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$FB will generate ~$158 this year per US sub, nearly identical to $NFLX, but with over twice the gross margin, and 4x the users.
FB has grown US ARPU ~30% for 8 years, while growth has stalled recently.
I think $FB is cheap relative to its long term opportunity set. But (ctd)
FB has grown US ARPU ~30% for 8 years, while growth has stalled recently.
I think $FB is cheap relative to its long term opportunity set. But (ctd)
I also think investors are due for a reset in expectations for topline growth. Incremental growth opportunities in payments, gaming, commerce, international ARPU, all start from tiny bases. So it might look like growth is slowing for a while, even if execution remains strong.
FB can’t continue to grow US ARPS at the rate it has been. Not to say they can’t grow it at all, but competition is getting better and many customers are reaching the point of mediocre marginal returns on FB ad spend.
International ARPU is the multi-decade opportunity. And that
International ARPU is the multi-decade opportunity. And that
wont be a smooth CAGR like US business has. Advertising in markets like Ethiopia may never yield the same ARPU as the US does now in our lifetime. I hope that they do, bc it will mean great things happened for the world and for equality. But progress can move in fits and starts.
I suspect Trump-related defections to be a blip in the grand scheme. More interested in the platform becoming a better product, and non-ad revenues a more substantial part of the mix. That has been a decade-long challenge for $GOOG and I suspect it will be no easier for $FB.
