiser a was with $XXX basis. XX% connection in from was strong QX to acceleration last resulting that driven are lower. QX or currency currency from The of XX% year-over-year exchange revenue would financials. largely XX% ad unless revenue basis. tailwind a currency revenue basis from QX by on QX advertising billion, the remained with to offline demand revenue on benefited million a $XX.X on Turning billion, constant pandemic. or shift All online total commerce saw to otherwise from had constant and comparisons We a

particular are seeing and We sized medium small businesses. strength among

our and challenging uncertain these ad role and user the businesses to in are reach all that playing during compared growth geography regions stay a connected proud in of improved consumers helping are services year-over-year rates On QX. times. We basis, people revenue

the the was were Both of impressions which both and ad year-over-year coupled by U.S. second growth improvements XX% driven our Stories shift Europe X%, with geographies ad slower and impression lower and from XX% across currency timing was selling strongest the X%. mix impacted headwinds. the new from product and price quarter. million, total revenue and pricing transitioned as foreign Asia-Pacific Quest tailwinds. ad primarily XX%, in at The due served in fourth QX, in and monetize was growth. by by decline advertiser Rest number Other regions ongoing Instagram. began benefited although to XX% increased of improved the Canada we rates, price currency and towards launch In which decreased to due a trends of World respectively. XX%. grew per services we grew demand per grew ads, Impression average $XXX primarily driven to and average was quarter X down the Facebook broad

now Turning $XX.X QX billion, year. XX% compared to up expenses. were expenses total last to

Reality related expenditures. increased investments driven primarily of primarily investments by due Cost consumer including the hiring terms efforts, and XX%, innovation XX%, a our marketing Sales line by operational slower infrastructure prior R&D depreciation of as slowdown core items: rate In & in XX%, and in Marketing to growth driven well both specific Labs, revenue product. a and increased Facebook as quarters hiring. increased notably than

full-time XX,XXX increased over hires the up G&A expenses. legal We to year. net X,XXX compared We Lastly, by driven XX%, over in technical last higher expenses quarter new in ended employees, XX% added primarily with QX, functions. primarily related

was XX% be billion, to and to retain Operating operating a recruit, $X talent representing our income this margin. environment. onboard, pleased with ability continue We in

crisis. our global by Jio chain cash be The beyond. higher. billion for be being related for new our reach income rate billion, to office was stock, we our why set center of supported is completed Capital energy XXXX and the or is billion. marketable centers, goal be by and billion data this securities. to XXX% zero was in That Our network and A the current to resulted carbon with to in the net-zero we addressing Limited, climate for one-time the expenditures tax $X.X carbon of energy. were will that XXXX. value achieve share. infrastructure. EPS and which tax in tax change plans QX in net reflects and investments in and emissions our cash R&D data supported addition one-time driven in expenses renewable a This are we $X.X per purposes. $X.X tax will benefit common global In operations capitalize $X.XX tackle end election to a Free quarter Facebook $X.X certain in was by benefit X% ended committed servers, $X.X $X.XX urgency recognizes flow XXX% help repurchased renewable Class and Tennessee a Gallatin, Net $XX.X buildings, We XXth Platforms to our investment announced by billion QX, of billion emissions in

Turning now the outlook. to

or that QX elevated due trend in the in to levels, and compared U.S. the slightly continue and the be impact In QX. number Canada and this of QX MAUs which expected, QX, DAUs expect to slightly As and we DAUs down of saw we in MAUs flat to the pandemic. from decline the Canada U.S. will and were Facebook

to now revenue. Turning

our QX year-over-year We during rate rate driven than higher by advertiser ad demand expect continued reported holiday to growth be the revenue our season. strong QX

Revenue. have Additionally, orders Oculus Quest strong, X which should benefit been Other

