Good afternoon. My name is Mike and I will be your conference operator today. At this time I would like to welcome everyone to the Facebook Second Quarter 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] This call will be recorded. Thank you very much. Ms. Deborah Crawford, Facebook’s Vice President of Investor Relations, you may begin.

Thank you. Good afternoon and welcome to Facebook’s second quarter 2019 earnings conference call. Joining me today to discuss our results are Mark Zuckerberg, CEO; Sheryl Sandberg, COO; and Dave Wehner, CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward‐looking statements. Actual results may differ materially from those contemplated by these forward‐looking statements. Factors that could cause these results to differ materially are set forth in today’s press release, and in our quarterly report on form 10‐Q filed with the SEC. Any forward‐looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. During this call we may present both GAAP and non‐GAAP financial measures. A reconciliation of GAAP to non‐GAAP measures is included in today’s earnings press release. The press release and an accompanying investor presentation are available on our website at investor.fb.com. And now, I’d like to turn the call over to Mark.

Thanks Deborah, and thank you all for joining today. This was an important quarter for us. Our community and business continue to grow, and there are now more than 2.7 billion people using Facebook, Instagram, WhatsApp, or Messenger each month, and more than 2.1 billion people who use at least one of our services each day. We continue to focus on our four priorities for the year, making progress on the major social issues, building qualitatively new experiences, building our business, and communicating what we stand for more transparently. I’m going to focus on the first two priorities today, but first I want to talk about the recent news that we reached a settlement with the FTC over our privacy concerns. As part of this, we’ve agreed to pay a $5 billion fine, but even more importantly, we’re making some major changes to how we build our services and run this company. This will require investing a significant amount of our engineering resources in building tools to review our products in the ways we use data. It will also significantly increase our accountability by bringing the process for auditing our privacy controls more in line with how financial controls work at public companies with Sarbanes Oxley. We’ll have to certify quarterly that we’re meeting all our privacy commitments. And just as we have an audit committee of our Board overseeing our financial controls, we will now also have a new privacy committee of our board that will oversee our privacy program and work with an independent privacy auditor that will report to this new committee and to the FTC. We’re asking one of our most experienced leaders in product to take on the role of Chief Privacy Officer for Product, reporting to me and managing our privacy program. We’ll also…

Thanks Mark, and hi everyone. It was a strong quarter for our business. Ad revenue grew 28% year-over-year and we saw strong growth across all regions and on both Facebook and Instagram. Mobile ad revenue was $15.6 billion, contributing approximately 94% of total ad revenue. As we’ve been discussing, we’re making significant investments in safety, security and privacy while continuing to grow our community and our business. We know we still have a lot of hard work ahead of us, but this quarter once again shows that we can do both. We are committed to earning back trust through the actions we take. In the lead up to elections around the world, we’re doing all we can to get ahead of threats and develop smarter technology. The European Parliament elections in May were an important test for us. We created an operation center in Dublin to bring our experts together and make decisions quickly. We also worked closely with third parties across the EU, including 21 fact-checking organizations. As Mark shared, these investments are starting to pay off and we remain committed to doing everything we can to stop bad actors. We are also focused on increasing transparency. At the end of June, we made our transparency tools available globally for ads about social issues, elections or politics. These tools show who paid for an ad, how much they spent, and who saw the ad. Helping people understand who’s trying to influence their vote will help us better defend against foreign interference and other abuse. We’re going to continue to make investments to protect our platform, because it’s the right thing to do and it’s good for our business over the long-term. At the same time, we are focused on growing our business by helping advertisers grow theirs. Consumers often…

