Shares of Facebook tumbled nearly 5 percent in early trading Tuesday after Chief Financial Officer David Wehner warned analysts on an earnings conference call that ad revenue growth could slow “meaningfully” in 2017.
According to Wehner, ad growth was one of three leading contributors to Facebook’s growth, along with user growth and increasing time spent on the platform. But since the social media giant is getting close to maximizing advertisements without damaging user experience, it won’t be able increase ad revenue at the same growth rate next year.
Facebook earnings and revenue beat Wall Street expectations on Wednesday, with the company posting earnings of $1.09 per share on revenue of $7.01 billion, compared to analyst predictions of 97 cents per share on sales of $6.92 billion, according to a Thomson Reuters consensus estimate.
The social media giant’s shares rose above $133 per share to all-time highs last week. As of Wednesday’s close, the stock was up more than 21 percent for the year so far.
—CNBC’s Harriet Taylor, Evelyn Cheng, and Anita Balakrishnan contributed to this report.