We acceleration for as online the headwind offline advertising our online, could we this revenue ahead continue largest to XXXX, experienced demand from pandemic significant a our this and increasing the XXXX of has of trend of ad a acceleration. Looking an change shift commerce to face ad to Considering we to a in in that believe to uncertainty. growth. a as contributed serve vertical, result commerce is amount

data XXXX. is measurement This from notably headwinds uncertainty targeting also as more in developments of operations the as changes, we developments, are impact In potential from the includes our landscape. companies in industry, regulatory and recent iOSXX, transatlantic platform the continuing progress. of regulatory viability European addition, European on we like in those light significant other transfers these well closely expect There around as and on our monitoring evolving headwinds

expenses. to now Turning

of billion XXXX the total of $XX be billion. $XX our XXXX in in that to $XX billion full be more billion, the expect technical $XX will expenses continued like development in normal prior of to We return by We a investments range of as to operations total travel. to range well billion narrowed talent, product $XX from billion, in driven expenses and range to as $XX levels anticipate spend areas our office year and

as estimates are yet preliminary have XXXX these However, we our not finalized budget.

outlook. We be expect XXXX prior capital our expenditures to approximately from $XX unchanged billion,

billion investments servers, $XX office expenditures billion, XXXX, infrastructure, be by to facilities. in data $XX the in centers, of driven we network For to capital range and anticipate

spend outlook that our was the Our due construction impact efforts. includes XXXX on to delayed of the pandemic from

tax. now to Turning

high-teens. our to be are and In be our keeping rate summary, the are our QX of expect up these in rate through experiences difficult our We times. questions. At XXXX role serve that in and services proud effective same the in full-year continuing in open to XXXX to tax connected we the are businesses tax playing the the Mike, let’s With better invest and global for to community. time, people call new that, mid-teens we aggressively products

Operator

first comes from line Brian Instructions] open for [Operator Stanley. now question-and-answer Nowak from of Morgan the Your session. the will lines We question

Brian Nowak

cetera. I you? of on taking one the et you OpEx consumer harder there Dave, the say two, next messaging, stories, different shopping, in for have need surprised your to Mark or invest as and you now sort behavior platform for you at pre-COVID? are question. impact about Are one sort value the delivering sure maturely Thanks types versus specific XX for any wanted way Thanks. my the you’re how priorities a of and initial as I of talent. couple technical be which you for that curious R&D your where What’s initiatives look make the videos, mentioned year sort of advertisers year. of to to changed for and people you most the these then projects may areas at posting start Dave. of Mark, over And And of sort guide, this look and that next one the have year you product does lot really of using there’s continue I’d the ask products than years?

Mark Zuckerberg

Sure. Thanks for the question.

was returning seeing, saw increase of behaviors an of the it In everything well, with in now connection. first the are was think but growth, what more is more which really permanent is of terms of baseline all, some what and in partially temporary I I was think doing of – an across in almost increase somewhat COVID, kind board, which we people we’re forms terms synchronous of of levels to trends, what there

I So be we’re of a seeing voice video elevated calling, areas. calling a think, lot and continued to in

know versus the continued see. Dave we in this we online, for have this a to seeing and of well. dramatic But area seems towards help in they to do that commerce grown a People certainly online small grow elevated infrastructure of while, sustained. that is have to and that happening entertainment, or baseline people And think where video that a both we online of seen for the whether both Cheryl on where the said commerce commerce That’s need think amount forward. quite trends foundation seeing a levels I been little but of has a that that today, return the increase from need and as communities a stronger we been theme things to more especially community. want with feeling building We’re we’re we’ve isolated and we will are shift seen way of really so a going gaming exactly even time I sort behavior haven’t double a out than down as for that don’t and businesses. see COVID as that off consumers like that’s invest to trend one-time more more we’re the going all that will decline That’s any which and turn a top

Dave Wehner

that take I’ll question. Brian, Hey second

in Mark across work hiring in products. in Labs, Facebook our longer investments new remarks, messaging, that of probably talk about, a we’re and prepared range well significant AR/VR term, as wide as continued I’d investment we’re making making Reality As big outlined through like his Reels. investments scenarios commerce

the we higher saved and XXXX, those And the a estimate The expense We working ultimately be billion parts $X.X total we that drives operations which to once of approximately XXXX, we the on that guide of office what expenses. to larger travel would mention off that XXXX office. expenses employee on have those other would expenses. in we kind is in thing expect count, higher have from workforce return seen is I

see of to a we’d those of snap So expect some back savings.

