Mark Zuckerberg, CEO of Meta Platforms Inc., arrived at federal court in San Jose, California, on Tuesday, December 20, 2022.
David Paul Morris | Bloomberg | Getty Images
Meta exceeded analysts’ expectations with its earnings and revenue for the second quarter and provided a positive outlook for the current period, indicating a recovery in the digital advertising market.
The company’s stock rose approximately 5% in after-hours trading.
Here are the key results:
- Earnings: $2.98 per share, surpassing the expected $2.91 per share by Refinitiv.
- Revenue: $32 billion, beating the expected $31.12 billion by Refinitiv.
Wall Street also paid attention to the following numbers in the report:
- Daily Active Users (DAUs): 2.06 billion, surpassing the expected 2.04 billion by StreetAccount.
- Monthly Active Users (MAUs): 3.03 billion, exceeding the expected 3 billion by StreetAccount.
- Average Revenue per User (ARPU): $10.63, surpassing the expected $10.22 by StreetAccount.
The company experienced 11% year-over-year revenue growth for the first time since 2021. Prior to the first quarter, revenue had declined for three consecutive periods due to economic challenges and Apple’s iOS privacy change, which limited ad targeting capabilities.
Meta expects its third-quarter revenue to range between $32 billion and $34.5 billion, higher than analysts’ pre-report estimate of $31.3 billion, suggesting at least 15% year-over-year growth.
Investors have been optimistic about Meta’s performance in 2023, anticipating a recovery in the ad market and improved profitability after the company’s extensive layoffs. The stock has surged 159% this year, compared to the S&P 500’s 19% growth. Meta shares experienced a significant decline in value last year.
Meta CEO Mark Zuckerberg expressed satisfaction with the quarter’s results, stating, “We had a good quarter. We continue to see strong engagement across our apps and we have an exciting roadmap ahead with Llama 2, Threads, Reels, new AI products, and the launch of Quest 3 this fall.”
Net income rose to $7.79 billion, or $2.98 per share, compared to $6.69 billion, or $2.46 per share, in the same period last year.
The company’s total costs and expenses for the second quarter were $22.61 billion, a 10% increase from the previous year.
Zuckerberg has implemented cost-saving measures to enhance Meta’s efficiency, resulting in job cuts. This plan has proven successful.
Meta now anticipates capital expenditures for 2023 to be between $27 billion and $30 billion, lower than the previous estimate of $30 billion to $33 billion, thanks to cost savings and project delays.
However, expenses are expected to rise in 2024 due to investments in data centers and AI.
Total headcount declined by 14% to 71,469 compared to the previous year. Meta clarified that approximately half of the employees affected by the 2023 layoffs are still part of the reported headcount as of June 30, 2023.
Meta plans to allocate more resources to payroll expenses as the company shifts its workforce composition towards higher-cost technical roles, potentially resulting in increased salaries for some employees.
Meta’s Reality Labs unit, responsible for developing the metaverse, generated $276 million in sales during the second quarter, but reported a loss of $3.7 billion. The company expects these losses to continue to grow due to ongoing product development efforts in augmented reality/virtual reality.
Executives will discuss the results on an analyst call starting at 5 p.m. ET.
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