Thanks, Sheryl and good afternoon, everyone. Let’s begin with our community metrics. Facebook daily active users reached 1.59 billion, that’s up 8% compared to last year, led by growth in India, Indonesia and the Philippines. This represents approximately 66% of the 2.41 billion monthly active users in June. MAUs grew 180 million or 8% compared to last year. In terms of our Family metrics, we continue to grow and estimate that on average, more than 2.1 billion people used at least one of our apps on a daily basis in June and more than 2.7 billion people were active on a monthly basis. Turning now to the financials. All comparisons are on a year-over-year basis unless otherwise noted. Q2 total revenue was $16.9 billion, up 28% or 32% on a constant currency basis. Had foreign exchange rates remained constant with the second quarter of 2018, total revenue would have been approximately $574 million higher. Q2 total ad revenue was $16.6 billion, up 28% or 32% on a constant currency basis. In terms of regional ad revenue growth, North America and Asia-Pacific were strongest and both grew 30%, followed by Europe at 25%. Rest of World grew more slowly at 21% and was impacted by currency headwinds. In Q2, the average price per ad decreased 4% and the number of ad impressions served across our services increased 33%. Similar to last quarter, impression growth was primarily driven by ads on Instagram Stories, Instagram Feed, and Facebook News Feed. The year-over-year decline in average price per ad reflects an ongoing mix shift towards Stories ads and geographies that monetize at lower rates. Payments & Other Fees revenue was $262 million, up 36%. This year-over-year growth was primarily driven by sales of new products, notably Oculus Quest and Rift S. Turning now to…

[Operator Instructions] Your first question comes from the line of Brian Nowak from Morgan Stanley.

Thanks for taking my question. I have two, the first one on the core Facebook app. I was wondering if you could tell us a little bit more about the impact on engagement as well as monetization from the redesign. Dave, I think you mentioned some optimization and product win. So, what are you seeing on the core app, I guess, now a big weight on engagement and monetization. And then can you talk to us a little bit more about some of the ad targeting headwinds that you foresee in 4Q and in 2020? Thanks.

Sure, Brian, it’s Dave. I think on the Facebook app, I just say the DAU trend paints the picture broadly for Facebook. We’re seeing stability in the developed markets and growth in the developing markets. And so, we’re continuing to see solid performance on Facebook, and we’re pleased with the engagement levels that we’re seeing overall on the Facebook app. So, I think the first half has been solid from that perspective. And then the second question was on the ad targeting related headwinds. So, we think of those in really three components. The first is regulatory as you think about things like GDPR and other impacts and how those will be rolling out globally. The second is platform changes as it relates to operating systems and a more of a focus on privacy from the operating systems and the impact that that can have on measurements and also on targeting. And then the third is our own product changes as we put privacy more front and center. So really, it’s the compounding of those three issues that are creating headwinds that we think are going to impact us, as we get later in the year and into 2020.

Your next question comes from Eric Sheridan from UBS.

Thanks so much for taking the question. Maybe on a bigger, broader topic for everyone on video, how do you see video evolving as a consumption mechanism on all of your platforms and in terms of how users consume video what they’re attracted by? Second would be how that’s informing you investing in video content. How should we think about the investments going forward and how that might impact growth versus margins? And then third, the opportunities on the advertising side that video might present over the next three to five years? Thanks guys.

So, I think video has been pretty important. It’s really followed technological change, if you think back even four years, you can’t really take a video, a lot of videos buffered on your phone. And now, you think about what people can do. They can consume video very easily on a phone. They can share video, they can take video. And so we’re seeing very – we’re seeing a lot of interest along a lot of consumer products. It’s also probably worth mentioning that video is within a bunch of our products. So, we certainly have video in feed and people can put video into stories and different places. And we also have the specific Watch place, where we’re looking at original content. I think to the second part of your question, which is how do we think about video content. Most of the content, people put up on Facebook video or other is user-generated, that’s also true of the watch content itself. We have made some investments there in creating a more dedicated place to watch video. So, while a lot of the content is still provided by people in a way that we’re not covering costs, we do have a strategy of investing in great content that really starts the flywheel growing – going and we’ve been pretty pleased, I mean it’s not the biggest effort anyone has, but we’ve had some hits from Tom and Time to Tom and Time to Red Table Talk ,sorry for your loss, and we’re seeing some really nice engagement numbers on these shows. And the best of them actually carry over into the Facebook community, because the best of the people creating those shows and starring in those shows are also engaging with Facebook, and I think the vision Mark laid…

And then Eric, I think you asked about margin impact. I’d just say that the video content budget is already factored into the guidance that we’re providing on expenses.