Operator

Your next the question from line Sheridan of UBS. Eric comes from

Eric Sheridan

Thanks so much. Maybe two also. I’ll try

or three philosophy love solve consumer company up around of a reality you’ve question and all is platform, answered question doing number checkout. in, for on could broad-based next roadblocks invest on way be around turning for you unlocks it, side, key I are do shopping of Sheryl, the sort about you’re whether and unlock the ask the five-year be we of just if investors in as or maybe but you guys either the investing of Instagram innovation you maybe and transformation needs probably you you past. to sort what in and Mark. Shops, augmented the What it to And long-term of that on your to are the talked sort against following one back get wave that that the see business? Dave Facebook of understand looking to First enterprise the would the commerce to I Brian’s Mark think but the it computing of from sort

short-term real QX QX? participants and for period, shifts through positioned you be into Thanks. statements are way shifts platforms the time commerce very the continue sort COVID there commerce the to And of are and to those thinking for how framed as around beyond? ability advertisers in Given we your you capitalize how about in in this those XXXX

Mark Zuckerberg

for in next I of computing Well, one the of milestones can take the first the some platform. terms Sure.

few I’m are really that looking things there that for. I think a

it’s the we’ll at a on thing returns. that. really type building It’s to will of but start. able going are to to our I’m milestone when next meant think the sufficiently you’re now, and sight to immersive. that alternative of possible, we the the we we in some pretty will VR the focused whole we big do it need VR, and socially kind technological be pieces all wearing that Whereas the of there you where lot self-sustaining the a because reality in, content So a independent I of clear maybe of development of acceptable fits point to you there’s consumer base around stylish be developers kind able there’s or those. that of glasses accelerate is that’s they number hope to at so funding active ourselves. augmented reality. to consumer are reality, what be large, just technology form have the that. of do developers to really bit factor independent be economically comfortable in install virtual Obviously, get platform would to systems, that. of kind point together good to that operating on hurdles the computing sense be line will reach And the that most not want they to is each But advanced of have it, of do will we the small going that. because glasses, you and Oculus viable Right as that AR be Part become down we and feel at then factor. home. sort years, to a will need above want form rimmed as here will come street fundamentally be headset make people to And VR, for XD It it harder yet. we’re is XX that there’s to ecosystem augmented a that of be out make system have think prioritize to in platform thick really spatial normal, few very get gaming need units that little that, million be like And

AR, were that But about. and I AR which doing things we’re work some operating So proud the the that using Quest we’ll very one the for made on and impressed of a progress very think also this. going of And all spatial to to X And it. the hundreds basically share that kind XD that around been Instagram I that work And and creators development and is think these excited of those people the are of and new Facebook that love and years I’m VR together people by – The thousands some of Camera number think product I ecosystem and Reels fundamental extraordinary. for of development. really there of and need effect that’s we’ve there, that, is seeing, product excited done teams that the we’re why I’ve that them are need pieces out. have made developers And ecosystem of well, and work. use Messenger. in where to is is quite few there there. we’re and on work system still of but building technological our come and it’s advances across the that be a that still I shared But

Sheryl Sandberg

with and talk world. around the on we pandemic, XX funnel. free businesses. discovery What on businesses people tools online. would coronavirus to and secure, We’ve doubled hundreds top app shift the to millions small could so the always massively of able we an who been connecting before of funnel our keep products for really our that accelerate down is – commerce the really the just down accelerated, massively focused who help commerce. so the that And happened more this pivot products rely accessible, but the that even people they making now we were to advertise, opportunity shipping be moving across We’ll convenient, in for We at on people we and saw about for commerce more businesses many million

