Brief:

• Facebook's advertising revenue rose 25% to a record $20.7 billion in Q4 from a year earlier as the social network expanded its number of advertisers by 14% to 8 million from 7 million in October, per its quarterly report and conference call with analysts. The ad growth boosted total revenue by 25% to $21.1 billion, the slowest Q4 growth since the company went public, per data compiled by FactSet. Full-year revenue grew 27% to $70.7 billion. 
• Facebook's profit rose 7% to $7.35 billion, as expenses surged 34% to $12.2 billion amid a jump in legal costs, including a proposed $550 million settlement of a privacy lawsuit in Illinois. The company is awaiting court approval of a separate $5 billion fine to settle a privacy lawsuit with the Federal Trade Commission, Facebook CFO David Wehner said in the conference call.
• Facebook said the user base for its main social network rose 9% to 1.66 billion from a year earlier, which beat the 1.65 billion forecast by FactSet, CNBC reported. Facebook doesn't report separate user figures for Instagram, WhatsApp and Messenger, but said the number of people who use at least one of its services rose 11% to 2.26 billion from 2.03 billion a year earlier.

Insight:

Facebook's 25% ad revenue growth is enviable in the media industry, but does mark the fourth quarter that the social media behemoth has seen growth of less than 30% — a sign that the company is maturing with the broader digital ad market. Last year, the company said that about 94% of its total ad revenue came from mobile devices, underscoring its near-total dependence on smartphone advertising.

During the conference call, CEO Mark Zuckerberg and COO Sheryl Sandberg discussed the company's efforts to boost commerce and payments on its platforms, although they didn't provide any figures on ecommerce activity. Zuckerberg said it plans to expand WhatsApp Pay to more countries in the next six months after testing the service in India. Indian regulators have resisted the company's plans, citing concerns about data standards.

"Beyond WhatsApp Payments, we're working on several other efforts to help facilitate more commerce, from Facebook Marketplace to Instagram Shopping to our work on Facebook Pay or our work on Libra," Zuckerberg said. Libra is Facebook's proposed blockchain digital currency that last year faced withering scrutiny by U.S. lawmakers and regulators. Facebook has made ecommerce a bigger priority on apps such as Instagram, which in the past year has boosted its shopping features.

Privacy issues continue to dog Facebook, as demonstrated in its disclosure of a $550 million proposed settlement of a long-running lawsuit in Illinois. Facebook was accused of violating the Illinois Biometric Information Privacy Act by collecting and storing facial recognition data of state residents without their consent. The settlement is pending approval by U.S. District Judge James Donato. While Facebook admitted no wrongdoing, class-action attorneys said in a statement the proposed settlement will set a record for a lawsuit related to privacy issues.