Your next question comes from Ross Sandler from Barclays.

Hey, guys, can we just go back to the deceleration comment. So, we appreciate the color you just gave, Dave. But at the same time, you said that the impression growth in 2Q was driven by Instagram Stories, Instagram Feed and then Facebook Feed. And so if those are kind of the current drivers and we’re likely to continue to see those send in the future, what specifically do you see is slowing down in 4Q in 2020? Is that core Facebook, any additional color on like the surface that might slow down from some of these changes? Thanks a lot.

Sure. Ross, I mean if you remember we’re seeing good impression growth across Instagram Stories, Instagram Feed and Facebook Feed. So, we’re seeing good impression growth across all of those. We are seeing faster growth in impressions coming from Stories and then also coming from geographies that monetize at lower rates on things like Facebook News Feed. So even though we’re seeing good impression growth that’s impression growth it’s flowing through at a lower price point. Then, the way that growth was driven in the prior year. So that’s contributing to some of the deceleration, specifically as we look out into the remainder of 2019. When we get into Q4, we’re going to be similar to how we had good product wins in Q2. We also had several product optimizations in Q4 that contributed a strong performance that quarter. So, we’re going to have a tougher compare on that basis. So, just broadly, I think we expect the revenue deceleration trend that Q2 is not mark a reversal of that, but we expect to kind of return to constant currency revenue growth deceleration as you get into the remainder of 2019.

Your next question comes from Doug Anmuth from JPMorgan.

Thanks for taking the question. One for Mark and one for Dave. First Mark, how are you thinking about the opposition that you’ve received so far around Libra? Because it changed your view of the timeframe at all in terms of rolling out the currency. And then second, Dave just, you talked about the higher demands of privacy. Can you just talk about how that could impact expense growth as you think about 2020, where in the past, you’ve talked about more moderate expense growth for next year? Thanks.

Sure. So, on Libra and similar to our approach on some of the important social issues that we face around encryption and content regulation and things like that. We get that these are really important and sensitive spaces. So, our approach has been to try to have a very open dialog about this, right. If Facebook from a few years ago would have probably just showed up and tried to release a product on our own. And now, the approach on all of these fronts is to outline the ideas in the values that we think an eventual service should have. We’ve opened a period of, however, long it takes to address regulators and different experts and constituents questions about this and then figure out what the best way to move forward is and that’s certainly what we’re planning to do with Libra. So, we worked with the 27 other members of the association to publish the white paper to put the idea out there expecting that this is a very important and heavily regulated area and there were going to be a lot of questions. We’re going to have to work through that. So, I think we’re currently in the process of doing that. We are trying to provide a safe and stable and well-regulated product. So that’s always been the strategy and we’ll continue to engage it here.

And then Doug, you were asking about the impacts on expense growth. We’re not giving guidance, specifically on the 2020 expense outlook. But the privacy efforts do require significant investments obviously and compliance processes, people and then technical infrastructure and those are factored into the 2019 operating expense outlook. One of the impacts that I’d point to you is it’s also a reallocation of resources around privacy. So that will have an impact on our overall product development as well. So that’s something that I’d factor in both in terms of just the overall impact to the business, not purely just the expense side.

Your next question comes from Lloyd Walmsley from Deutsche Bank.

Thanks. Two if I can. First, can you just talk to us about early learnings from the test of Instagram checkout and what some of the key hurdles are to kind of scaling that more broadly? And then secondly, on OpEx, it looked like you saw a fairly meaningful step up from Q1 to Q2 despite fairly limited head count growth. So, just wondering if there’s anything you would point to there that might explain why those are diverging a little bit in that quarter?

