Facebook Inc.'s first-quarter revenue rose a better-than-projected 26 percent, underscoring the strength of the largest social-media company's advertising business in spite of regulatory threats and privacy concerns.
The company also said it set aside $3 billion in the quarter related to an ongoing investigation by the U.S. Federal Trade Commission, which hasn't yet been resolved. Excluding that cost, profit was $1.89 a share, topping the average analyst estimate of $1.62. Shares jumped as much as 5.7 percent.
Sales rose to $15.1 billion, the company said Wednesday in a statement. That topped the $14.97 billion average prediction of analysts surveyed by Bloomberg.
Facebook's namesake social network now reaches 1.56 billion users every day, matching Wall Street estimates, and 2.38 billion a month on average, slightly better than expectations.
Facebook is reaching saturation in its most lucrative advertising markets, the U.S. and Europe, while faster growth is coming from developing countries that aren't as profitable.
The company's sales gains are increasingly being driven by photo-sharing app Instagram and advertising in its Stories feature, a Snapchat copycat.
Facebook also recently started testing an e-commerce product called Checkout, allowing people to buy products within Instagram, another potential source of revenue via the fast-growing app.
"Advertisers love Stories ads, because they are engaging and fun, and because they can cost less than in-feed advertising," EMarketer analyst Debra Aho Williamson wrote in a note before earnings. "Advertisers say they are concerned about Facebook's many problems, but that concern hasn't led to a drop in ad spending."
The company's shares jumped as high as $193 after the report. Earlier, they declined less than 1 percent to $182.58 at the close in New York, leaving them up 39 percent for 2019.
Net income, including the legal costs related to the FTC inquiry, fell to $2.43 billion, or 85 cents a share, Facebook said. In last year's first quarter, the company posted earnings of $4.99 billion, or $1.69 a share, on $11.97 billion in sales.
The FTC has been in discussions with the company over alleged privacy violations related to a 2011 consent decree. On Wednesday, Facebook estimated the range of loss for a settlement at $3 billion to $5 billion, adding that "there can be no assurance as to the timing or the terms of any final outcome."
Even as the company weathers a series of privacy breaches, scandals and questions about its influence on political discourse, Facebook's business has remained resilient, mostly on the strength of its vast network of users and its ability to let marketers precisely target them with ads.
The company has come under intense scrutiny for the amount of personal information it collects from users, as well as how it safeguards and shares that data.
Since reports in March 2018 that it allowed the personal details of tens of millions of users to be shared with political consultancy Cambridge Analytica, Facebook has been the subject of probes by governments around the world.
Earlier this month, the company faced fresh criticism for taking too long to remove a live video of a mass shooting in New Zealand and for allowing the clip to be circulated across the internet.
The social network also recently disclosed that millions of Facebook and Instagram passwords had been stored unencrypted — in plain text — and visible to employees, though the company said the information wasn't used improperly.
Researchers also found troves of Facebook user information inadvertently posted publicly on Amazon.com Inc.'s cloud servers.
Seeking to stem the tide of criticism, co-founder and Chief Executive Officer Mark Zuckerberg recently called for new global regulations governing the internet, recommending governments come up with rules on hateful and violent content, election integrity, privacy and data portability.
His statements came after Democratic U.S. presidential candidate Elizabeth Warren, a Massachusetts senator, urged the breakup of Facebook and other internet companies. She said the businesses have amassed too much power and are damaging the economy and American democracy.
In March, Zuckerberg announced that Facebook is undertaking a massive overhaul to focus on private, ephemeral and encrypted communication, saying that more people want to interact privately or in more intimate groups — rather than the open-sharing model he built the company around.
It's not yet clear what the impact will be on advertisers. The company also aims to integrate Facebook's different online properties, allowing users to send messages between WhatsApp, Instagram and Facebook Messenger. Critics argue that this move would make it harder for regulators to split up the company.