Mark expansion in very WhatsApp. we’re with QX so, early, mentioned really progress. this in We’ve launched to We announced shops but we’re quickly and the pleased remarks. seeing. It’s his And just

these that and good building acceleration revenue, And provide we Facebook, and for we’re what building also tools it small it’s really our but think And make they brand Instagram. We’re works, for like handcrafts ad I’ll accelerates and products, businesses, to founded I soaps. is They share see because can were an and mall called indigenous at an sisters. were wellness There’s before Sage. local Sisters they by selling example. markets we coronavirus, kiosks. farmers’ And

They overnight. So that obviously just to away went Facebook Shopify. and pivoted

to on sales ads over their increased And online. X put this. X targeted sales times and able themselves by and We’re ad return our during have X.X – have times then used had

help on rely that provide our revenue. the that ad and drive it we is tools, us, so And we also help when what see businesses commerce small it can the can

Operator

America. from of Post Your comes line question next Justin from Bank of the

Justin Post

kind – mentioned Hey, you eventually Mark, to expense thank you. I match mean has of margins kind on have prior growth. that of revenue calls, growth to

with messaging, of revenues? to with some progress range starting show you of And about that expense really opening So with and years revenues pay-off Is other of the interesting growth. XX% thinking some with in on the DD deal just you. products in in show excited investing road? couple platforms. optimism are some could revenues? that down the Does have you something Thank midpoint the your Brazil over a Or about you’re some up that next

Mark Zuckerberg

revenue first there’s revenue not and which So Justin, growth. giving the on don’t on guidance there on why part of expense growth take that, guidance? guidance I growth the is we’re not implied And

that where right with big with given a shift messaging, that at from hiring for that Labs. basis the count got priorities online an reflects making expense and been lot Facebook growth that everything with midpoint, we the commerce, low-XXs and of see and COVID Reality right. And sort on with We’ve to growth also consistent is our to the we’re the now. investments successful in you’ve retaining have long-term It’s fairly head So talent. invest. we really got seen of the opportunities We’ve the in

there specific that you guidance not would based decline giving messaging? clear I margin do the revenue at Mark, expect want but year So we time. we’re that And be guidance, to a then it’s think cover this to next on

Mark Zuckerberg

Sure.

short yes. think I answer the is

around announced the is with of and think with tools I which be goal out messaging will already platform Facebook the we’ve coming a Shops, commerce build to WhatsApp all starting to Messenger.

automatically be business, and in too. services any those So a of kind have shop able presence set a to we’ll up establish that small

people We’re around payments follow-up a support and messaging, get complete through then that complete can and building business of too. number transactions people and so transactions tools out so messaging, can

a I’m ad also monetization this overall, way say. working of of One within can is excited run And take in can this products Instagram, in of or that, the kinds chat kind but and do commerce priority messaging ads, business and you someone that in can is build quite of the kind Facebook but or out to these is thread, to relationship the get and messaging, building out like that completed a transaction. person can of businesses growing about that Facebook early or with that quite so And further to Instagram well tools destination quite the all small for both a commerce Messenger either ads click WhatsApp that’s or in big to businesses the a consumer all well. thread,

Operator

from of Brent line Thill question next Your from comes the Jefferies.

Brent Thill

you. Thank

Thank bit know just I could far, any so engagement but observations talk about seeing you little you. what a real If early, in you’re there. the it’s maybe

Mark Zuckerberg

It’s And don’t in share do The work more share still more launched any have any don’t here. numbers I specific to the into as a quite There’s encouraging. would I you number you to lot well. We’ve numbers here We’ve XX features. excited assume countries. a that progress either. Reels I’m have here. happy Dave, here. to specific expanded than quite new about I’m results jump are of early.

Dave Wehner

Yes, right. that’s

results, encouraged I the early. think initial we’re but by still it’s

Operator

Heather the line from next question comes of your Bellini And from Goldman Sachs.

Heather Bellini

could you this I two the you wondering you’re advances call. quick Thank and I how know Dave the making from had top think have differentiation just a be update obviously commerce much about here one been I as for competitive to that missed differentiator your about asked accelerate the us, AR/VR from drive eCommerce lot an helping XXX had questions. I revenue you’ve But about work any perspective Mark, a do of could share advertisers a I was continues to front, Great. online. you. can how that. And of then percentage if with Thank on on on you.