I’ll talk about checkouts. So checkout is in, we talk a lot on this call about early stage things, this is earlier than that. We are in a very small closed beta with 23 brands, which for Facebook is about small as something could be. On – obviously, as I said, small, but there is working with the brands, we’re pretty excited by their feedback. We’re not in a rush to scale this quickly. We’re always focused on the consumer experience and we want to make sure we really get this right. I think the way to think about checkout is kind of in a larger picture of what we’re trying to do in terms of commerce and shopping on our services and apps across the board, which is, we obviously have a lot of consumer engagement in our products and that’s great. We obviously have felt some good and robust ad tools that are helping us grow our business quarter-after-quarter. If we can help people close the loop a little more, so they are looking more directly products, that makes our ads more valuable. If we can help people check out and pay for the products and even buy the products, it makes the consumer experience better. It also closes the loop on the data and measurement, we’re going to need going forward. So, we’re excited about these efforts for doing a lot across the board. All of them are in their early stages and we think about this primarily from a consumer and closing the loop point of view more than a monetization in and of itself point of view.

And then Lloyd, you were asking about the step-up on the cost side in Q2 versus Q1. A couple of things that I’d point to the cost of revenue was up 49% in Q2, and that’s really the flow-through of depreciation that you’re seeing from the big CapEx build cycle that we’ve been in and that’s starting to flow through in the cost profile of the business. And then if you look at the G&A line, obviously that was impacted by the accrual for the FTC settlement as well as some other legal expenses including the SEC settlement. So, you had some G&A expenses that were higher in the quarter as a result of that.

Your next question comes from Heather Bellini from Goldman Sachs.

Great, thank you so much. I wanted to follow up on two comments, one watch that Sherlyn was just talking about related to checkout. I’m just wondering if you could share what the feedback has been so far from the brands that are in the closed beta and how this has helped maybe some stats if they have them like how it helped maybe conversion for the brands that are doing it versus maybe the traditional way they were selling on Instagram. So, if you have anything you could share there and then Dave, just back to Ross’ comment related to the deceleration that you’re referencing. I mean in the past, you’ve given us a little bit more specificity, not too much, but you’ve said kind of mid-single digit or low-single digit decel. Just wondering if there is any other color you could provide us here for the back half in 2020 when you’re painting this at a high level? Thank you.

Yes. on the check outs beta, it’s just really small and really early. We definitely hear that it decreases at friction in the shopping experience, but with 23 brands in a product, that’s just too small for us to take any real learnings. We are working with them on iterating the product experience for now.

And Heather on the deceleration, we’re simply guiding that we would expect that we would see constant currency revenue deceleration sequentially with that being more pronounced on a constant currency basis in Q4, again, due to the tougher comp for us in Q4 not giving specific quantitative guidance on that at this point.

Your next question comes from Justin Post from Bank of America Merrill Lynch.

Great, thank you. So Mark, from the outside, it’s really hard to tell what’s going on in the regulatory environment and status with regulators. I guess good news on the FTC settlement, but the new investigation has been started. I guess wonder if you could just give us high level to the extent you can. Is the company making progress with regulators both here and in Europe, and how you feel about that? And then, Dave, if you could talk about Europe since GDPR implementation. Has it really been a meaningful difference in your ad revenue growth rates there versus other regions? Thank you.

Sure. So, I can talk about the regulatory picture overall. Over the last few years, we focused a lot on a number of major social issues everything from preventing election interference to reducing harmful content to protecting privacy. Now, I’m talking a lot about data portability. And on each of these, I think that there is work that we can do and that we certainly have a responsibility to really make sure that we perform well on them. But at the end of the day, when our systems are mature, there are still going to be trade-offs between important values that we all have something, I mean, on content between free expression and civil discourse and we’re moving hate and things like that. Those are hard questions that at some level, we’re always going to do the best that we can, but we think that having a more democratic process for setting with some of those norms are would be helpful. On privacy, there are really important questions about how you define what you want the system to be in terms of how much you’re locking down data versus are you making it portable for to enable competition and innovation and academic research and things like that. So, we believe that there needs to be a regulatory framework in place for each of the major issues that I just talked about. And my broader concern is that if that doesn’t get put in place, then frustration with the industry, I think, will continue to grow. And so we’re trying to do our part to help advocate for a good regulatory framework in each area and they will come in different forms. So in some places, we’ll – there will be laws passed and others might be working with regulators and having some structural rules imposed on us like with the FTC settlement; in other areas, it might be self-regulation like around, content and speech in the United States. That’s what I’d expect because of the, first amendment here is a strong protections on speech. So this is important overall, we’re very focused on it. I do think we are making progress on working through the issues and addressing them. We’re, I think, in a much stronger place in elections now. Our content systems are getting more mature, there’s a lot of more work to do in each of those. But I think we are making progress. And as said this is a global problem, not just these are global problem, not just American one. So working with folks across Europe and the other continents as well is important too.

