What you need to know:

• Facebook has reported strong revenue for Q3 2021, seemingly immune from a raging and ongoing whistleblower scandal.
• While revenue dropped slightly from Q2 2021, advertising revenue was up 33 per cent on last year.
• “Headwinds” from Apple’s iOS14 are likely to increasingly impact bottom line, Facebook says.
• The company says TikTok, which just reached a billion monthly active users, was likely the biggest competitor it had ever faced.

Facebook shares jumped after the company posted strong revenue and profits in the third quarter of 2021, shrugging off sustained negative coverage, internal document leaks from a whistleblower scandal, and “headwinds” from Apple’s iOS 14 tracking changes.

The social platform reported US$29.01 billion in revenue, with a 33 per cent jump in advertising revenue year-on-year. Advertising accounts for 97.5 per cent of Facebook’s revenue. While a marginal quarterly decline, Facebook expects next quarter to yield billions more, which would represent record growth.

Earnings per share were $3.22, a 19 per cent increase on last year’s $2.71.

Other key points:

• Daily and monthly active users rose by 6 per cent, to 1.93bn and 2.91bn respectively.
• The company’s headcount rose by 20 per cent on last year to 68,177.
• Facebook expects Q4 revenue to be between $31.5bn and $34bn.

“Our outlook reflects the significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple's iOS 14 changes, and macroeconomic and Covid-related factors,” Facebook said.

CEO and founder Mark Zuckerberg addressed recent sustained criticism after a former employee turned whistleblower revealed internal documents about how the company understood its impact on users and made decisions.

“I believe large organisations should be scrutinised… Good faith criticism helps us get better,” Zuckerberg said. “But my view is that what we're seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company.”

He said the company had invested $5bn on safety and security in 2021. Meanwhile, as Facebook faces mounting antitrust actions, Zuckerberg flagged TikTok, which reached 1 billion monthly users in September, as “one of the most effective competitors we have ever faced”, especially in the younger cohort.

Sheryl Sandberg, Facebook’s Chief Operating Officer, was more explicit about Apple’s changes to mobile tracking.

“The biggest is the impact of Apple’s iOS14 changes, which have created headwinds for others in the industry as well, major challenges for small businesses, and advantaged Apple’s own advertising business,” she said. The Financial Times reported earlier this month Apple’s privacy changes tripled the market share of its own advertising business.

“Overall, if it wasn’t for Apple’s iOS14 changes, we would have seen positive quarter-over-quarter revenue growth. And while we and our advertisers will continue to feel the effect of these changes in future quarters, we will continue working hard to mitigate them.”

The company said it would break out its Facebook Reality Labs as a new reporting segment, focusing on virtual and augmented reality.