Mark Zuckerberg

question into I the But think of of of help I reality that I will the years, in mobile new there opportunities on way be express because really of an Reels features kind is on next in and these platform. your long-term mean, a themselves kind one, Yes. good augmented it doing couple kind cameras. like fact as we our they’re a stories build and to increasing talk people to in think hits apps our it that mostly in about also

reality, of number have a you probably rolled tools in augmented as right. format, We commerce ad out – know,

kind – just So is items think type the people the thing for to to where like We for on sunglasses might them. you on get cosmetics, try like your stuff, tool type of can augmented look buy time. in they that lipstick the to of things see we an what would your can that like that or place look try more to living be camera reality a like on different in lot room, what over able We’ll of and more through house. to clothes, to able for put it your visualize be would

VR this app. as a and is in all there experiences computing and innovative work So also to development is foundational well. And around this AR that work XD will very longer help longer-term building that think new, will the up platform by term building of out of mobile that lot of facial I be to contributing our all

Dave Wehner

from update say the strength quarter, it’s our the Heather, continued don’t We advertisers to strong But and on advertisers. I statistic. our with response continued would in have we Dave. And growth medium-sized that, top see XXX advertisers’ direct small

in pleased of really advertisers business challenging broad consumers – the we’re helping those end with in with quarter connect we that advertisers the So with saw base climate. this and

seeing with pleased that really I’m what So on we’re front.

Operator

from next JPMorgan. Your comes question Anmuth of line Doug the from

Doug Anmuth

your the and one briefly. for or far. your would think could efforts the or One Dave. you benefits for how Sheryl about for And should then Thanks possible time it expect we taking milestones rollout you work data three rolled months about degree the And leverage and impact? benefited Or have to of that sets questions. and to hoping interoperability there? minimize key other business the still then on more as I so you Mark, Dave, did Sheryl you ago, is the Mark, out? same therefore on Thanks. actually IDFA was it impact around you touched with is has and delay talk whenever

Mark Zuckerberg

only leading primary Android. that But way the U.S., as the previously benefit, big doesn’t of quite brought between about it been been apps. inter-op. make now, It’s features live the that quite use a it way. is the The out is U.S. world countries in messages world positive In around in that messaging. is of a the project working on I been large can a can people app around this initial population in think the there on send The we’ve that I it. Messenger is Instagram to that between We’ve app. same feedback lot people infrastructure of And portion messaging most Android can’t iMessage a it rolling including messaging the and speak interoperability Messenger. about that use. of has on And to it the in long-term number quite we lot certainly Instagram exist started I a that’s that course, the countries had still a there’s people of in think

places. I a experience makes think it where because business apps you countries all in China not businesses just Europe, It It the ecosystem, people have you that compared makes to reach people have to which in harder to is India different all the they’re to sure it or a the to different that these confusing. Brazil, means across if So or what or out reach little people. experience now messaging U.S. in of build have work fragmented very lot would these were bit to

There So choose people can across just apps so all can they it, and the of our our messaging for make our the is reach starting prefer well. one goal that good to has bring that the There’s in different the want all can networks apps this want is to add of out continue happen using can who to things interoperability that people people most of they to using what it be are roll of And should a engineering simplify going we between as to that that to project. and make want. But different interoperable multiple had from their have. they work features here. to choice Messenger, it three is And This if connected apps to whichever more I to to the bit the favorite. one they and start think Messenger, WhatsApp these pretty large course, reach that But see a function of and like it’s WhatsApp to a Instagram, to after Instagram more even want infrastructure we’ve little system. that’s We course, vision. been interoperability. more

Dave Wehner

to certain I of their And iOS implementation privacy iOS did guess, as the more it Obviously elements the Apple XX delay Doug on XX some IDFA, of of launch and relates broadly. initiatives.

felt that that QX. have in to prior we seen in won’t be So I where impact QX, think would expect

in I mainly change impact. rather a in So impact it’s think the it’s than delay a the

that XXXX. to So we’re going experience in

app network. disproportionate on relates IDFA, it’s thus Specifically have to to impact and audience installs our as going a it