Hey Justin, it’s Dave. As I noted in my comments. Europe is growing more slowly than North America and APAC. That said, we had a strong quarter and we’re pleased with results in currencies of factor in that delta as well. Overall, we did see Europe had a reacceleration of growth in Q2 versus Q1. And part of that is lapping the GDPR implementation. So, I think overall we’re kind of pleased with what we’re seeing around Europe, but it’s still growing more a little more slowly than North America and APAC.

Your next question comes from Mark May from Citi.

Thanks for taking my questions. First, we’ve seen nice improvement in the rate of expense growth lately. And on the Q4 call, you said you expected in 2020 the expense growth will be more in line with revenue growth. Just curious if that is something that you still feel comfortable with? And then secondly in terms of WhatsApp and WhatsApp status specifically, what are your plans as it relates to ads on WhatsApp status? Have you tested here or have any plans to test? Thank you.

Yes. Thanks, Mark. So in terms of, in terms of our overall expense outlook. Our current outlook for 2019 does suggests that we’ll see margins come down this year versus 2018. Even if you were to set aside the $5 billion FTC accrual. We’re not providing specific guidance for 2020 or beyond. The investment priorities remain the same. In addition to the privacy investment priorities that we outlined today will continue to invest in key areas like core product infrastructure, innovation, video and content and safety and security over the long run. So we’re not at this point providing any more specific guidance on 2020.

On WhatsApp Status ads are not available. We’re very focused for WhatsApp on the consumer experience. But I will take a minute to talk about Stories ads in general, because I think eventually depending on our ability to use data across platform that applies to WhatsApp it’s probably pretty important part of the story that’s going on with Facebook right now. So we do have Stories ads available across Facebook, Instagram and Messenger, and I think one of the most important things we learned as we were doing it transition to mobile is if we made it easy for our advertisers to place the ads, make sure they understood the measurement they were having and also make sure the ad format worked, businesses would move more quickly. Usually people move before businesses people move to mobile before businesses and we certainly saw the same with Stories. But I think one of the successes you are seeing we’re having right now is that we are helping people move to Stories more quickly because of the lessons we learned. So for example, automatic placements, what automatic placements do is they convert Feed ads into a Stories format and deliver the ads wherever they get their best results. And I think it’s product innovations like that that have gotten us to three million advertisers. So rather than across the three properties we have available Facebook, Instagram and Messenger. So rather than go to every advertiser both through our sales force and through our online tools where we sell and say we have a new format, you need to create the new format, you need to figure out the placement being able to just take what they are already doing like Feed ads, converted into Stories and place at anywhere helps us move people into these formats. It’s also a case of we have a lot of inventory on this. And so there is a real benefit right now to being an early adopter, the pricing is very attractive. And so we think the mix shift to Stories is the big opportunity for us and advertisers over time. I’ll say one more thing, which is that Stories don’t monetize right now at the same rate as News Feed. We’re optimistic about the growth over the long run, but we are as always very prudent and careful on the consumer experience.

Your next question comes from Mark Mahaney from RBC.

Thanks. I just wanted to focus on WhatsApp and I know you’ve had WhatsApp payments in beta in India, you launched that last year. Could you just talk about the – if there are any particular factors that are causing a delay in that and maybe just takes a long time for a product like that to really gain traction, but is it consumer awareness of it is it regulatory push back is their technical hurdles and what does that tell you about the and maybe nothing, but what does that tell you about the ability to take that WhatsApp monetization or payments functionality embedded with WhatsApp and launched it in other markets. I said, I know you said you’re going to launch in other countries, but what are the lessons from India tell you about the pacing of that? Thank you.

