Mark Zuckerberg, CEO of Meta, testifies during the Senate Judiciary Committee hearing titled “Big Tech and the Online Child Sexual Exploitation Crisis,” in Dirksen building on Wednesday, January 31, 2024.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
Meta shares plunged in extended trading on Wednesday after the company issued a light forecast, overshadowing better-than-expected first-quarter results.
Here are the key numbers:
- Earnings per share: $4.71 per share vs. $4.32 per share expected by LSEG
- Revenue: $36.46 billion vs. $36.16 billion expected by LSEG
Revenue increased 27% from $28.65 billion in the same period a year earlier, the fastest rate of expansion for any quarter since 2021. Net income more than doubled to $12.37 billion, or $4.71 per share, from $5.71 billion, or $2.20 per share, a year ago.
One reason for the pop in net income is that, while revenue growth accelerated, sales and marketing costs dropped 16% in the quarter from a year earlier.
Meta said it expects revenue in the second quarter of $36.5 billion to $39 billion. The midpoint of the range, $37.75 billion, would represent 18% year-over-year growth and is below analysts’ average estimate of $38.3 billion.
The company no longer reports daily active users and monthly active users. It now gives a figure for what it calls “family daily active people.” That number was 3.24 billion for March 2024, a 7% increase from a year earlier.
Meta has raised investor expectations due to its improved financial performance in recent quarters, leaving little room for error. The stock is up about 40% this year after almost tripling last year. In February 2023, CEO Mark Zuckerberg told investors it would be the “year of efficiency,” which initiated the rally.
At the time, Zuckerberg said the company would be better at eliminating unnecessary projects and cracking down on bloat, which would help Meta become a “stronger and more nimble organization.” The company cut about 21,000 jobs in the first half of 2023, and Zuckerberg said in February of this year that hiring will be “relatively minimal compared to what we would have done historically.”
Headcount declined by 10% in the first quarter from a year earlier to 69,329.
Capital expenditures for 2024 will be $35 billion to $40 billion, an increase from a prior forecast of $30 billion to $37 billion “as we continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap,” Meta said.
Meta’s Reality Labs unit, which houses the company’s hardware and software for development of the nascent metaverse, continues to bleed cash. Reality Labs reported sales of $440 million for the quarter and $3.85 billion in losses.
Analysts expected the division to show an operating loss of $4.31 billion for the quarter, on top of the $42 billion it’s lost since the end of 2020.
Executives will discuss the company’s results on a call with analysts at 5 p.m. ET.