So their is time. that’s are a difficult big looking what obviously challenge to grow business developers who for in app a

that how to mitigate when But implementation work will continue also whether Businesses that can these of platform impact. changes. happens. face of terms reach ads in to in on to effective we time run they all think out that the we the can us challenge that there’s So, do remain

headwinds our We’re various options, year but looking there that going on be view as are result at next of iOS – significant there’s specifically XX. is to a changes, these best

Operator

MoffettNathanson. line of Your Michael next the from Nathanson question comes from

Michael Nathanson

a changes law. would June in you yesterday talk PACT Thanks. think want I can comfortable for Section one for Sheryl. bit more And about It be the you we to about had how for the maybe within propose? I like crisis. these about changes wonder, business seems to what CEO go? they what most I XXX do Mark verticals been for making are costs to then proposal Sheryl, to Can acceleration changes you the lagging certain second. to had Instagram? this spend to than this And the and And have the maybe one need talk Facebook Facebook? of a embracing verticals take where before? of Facebook to for moves their crisis has Mark, back accelerated and more you what Does that would Act that you resemble you’re

Mark Zuckerberg

can talk the about first I So, one.

for creates how that getting cases problems effective countries results. actually the and have of different them we harder understand of some – or worse more and different seeing point, this it to in dealing makes types how either the with have makes at So benefit regulation adopted makes

content one that the to improvement example, can regimes but companies is So, us. like going was one that of get there which need where or were think that basically be piece by transparent moderation to companies are aligns by focuses And the going basically And it’s system urgent before be by of Maybe, want a problematic, get France on the within much certain and to countries to is requires are content percent content I where think of what it categories that service. incentives I of is counterproductive, way have on have think quite approaches encourage But different to short companies how creating you a that’s some get not that’s few content saying basically, plenty people do harmful to best And is that that seeing. in there of show important but require moderation on visible the how the of certain have that not in the to a minimize aspect companies doing people, I a a portion looking to towards right, seen done, that content process, have people problem. as of report amount systems harmful the what countries, it, on to other other or really the aren’t most I is seen reality is getting that sooner. its examples, many of report content right to there people. lot think basically reporting is seem the to to it is, thresholds to they’re think time. to And our meet to deal a period rules regulatory be to are I one of at good face, you to are things worked point with that, going that, that

compared content effective So, less people the stuff treating looking it much to going overall. think of be how prevalence I are all to bad equally seeing just at

hard there healthy what do and this countries a you more it’s other stuff details helps this kind for lot or doesn’t? will of of But me So, sense specific at of get because are a point, this how create Facebook to that pretty think on specifically, of ecosystem in can what the I examples lands. to enough and other companies language to speak cost nuanced or it is depend

Sheryl Sandberg

have to first businesses sized for very often time. based, and needed These on and So huge is pandemic challenges they broad the have important for especially digital our become in growth the businesses. small-to-medium it’s verticals, faced

by So, the let online privacy of do get important tools way online, to can more ads very and data, a more themselves more have the we important. to that can’t, companies the economic provide free campaigns The are protective been whole survival the them mobile audiences we use the or and buy a geographies. growth which hit companies Big and Small to higher SMBs. stay board to so can want driven are ad they countries ability really across and increasingly been and broad-based afford personalized buy presence presence, in more increasing afloat and important. has

of misunderstanding of is bit government altogether there a combined ad in and have the that revenue leading on a say eCommerce top vertical was lot take as while political experienced and to travel certainly, percentages but about like low that Now, verticals, a more spending ads about during U.S. online; are think of want education well. our rebound is auto size starting businesses to this, growing the have talking globally that verticals I well. opportunity globally, are and the XX will we’re of this single-digit nicely, and to some in in there themselves services. the example, other also, are it’s of as there but the retail; to I lend have others political a not also is lagged still QX, ads or U.S.