So it’s a regulatory approval question in India at this point and we had a license to roll it out as part of an initial test, the test went better than we even expected it would. I mean for a product that you would expect to need to be widely available to be useful, right, in order to – for someone to know that they can send money to someone else. Even a limited test the feedback was very positive. So, I’m quite confident that when we can roll this out broadly it’s going to be meaningfully valuable to the user experience. We’re also working beyond India, in a number of other countries and hope to have this rolled out to a large percentage of the people who use WhatsApp within the next year. So that’s the goal, we’re pushing forward on all of these issues and should have more to talk about soon.

Your next question comes from Michael Nathanson from Moffett Nathanson.

Thanks. I have two, one for Sheryl and Dave and one for Mark. So Sheryl and Dave, you noted the growth I guess in Europe this time in acceleration. And can you talk a bit about maybe the regional development of Stories and either the embracing the advertising community or the user community by region. And then, for Mark on the answer on currency arguably Crypto is going to take a long time to you to get approval or to build a product. Do you see building a fiat currency wallet for Facebook and Instagram. I know it’s about WhatsApp but how does another title wallet non-crypto wallet develop if it takes a while for the other products to rollout meaning Crypto takes a while for approval. So does non-crypto fiat currency become an opportunity for you?

Hey, Michael, it’s Dave. I guess we’re not really providing detail on region. I would say Stories is today from an impression growth perspective really about Instagram Stories. So it maps where we’ve got good adoption of Instagram globally. So we’re certainly seeing good growth in places where Instagram is strong, including the U.S., so that’s been good to see. And as we continue to work on Facebook Stories, we’ll have more opportunity as well with Facebook and will map to the reasons where Facebook is stronger. So, I think we’re seeing good growth on Instagram. I think that will continue and continue to drive impression growth and then we hope to continue to make progress on Facebook where we’re seeing growth, but it’s off a smaller base.

And on payments, I mean, the short answer is, yes. We’re very focused on payments with fiat currencies as well and making it so that when you pay in one service, whether it’s WhatsApp or in Instagram Shopping or in Marketplace your credentials can be shared and there’s a shared payment system across all those things. So that’s a – certainly a big area for investment. Overall these areas around commerce and payments, I think are one of the most exciting areas of product development for the next several years. I mean the way that we kind of see the products now is we’ve helped people map out and wire up their networks over the last several years, and now in each of these apps we have opportunities to help people get more value from the networks that they’ve created in some of that is going to be on the social side, especially around creating communities and groups and some of it is going to be more on the economic and opportunity side and there we’re doing a whole lot of projects. I know that Libra is the one that has gotten the most attention recently, but it’s really just one of a set of things everything from Instagram, Shopping which is going to help people connect to brands and emerging creators to Facebook marketplace, which is more consumer-to-consumer paying and buying and selling used goods to things like WhatsApp business, which is more about connecting with small businesses and then across the payment landscape, helping people do payments and existing currencies and also trying some newer approaches that can hopefully bring down the cost of doing payments around the world. We’re just very excited about all the – everything in this area and it’s one of the biggest areas that we’re focused on for the next several years.

Your next question comes from Ben Schachter from Macquarie.

Mark in 1Q, you mentioned specifically that GDPR had an impact on the business. I was just wondering if you can give an update on that? And then longer term on Facebook, you focused a few times now on buying and selling goods there. Just wondering if you can comment on how you think of services versus goods for example monetizing recommending a house painter versus selling a widget. And also can you talk about the timing of how marketplace might evolve? Thanks.

Yes, I don’t know, Dave if you want to talk about the GDPR impact. And then I can end.

Yes, Ben. So, just in terms of GDPR I kind of address that earlier, we do see that having an impact in Europe that we did see a reacceleration in growth in Europe, as we have lapped the initial implementation of GDPR. So that’s promising, but we continue to see Europe growing just a bit slower than the rest of the regions. But overall, not a whole lot of additional color to provide there.

