Mark Zuckerberg, CEO of Meta Platform, July 2021.
Kevin Dickey | Getty Images |
Yuan The first quarter results will be announced after the bell on Wednesday.
That’s what analysts expected.
- Earnings per share: $4.32, according to LSEG.
- Income: $36.16 billion according to LSEG.
- Daily Active Users (DAU): $2.12 billion, according to StreetAccount
- Monthly Active Users (MAU): 3.09 billion, according to StreetAccount
- Average Revenue Per User (ARPU): $11.75, according to StreetAccount
Meta has been a Wall Street darling since early 2023, when CEO Mark Zuckerberg told investors it would be the “year of efficiency”. The stock nearly tripled last year, only to lag Nvidia Among the S&P 500, another 40% increase is expected through 2024
Facebook’s parent company is clawing back digital advertising market share in a bleak 2022. The company is in trouble apple iOS privacy updates and macroeconomic concerns have many brands reining in spending.
Zuckerberg has led an initiative to reshape the advertising business with a focus on artificial intelligence. During the company’s last earnings call in February, finance chief Susan Lee said Meta is investing in artificial intelligence models that can accurately predict ads relevant to users, as well as tools to automate the ad creation process.
Analysts expect Meta’s revenue to rise 26% from $28.65 billion a year ago. That would mark the fastest growth rate since the third quarter of 2021, when Apple’s privacy changes began showing up on other companies’ balance sheets.
Meta benefits from a stable economy and rising costs have Chinese discount retailers like Temu and Shin pouring money into Facebook and the company’s Instagram to attract a wider audience. Baird analysts said in a note on Monday that a slowdown in Chinese advertiser spending could be a cause for concern about first-quarter results.
Still, Baird’s analysts see Meta’s continued momentum and say they have “fairly high” sentiment due to improvements in their advertiser tools and success in monetizing short-form videos.
Investors will continue to focus on the cost of met, which is at the root of the stock’s growth. Earlier last year, Zuckerberg said the company would get better at eliminating redundant projects and fighting bloat, which would help Meta become a “stronger, more agile company.”
The company will cut about 21,000 jobs in the first half of 2023. Zuckerberg said in February, the scale of the hiring was “relatively small compared to what we’ve done in the past.”
As of Dec. 31, Meta had a global workforce of 67,317 employees, according to SEC filings, down from a peak of more than 87,000 employees in 2022.
“The upside is undeniable,” Jefferies analysts wrote in a note last week. Analysts expect Meta to report better-than-expected first-quarter results and provide better-than-expected guidance for the second quarter. So far, analysts expect second-quarter revenue to rise 20% to $38.29 billion, according to LSEG.
“We continue to be encouraged by META’s ability to sustain double-digit revenue growth driven by higher engagement driven by AI investments and improved advertiser ROI and efficiency,” Jefferies analysts wrote.
The Matter Reality Labs division, which houses the hardware and software the company uses to develop the nascent metaverse, continues to bleed. Analysts expect the unit to post an operating loss of $4.31 billion in the current quarter, adding that it has lost $42 billion since the end of 2020. Segment revenue is expected to hit $512.5 million, up 51% from $339 million a year ago.
Executives will discuss the company’s results in a conference call with analysts at 5 p.m.
