Will Facebook Inc. (FB) be able to continue its long string of sales and earnings beats when it reports on earnings after the close this Wednesday?
1. Ad sales growth, and where it's headed
2. Daily active users (DAUs)
Daily active users for Facebook's core platform and Messenger rose 3% sequentially and 17% annually in Q2 to 1.33 billion. Though those are impressive numbers for a company of Facebook's size, sequential DAU growth trailed the 4% sequential growth seen in monthly active users (MAUs), after many quarters of outpacing MAU growth. That points to slightly lower per-user engagement.
The Q3 report should provide us with a better idea of whether this was a one-time blip, or something to be more concerned about. From the looks of things, Facebook has been getting more aggressive about sending notifications to users in an attempt to get them to visit its site and apps more often.
3. Spending guidance
In July, investors cheered Facebook's cutting of its annual spending guidance: The company now forecasts 40% to 45% GAAP cost and expense growth (adjusted from prior forecasts of 40% to 50%), and predicted its capital spending would be at the low end of a $7 billion to $7.5 billion guidance range.
Much like Amazon Inc. (AMZN) , markets have signaled that they trust Facebook to make big investments wisely. Nonetheless, there will likely be another positive reaction if Facebook once more cuts its spending plans.
4. Ad product commentary
Mark Zuckerberg mentioned on Facebook's Q2 earnings call that he wants his company to speed up the pace at which it monetizes its messaging apps. Look for analysts to press management once more on what they're planning. Any commentary given about Facebook's efforts to grow video ad sales will also be closely watched, particularly given reports of early issues with the mid-stream video ads it has begun running against professional content.
This column has been updated from Oct. 12 to contain up-to-date consensus estimates.
Facebook won't be the only company reporting after the bell. Here's what to expect from GoPro (GPRO) :
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