Yes. And in Marketplace, we definitely are going to focus on some of the areas that you talked about including jobs is already a pretty meaningful focus where a lot of people do find jobs and business is less jobs through Facebook. I don’t want to, I don’t know what our last public status here. So I’m not going to attempt to site something but it’s meaningful. And the business model around this is probably not going to be charging for listings but advertising. And in order to promote things both in and what we’re doing on Instagram with shopping and in Facebook Marketplace and in the general approach to payments is providing as affordably as possible to improve the user experience and complete transactions which will of course make the tools more valuable for businesses overall and should make the ad prices go up. And that should be the primary thing that we’re focused on. Someone just handed me a piece of paper, which says that we have helped a million people find jobs. So there is the stat.

Your next question comes from Colin Sebastian from Baird.

Great, thanks. A couple from me. First off, any update on the higher profile for groups in the Facebook app and any perspective on how that’s impacting engagements. And then Mark, the five-year timeline for the privacy focused vision. I guess, I wonder if we get a better sense for what the key milestones are along the way and why that’s a five-year outlook perhaps versus the shorter period? Thank you.

Yes, I could take both of those. So in the Facebook app overall after helping people connect with friends and family, helping people connected with communities is the next most important social problem that we believe we can help address and that’s just going to be an area of increasing value in the product. That is going well since we started rolling that out after F8, I think Dave may have mentioned this earlier, but in case you didn’t just to emphasize this point I think part of the – our strong performance over the first half of this year, a meaningful part of our overperformance compared to what we had expected is because of strength and engagement in the Facebook app over that period. So that’s – it’s generally going well overall and we’re very optimistic about communities in particular going forward is one of the drivers of that. What was the second question?

The five-year.

Right, okay. So on that’s on the privacy vision. So for the next year to two a lot of the work that we need to do is just about getting the architecture right. Right so establishing, we have to rewrite the networks on Messenger and on Instagram to be more client and server oriented to be end-to-end encrypted. We’re working on interoperability, that people will be able to choose to use between the services. These are pretty big technical projects. We want to make it so that the infrastructure that these services are built on is the most secure and most reliable and fastest and most widely available of any of the major messaging platforms out there, we think that that’s the foundation to build a successful private platform on. Then we need to do things like what we’re doing with WhatsApp business, which is building up the business ecosystem and that’s just something that our playbook on this but this is a multiyear journey where first we deliver the consumer product experience, then we create organic business experiences and then only as the last step, are we really able to ramp up having business that pay for things that are meaningful for them within that. So it’s not that you’re not going to see progress on that along the way, you’ll certainly see milestones every six months or 12 months. But before this is really the biggest driver of our business, I do think that that’s going to be a number of years.

Great. Operator, we have time for one last question.

Your last question comes from Brent Thill from Jefferies.

Thanks, Dave. I think a lot of us are having a hard time reconcile that the tougher comp in Q4. It was your easiest comp and you just accelerated your constant currency growth in the quarter. So I guess, just, is there any change in terms of the visibility or the contracts that you’re putting together that lead you to that, any other color. I think there is a number of questions, just trying to understand why you have such strong conviction in that decel?

Hey, Brent. So in terms of the outlook. Remember, we don’t have contracted revenue. We are constantly working from an auction perspective. So our forecasts are based on supply and demand and how we see the different product launches playing into that different optimizations that we make. So there’s a lot of granularity that goes into thinking about how revenue will progress that ultimately it’s going to depend on the supply and demand characteristics in that given quarter when we do that and we see that we expect constant currency deceleration. And when we get to Q4 we’re going to be lapping some particularly successful optimizations that we had in Q4 and that’s going to contribute to more of a decel in Q4 than we think we’ll see in Q3. So that’s the reason I’m characterizing the guidance the way I am.

Great. Thank you for joining us today. We appreciate your time and we look forward to speaking with you again.

Ladies and gentlemen, this concludes today’s conference call. Thank you for joining us. You may now disconnect your lines.