Facebook has faced a lingering storm of criticism from users, advertisers, and regulators over the past few months since the Cambridge Analytica data leak situation became public with Zuckerberg & Co. having to go on its Beltway and Brussels regulatory tour. While this has been the darkest chapter in Facebook’s 14-year history, based on our recent user and advertising checks we believe the company has seen minimal speed bumps in 2Q around advertising strength and user engagement trends which is a healthy sign looking ahead in our opinion for Facebook (and its investors) as June results are on the docket for later this week. After a key 1Q earnings test in April which Facebook performed well while passing the regulatory hearings in both US and Europe with flying colors, now the focus for the Street is around 2Q as another “pivotal barometer” this week to gauge any fundamental damage (advertising, MAU growth) post the Cambridge situation and News Feed overhaul moves. To this point, we believe 2Q tracked to be a relatively strong quarter with modest upside to the Street’s estimates, while the investment profile for 2H18 might need to be ramped up further in light of increased security expenses. In a nutshell, overall this should be another step in the right direction for Facebook after a few months of navigating these unprecedented data concerns post the Cambridge debacle with the worries around regulatory headwinds and damage to the company’s advertising fortress a lingering cloud over the stock that has started to quickly dissipate. Based on our recent survey data, we believe less than 3% of Facebook’s revenues is potentially “at risk” for 2H18/2019 based on slower user growth and advertising softness post Cambridge, however the “considerable strength” we are picking up from the Instagram side of the house (e.g. strong advertising and user growth) should help neutralize any of this potential weakness on the core platform in our opinion. In a nutshell, so far the fundamental damage to the Facebook platform has been “very contained” in our opinion and is much better than feared which is a relief for 2Q/2H18, however this will still be a long winding road that lies ahead for Facebook and Zuckerberg to help navigate the regulatory landscape both in the US and Europe over the next 18 to 24 months. We maintain our Highly Attractive rating and $225 price target.