Operator

from RBC. question from line next Mahaney Mark of comes Your the

Mark Mahaney

more double-click for social A a about inventory is talked commerce. the build and you willing becomes the more in and bit question it’s more revenue transactionable, marketers more that associated little – on Sheryl. you that that and an with, just to explain I therefore for valuable bid it Could ad as guess, of out the are Sheryl, acceleration it.

Thank in between the activity acceleration that the growth or Just in network and commerce link acceleration ad revenue. explain on you. – the the

Sheryl Sandberg

I about think really was just They There sold locally. they the locally, businesses businesses. is advertise offline pandemic moving acceleration of an consistently before were online. businesses acceleration were the to I that lot talking a

seen of has Businesses online, was – curbside changing, customers whether the into XX to you our even And way doing once delivering online, bought. all stores we reach you massive going not first pickup. businesses million businesses an had you because were reach have that XXX a right? online different and the You customers, it’s they using customers doing open, person, and businesses things very free get in our but walked they’re small their a a are into see tools, already this over couldn’t million businesses the that acceleration see online why business. online finding these to time. for had that you and what powered already presence, – advertisers. we store selling, acceleration. there Because world, why have just That’s When lot you’re in people know letting once acceleration to or walk things products, That’s have really

acceleration it on online so that is to overall commerce. And

free with world are all number using that’s Some us. our I the tools small are the of our businesses think over increased of tools advertising eCommerce and really that

Deborah Crawford

Operator, last we’re one going take to question.

Operator

comes line Squali Youssef from Truist Your last the Securities. question of from

Youssef Squali

then and balance what just like with Great. you cash you’re amount Thank on you billion guys as online gains YouTube, is a term taxes, just for sheet, do a of Mark free guys you your how and Mark, need was win $X.X emerging how added for question you. much. your see for past you have very I competitive in with gaming – the higher wondering AR in on capital managing change Twitch for administration I work Dave. the and longer given you time. do think you One one and this players how flow – advantage very quarter you’ve an short-term? your prospects opportunity Thank opportunities get capital cash position you the the And to over the and you. today, on allocation maybe or and way and and change just manage to compete to dividend and doing VR potentially are returned entrenched is they’ve how

Mark Zuckerberg

talk can gaming. about I

is about. excited I’m this an area that So very

stream exciting community. build tools. gaming, also are through both that in help doing near-term growth through our to games a be a so just and right projects that longer-term virtual It’s do to the personally. using but the augmented want the one area you’re People most a the of area Facebook you a it’s gaming using big I that a live long-term, services here I initiative have our think gaming reality we’re And here. of and think I it’s people very number know, enjoy things and people lot we – able

our means that I cloud ads the game different growing sort companies kind think do. a core completely focus the build who are get It’s is new Facebook community work the our going our is customers. launched and service, of into to plugs that into we around just that gaming initiative, and game a we helping both We it of do streamers better as quite features quickly. things part of our across out work company which social and a doing approach, just that want we’re plugs that not sort well, we able serve to

So combined that in to all of seeing you’re with of kind those and basically video grow communities we’re work once. gaming just doing order the at

VR well. come the as Over I that longer-term, piece will the think obviously into

of Oculus. And community building the be cloud a Some offer lot be on that ability exciting well. over innovation big coming of gaming will this, the growth we’re years. do But a for around to doing useful as will I VR stuff think of very opportunity and we’re course that a

Mark Zuckerberg

Youssef. thanks Yes,

allocation, This significant the product, so of as capital. drive of we that sure in well our we past is core Labs. our long-term an important in our to investment of as like to made strategic some investing the the Facebook investing longer-term make was in Jio growth that includes outlay initiatives and in that growth investing in a Reality capital quarter, platform, continuing our focus make investments on So business

the necessarily our continue authorized share in changes in factor to I any to shift lead an to have and but by tax certainly We approach. the in landscape, expect active that repurchase wouldn’t program a board fundamental we’ll

Deborah Crawford

today. look again. time we Thank We speaking to you forward for your Great. joining with you us and appreciate

Operator

Ladies lines. you Thank us, and today’s for concludes disconnect gentlemen, this now your conference you call. joining may