Facebook blows away Q4 expectations, but calls out Apple's iOS privacy change as a 'headwind' for 2021

• Facebook on Wednesday reported $28.1 billion in Q4 revenue, beating expectations of $26.4 billion.
• Facebook said monthly users grew to 2.8 billion, versus 2.76 billion expected by analysts.
• Facebook reported GAAP EPS of $3.88, beating analyst expectations of $3.23.

Facebook on Wednesday reported record numbers for its fourth-quarter earnings and revenue, beating Wall Street's expectations.

The company generated $28.1 billion in revenue in Q4 2020, up 33% year-on-year.

Facebook CFO Dave Wehner said in a press release that the company has benefited from the surge in ecommerce during the pandemic as well as consumers shifting "towards products and away from services."

Wehner also cautioned, however, that Facebook's growth rates this year should be considered in the context of how the pandemic impacted its ad business last year.

Facebook expects growth rates to be "stable or modestly accelerate" during the first half of 2021 due to the pandemic putting a damper on ad revenue during the first half of 2020, Wehner said. But its subsequent recovery during the second half of last year could cause year-over-year growth rates to drop again in the second half of 2021.

The company also warned again that it will face "significant ad targeting headwinds" in 2021 due to privacy changes Apple plans implement in iOS 14 as well as an "evolving regulatory landscape." Facebook said it expects the iOS changes to begin impacting its business in the later part of Q1 2021.

Here are the key numbers, as well as what Wall Street was expecting. Estimates are based on Bloomberg consensus data.

• Revenue: $28.1 billion, up 33% year-on-year ($26.4 billion billion expected)
• Ad revenue: $27.2 billion, up 31% year-on-year ($26 billion billion expected)
• Daily Active Users: 1.84 billion, up 11% year-on-year (1.83 billion expected)
• Monthly Active Users: 2.8 billion, up 12% year-on-year (2.76 billion expected)
• Earnings Per Share (EPS) GAAP: $3.88 ($3.23 expected)

Facebook had seen a rare decrease in its number of daily- and monthly- active users in the US and Canada between Q2 and Q3. The company said at the time the slight decrease was a result of "elevated" user numbers in Q2 due to the pandemic, and that it expected to see a similar trend for Q4.

While Facebook's US daily active users dropped to 195 million in Q4 from 196 million in Q3, its monthly active users climbed from 255 million to 258 million. The company is also making significantly more money off each of those users, with average revenue per user climbing 35% to $53.56.

Facebook is also facing a pair of landmark antitrust investigations, one from the Federal Trade Commission and another from a group of 48 state attorneys general. While experts have predicted that the lawsuits likely won't force the company to spin off past acquisitions like Instagram or WhatsApp, they still signal stronger regulatory headwinds for the company.

Facebook remains the subject of intense scrutiny over how it responded to misinformation surrounding the US presidential election results as well as the violent attacks on the US Capitol earlier this month, which was coordinated in large part on social media sites, including Facebook.

Facebook faced a mass advertiser boycott over its policies during Q2 and Q3, but it's unclear whether the movement had a significant detrimental impact on the company's revenue into Q4.

In after-hours trading, the company's shares were essentially flat at $274 a share.