By Jeff Horwitz
Facebook Inc.'s profit machine showed little wear and tear from the beating the social-media giant has received lately in Washington, though chief executive Mark Zuckerberg warned the political pressure could soon take a toll.
After briefly mentioning Facebook's strong third-quarter financial performance on a quarterly earnings call Wednesday, Mr. Zuckerberg defended the company's controversial moves that have made it a punching bag on the 2020 campaign trail and on Capitol Hill.
Mr. Zuckerberg cast Facebook's actions as aligning with his personal principles and said the company was willing to pay a price for standing by them.
"Over the next year of campaigns, we are going to be at the center of the debate," Mr. Zuckerberg said, warning that the platform's centrality to political discourse could drive additional investigations. "I expect this is going to be a very tough year."
As with other recent Facebook earnings, booming revenues and strong operating margins were all but taken for granted. The company's $17.7 billion in total sales and $6.1 billion profit both exceeded analyst estimates compiled by FactSet.
Shares of Facebook climbed more than 5% in after-hours trading. Before Wednesday, the company's shares had risen more than 43% year to date, well ahead of the average for the technology sector.
Mr. Zuckerberg defended how Facebook has handled political advertising and the company's broader role in moderating and amplifying content online. Less than 90 minutes after Twitter Inc. chief executive Jack Dorsey said the company would stop running ads on its platform about politics and controversial social issues, Mr. Zuckerberg said that Facebook had no plans to follow suit.
"I've considered whether we should not carry these ads in the past, and I'll continue to do so," he said. "On balance, so far, I've thought that we should continue."
Mr. Zuckerberg said critics have fundamentally misread Facebook's motivations and rejected allegations that the company's refusal to fact-check candidates' advertising was designed to appeal to conservatives. Ads directly from political candidates themselves account for only 0.5% of the company's revenue, he said, adding that Facebook expects to win few friends in either party.
"I'm pretty sure everyone is frustrated with us," Mr. Zuckerberg said. "I could be wrong, but my experience running this company so far has been that if we do what we believe is right, even when it's unpopular for years at a time, then eventually, it has worked out best for our community and for our business, too."
Facebook's earnings reflected strong user growth. The Menlo Park, Calif., company said it has 1.62 billion daily active users of its platform, up 9% from just under 1.5 billion a year ago, with most of the new users outside the U.S., Canada and Europe. Average revenue per user rose to $7.26, up 19% from $6.09 a year earlier.
The company reported an operating margin of 41%, down slightly from last year but well above the mid-30s level Facebook had predicted last year when it pledged to invest more in user safety and security.
Facebook's solid earnings come amid mixed third-quarter results for tech companies. Twitter stock fell sharply last week after reporting lower revenue and earnings than expected, and Alphabet Inc.'s profits fell short of forecasts amid higher costs. Snap Inc., meanwhile, reported narrowing losses and faster growth than analysts had predicted.
The company's strong earnings contrast with its struggles in Washington. Facebook faces antitrust investigations from the Federal Trade Commission, the Justice Department and more than 40 state attorneys general. Leading Democratic presidential candidates and a bipartisan collection of congressional lawmakers have faulted the company for alleged bias, inadequately addressing misinformation on its platform or both.
Pressure from the White House and Capitol Hill contributed to the key financial-industry partners dropping out of Facebook's Libra digital currency project, and the Justice Department has asked the company to shelve its plans to introduce encryption across its messaging services unless it can address alleged public safety risks.
Still, Facebook continues to power ahead in its business even while grappling with those issues.
While Facebook breaks out only limited information on Instagram, the photo-based social media platform it acquired in 2012, the parent company's earnings were in keeping with the unit's continued strength. Digital-advertising-buying platform Kenshoo reported that its clients' Instagram spending was up 42% from a year earlier, significantly better than the growth in social-media advertising overall.
In a note released immediately after Facebook's earnings report, SunTrust analysts Youssef Squali and Naved Khan said the results showed "that value and market share gains within Internet and digital media continue to accrue to the largest players."
Also on Wednesday, Facebook said that Sue Desmond-Hellmann is stepping down from its board. The former biotech executive and current chief executive of the Bill and Melinda Gates Foundation had served on the board since 2013. She is the third Facebook board member to step down this year.
News Corp, owner of The Wall Street Journal, has a commercial agreement to supply news through Facebook.
Write to Jeff Horwitz at Jeff.Horwitz@wsj.com