Mark Zuckerberg, chief executive officer of Meta Platforms Inc., left, arrives at federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022.
David Paul Morris | Bloomberg | Getty Images
Meta’s revenue climbed 11% in the second quarter as advertising rebounded and the company issued an uplifting sales forecast for the third quarter. The stock rose 5% in extended trading.
Here are the results.
- Earnings: $2.98 per share. That may not compare with the $2.91 per share expected by Refinitiv.
- Revenue: $32.0 billion. That may not compare with the $31.12 billion expected by Refinitiv.
Wall Street is also watching several other numbers on the report:
- Daily Active Users (DAUs): 2.06 billion vs 2.04 billion expected, according to StreetAccount.
- Monthly Active Users (MAUs): 3.03 billion vs 3 billion expected, according to StreetAccount.
- Average Revenue per User (ARPU): $10.63 vs $10.22 expected, according to StreetAccount.
The company said revenue in the third quarter will be $32 billion to $34.5 billion. Analysts polled before the report were expecting third-quarter sales of $31.3 billion, according to Refinitiv. That suggests growth of at least 15% from a year earlier.
It’s the first time Meta has reported double-digit growth since the fourth quarter of 2021. Prior to the first quarter, revenue had declined in three straight periods as the company reckoned with a sputtering economy and Apple’s iOS privacy change, which limited ad targeting capabilities.
Investors have been riding the Meta wave in 2023, expecting a rebound in the ad market and better profitability following the company’s mass layoffs. Prior to Wednesday’s close, the stock was up 159% this year, compared to the 19% advance in the S&P 500. Meta shares lost about two-thirds of their value last year.
“We had a good quarter,” Meta CEO Mark Zuckerberg said in a statement. “We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall.”
Zuckerberg’s focus on efficiency appears to be working. The company is now forecasting capital expenditures for 2023 of $27 billion to $30 billion, down from a prior estimate of $30 billion to $33 billion.”The reduced forecast is due to both cost savings, particularly on non-AI servers, as well as shifts in capital expenditures into 2024 from delays in projects and equipment deliveries rather than a reduction in overall investment plans,” the company said.
Meta said that its total costs and expenses were $22.61 billion in the second quarter, which is an increase of 10% year from the previous year during the same period.
Total headcount for the social networking titan declined 14% year-over-year to 71,469, with the company adding that “Approximately half of the employees impacted by the 2023 layoffs are included in our reported headcount as of June 30, 2023.”
Zuckerberg has been pushing for Meta to become more efficient, instituting a cost-savings plan that resulted in layoffs effecting about 21,000 employees.
Meta’s Reality Labs unit, tasked with developing the metaverse, brought in $276 million in sales during the second quarter while recording a loss of $3.7 billion. Meta said that those losses will continue to “increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem.”
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