Big-tech companies are extending the wave of publishing surprisingly good quarterly results. Yesterday, Meta Platforms (META.US) boasted its results, managing to post a surprising increase in revenue, raising its full-year guidance and announcing that it will further strengthen its commitment to developing new AI solutions. All of this saw the company’s shares rise more than 12% in the market after the close of the trading session on Wall Street. Let’s look at the key details of the report presented:
Key result positions:
- Earnings per share (EPS): 2.20 USD vs. 2.03 USD expected
- Revenue: 28.65 billion USD vs.27.65 billion USD expected
- Daily active users (DAU): 2.04 billion vs 2.01 billion expected
- Monthly active users (MAU): 2.99 billion vs. 2.99 billion expected
- Average revenue per user (ARPU): 9.62 USD vs 9.30 USD expected
- Reels video monetization (Facebook and Instagram): +30% Facebook; +40% Instagram
- Advertising impressions up 26%; previously assumed up 14%
- Operating cost forecast lowered by a further 3 billion USD for 2023 due to 25% headcount reduction
- Revenue forecast for Q2 2023 raised to a range between 29.5 billion USD and 32 billion USD; previously it was 29.5 billion USD
The surprisingly strong performance of advertising revenue will enable the company to allocate free capital to more innovative ventures, Zuckerberg comments. A lot is expected to happen, especially in the realm of AI, Zuckerberg added during the conference call, with artificial intelligence expected to have a significant impact on every Meta Platforms-branded app and device. Source: Bloomberg
Regarding the employee situation, Meta plans to resume hiring after the layoffs end next month. The company expects to add employees particularly in the Reality Labs, advertising infrastructure and artificial intelligence sectors.
The company has been successful in its overall cost-cutting program, further encouraging investment in new ideas. The rest of the year will bring a continuation of this trend (expenditure forecasts have been reduced by 2 billion USD to 90 billion USD). Source: Meta
The good results did not escape investment bank analysts, either, who significantly raised their target prices for Meta’s shares. Morgan Stanley raised its recommendation to 300 USD per share and JP Morgan analysts valued the company’s shares at 305 USD per share. Source Bloomberg
Meta Platforms (META.US) share chart, W1 interval. Yesterday’s trading after the close of the Wall Street session saw the share price rise to the April 2022 resistance area, which will now be the main control level defining further sentiment on the shares of this company. Source: xStation 5