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Facebook Earnings: How Investors Learned to Stop Worrying and Love the $5 Billion FTC Fine

In recent years, Facebook has endured privacy lapses, data scandals, and a $5 billion fine. Throughout it all, it's often given investors something of paramount importance to them: better-than-expected growth. On Wednesday, the social-media giant delivered on that front again.

Facebook's stock rose as much as 3.6% in after-hours trading Wednesday after the company said revenue in the second-quarter rose 28% to $16.9 billion, above the $16.5 billion that Wall Street analysts had been forecasting.

The company also posted earnings per share of 91 cents, down 48% from the same quarter a year ago, thanks in large part to a $2 billion legal expense related to its settlement with the Federal Trade Commission. Analysts, who had been expecting that one-time charge, focused more on the adjusted EPS that excluded it. Facebook's adjusted profit came in at $1.99 a share, which beat Wall Street's $1.88-a-share forecast.

Despite the scandals and bad press plaguing the company, Facebook has a knack of continuing to grow both users and revenue. Both monthly and daily active users grew 8% last quarter, to 2.4 billion and 1.6 billion, respectively. Facebook estimates that 2.1 billion people use Facebook, Instagram, Messenger, or WhatApp every single day.

Meanwhile, the company is continuing to extract more ad revenue from its audience. Average revenue rose 18% globally to $7.05 per user. In the U.S. and Canada, Facebook's most lucrative market for ads, average revenue per user rose 28% to $33.27.

As part of its FTC settlement, Facebook also agreed to set up an independent privacy committee on its board. But the company is likely to face even more regulatory pressure. The White House and Congress are both taking a hard look at social media companies and their outsize influence on social communications and political discourse. On Tuesday, the Department of Justice announced it is launching an anti-trust probe aimed at big tech, which Facebook will most certainly be a part of.

And in its earnings announcement, Facebook also warned investors of an antitrust probe into its services that the FTC had opened up in June. "The online technology industry and our company have received increased regulatory scrutiny in the past quarter," Facebook's said.

In a conference call discussing earnings, CEO Mark Zuckerberg warned that revenue growth could slow later this year, thanks to "ad-targeting headwinds" caused by regulatory actions as well as product and platform changes to address privacy concerns.

Zuckerberg even blamed inadequate government regulations on privacy and hate speech for the heat that tech companies are now facing. “We believe that there needs to be a regulatory framework in place,” he said. "My broader concern is that if that doesn’t get put in place, then frustration with the industry will grow."

Facebook should be careful what it wishes for, however. More regulations could cause new and prolonged headaches, not to mention higher compliance costs, for the company. After all, many of Facebook's controversial actions seemed geared toward amping up its quarterly profits. As long as it succeeds in that single task, it's likely to keep winning the approval of its shareholders.

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—The trouble with regulating big tech

—Will A.I., blockchain, 5G, and VR give companies a competitive edge?

—Listen to our new audio briefing, Fortune 500 DailyFollow Fortune on Flipboard to stay up-to-date on the latest news and analysis.

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