The Menlo Park, California-based company reported fourth quarter revenue of $28.07 billion with earnings of $3.88 per share. Analysts were expecting revenue of $26.4 billion with earnings of $3.22 per share.
Facebook shares were lately down 0.6% to $270.63 after initially falling close to 5% following the release of the report on Wednesday.
"We had a strong end to the year as people and businesses continued to use our services during these challenging times," said Mark Zuckerberg, Facebook founder and CEO. "I'm excited about our product roadmap for 2021 as we build new and meaningful ways to create economic opportunity, build community and help people just have fun."
The company said that it is currently benefitting from multiple tailwinds including the shift to online commerce and the shift from services to products.
However, Facebook said it expects to face "significant ad targeting headwinds in 2021." This will be fueled by platform changes, most notably Apple's (AAPL) - Get Apple Inc. Report user privacy-related changes to iOS14.
The firm also warned of an "evolving regulatory landscape" in 2021.
Facebook reported 1.84 billion daily active users in Dec. 2020, an 11% year-over-year increase, with monthly active users rising 12% year-over-year to 2.8 billion.
The company's headcount increased to 58,604 employees, up 30% year-over-year.
BlackBerry sued Facebook in 2018 in California, charging that the social media network and its WhatsApp and Instagram subsidiaries infringed on BlackBerry messaging app patents.