Facebook revenue growth to be hit by data breach record

Facebook is expected to report a continued growth slowdown for revenue and profits in its third quarter earnings on Tuesday, as a string of major data breaches weigh heavily on the firm.

Facebook finance chief Dave Wehner predicted the deceleration at its last earnings call in July, with consensus estimates as collated by S&P Global Market Intelligence putting revenue for the three months to September at $13.8bn (£10.8bn). This represents growth of 33 per cent year-on-year, compared to a growth rate of 42 per cent in its second quarter. Additionally, earnings per share are expected to decline 7.5 per cent to $1.47.

Last quarter, expenses began to grow faster than revenue at 50 per cent year-on-year as the effects of several cyber hacks took their toll. This is expected to continue, as Facebook hires to monitor content and beef up its security teams.

Moreover, fears remain for the fate of Instagram, Facebook’s main growth engine, after both of its co-founders departed unexpectedly last month.

Advertising revenue from Instagram represents a growing share of Facebook's total mobile revenue, coming in at nearly 29 per cent this year and predicted to take 35 per cent next year, according to Emarketer.

While Facebook's own monthly active user numbers are only expected to rise up to 8 per cent this year compared to 2017, Instagram is forecast to reach over 714m users worldwide at a jump of more than 18 per cent year-on-year.

All eyes will be watching the social media giant as it reports its results this quarter, after declining user numbers wiped more than $120bn off Facebook's market value in a single day at its last earnings call.