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Facebook Inc. (FB) - Get Facebook, Inc. Class A Report  soundly beat earnings expectations for its third-quarter earnings report, but missed on revenues and user growth expectations. After initially falling as much as 5% after-hours on its Q3 results, Facebook shares recovered but then fell again during the earnings call with investors. As of the time of this article, Facebook shares were down slightly at $145.78.

TheStreet is live blogging Facebook's third-quarter earnings. Please join us. 

Earnings came in at $1.76 per share, missing Wall Street's estimates of $1.46. Revenue was $13.7 billion, missing estimates of $13.8 billion. Net income for the quarter was $5.14 billion. Daily active users missed estimates, coming in at 1.49 billion, a 9% year-over-year increase, compared to estimates of 1.51 billion. 

CEO Mark Zuckerberg noted in a press release that more than two billion people use at least one of Facebook's services every day, and highlighted the areas that Facebook is focused on for user growth. "We're building the best service for private messaging and stories, and there are huge opportunities ahead in video and commerce as well," Zuckerberg said. 

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Instagram monetization was much of the focal point for Facebook investors leading up to the earnings print, and while management did not disclose much on that front, it likely will on its earnings conference call at 5 p.m. ET. 

In addition to updates on Instagram, Facebook's elevated costs are also top of mind as it continually hires more people to deal with fake news, user security and data privacy issues. The company reported that its headcount increased 45% year-over-year.

"The problem I think, the worry, is that costs are growing faster than revenues -- that can't be sustained," Maz Jadallah, founder and CEO of AlphaClone, an ETF firm aiming for above market returns, told TheStreet. 

Facebook's operating margin shrunk from 50% in the third-quarter last year to 42% in this year's third-quarter. 

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