Facebook India reports jump in FY19 revenues and profits
Facebook India Online Services, the Indian arm of the US-based social media giant, clocked a 71% growth in revenues for the financial year 2018-2019 to Rs 892 crore. Net profits grew 84% to Rs 105 crore, according to the company’s latest regulatory filings.
In FY19, the company started selling advertising inventory to local customers. Along with another undisclosed related entity, the company resells advertising inventory to local customers and derives revenues from the display of advertisements on Facebook and satellite apps such as Instagram and WhatsApp.
It follows the impression-based and action-based revenue models. An impression is counted as delivered when an advertisement is displayed to a user. Similarly, delivery in action-based advertisements is based on a user taking action based on the advertisement.
Despite the push into advertising revenues, technology-enabled business services continued to remain the mainstay, accounting for 70% of overall revenues at Rs 629 crore in FY19.
Facebook India’s profitability also improved to 25% in FY19 from 21% a year ago on account of higher revenues.
The company faced higher legal costs in FY19, which rose two-and-a-half times to Rs 15 crore. Along with other social media platforms, the company is facing intense regulatory scrutiny from the Indian government regarding fake news and user data.
Facebook India’s advertising costs rose 28% to Rs 120 crore during the reporting year. It also paid higher salaries to its employees, which increased to Rs 103 crore, up 33%.