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Meta Platforms:Quarterly Results/2024 Q2: Difference between revisions
Meta Platforms:Quarterly Results/2024 Q2 (view source)
Revision as of 13:00, 1 August 2024
, 1 August 2024→Earnings Call Summary
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* Zuckerberg said that in the past open compute was able to save them billions. | * Zuckerberg said that in the past open compute was able to save them billions. | ||
* '''Zuckerberg pointed out that Llama 4 will use 10x more compute than Llama 3, adding that he rather invest now than wait until they are too late. "The amount of compute needed to train Llama 4 will likely be almost 10 times more than what we used to train Llama 3, and future models will continue to grow beyond that. It's hard to predict how this trend -- how this will trend multiple generations out into the future. But at this point, I'd rather risk building capacity before it is needed rather than too late, given the long lead times for spinning up new inference projects."''' | * '''Zuckerberg pointed out that Llama 4 will use 10x more compute than Llama 3, adding that he rather invest now than wait until they are too late. "The amount of compute needed to train Llama 4 will likely be almost 10 times more than what we used to train Llama 3, and future models will continue to grow beyond that. It's hard to predict how this trend -- how this will trend multiple generations out into the future. But at this point, I'd rather risk building capacity before it is needed rather than too late, given the long lead times for spinning up new inference projects."''' | ||
* Zuckerberg said they will continue being committed to operational efficiency across the company as they scale AI investments. | |||
* CFO Susan Li said people have used Meta AI for billions of queries since launching it. | |||
* Li said they believe that over time Gen AI will play a growing role with how businesses engage with customers. '''"Looking forward, we believe Generative AI will play a growing role in how businesses market and engage with customers at scale. We expect this technology will continue to make it easier for businesses to develop customized and diverse ad creatives. We've seen promising early results since introducing our first Generative AI ad features, image expansion, background generation, and text generation with more than 1 million advertisers using at least one of these solutions in the past month."''' | |||
* Susan Li said they will build their infrastructure with flexibility in mind (Q&A). '''"We are continuing to build our AI infrastructure with fungibility in mind, so that we can flex capacity where we think it will be put to best use. The infrastructure that we build for gen AI training can also be used for Gen AI inference. We can also use it for ranking and recommendations by making certain modifications like adding general compute and storage. And we are also employing a strategy of staging our data center sites, at various phases of development, which allows us to flex up to meet more demand and less lead time if needed while limiting how much spend we are committing to in the outer years."''' | |||
* Zuckerberg said it's still early to see results on Meta AI. | |||
* Li said they don't expect GenAI to be a meaningful driver of revenue in 2024. | |||
=== Q1 Results and future outlook === | |||
* Online commercial vertical was the biggest contributor to y/y ad revenue growth in Q2 followed by gaming and entertainment and media. | |||
* Ad revenue growth was strongest in Rest of World and Europe at 33% and 26% respectively on a user geography basis. Asia Pacific and North America grew at 20% and 17% respectively. | |||
* '''On an advertiser geography basis, total revenue growth was strongest in Asia Pacific at 28%, a deceleration from 41% in Q1 due to lapping of stronger-demand from China-based advertisers.''' | |||
* Ad impressions grew by 10% in Q2 driven mostly by Asia Pacific and rest of world. | |||
* Average price per ad rose by 10% in Q2 driven by increase advertiser demand as a result of improved ad performance offset by improved impression especially from lower monetizing regions and surfaces. | |||
* Family of Apps other revenue rose 73% y/y driven mostly by business messaging revenue growth from WhatsApp Business. | |||
* Instagram Reels engagement continues to grow as they make enhancements to their recommendations system, CFO Susan Li said. | |||
* Li said they are increasingly becoming better at determining the best ads to show and when to show, hence enabling them to drive revenue conversions without growing the number of ad loads. | |||
* Li highlighted a study conducted this year that showed 22% higher-return on ad spend by adopting Advantage+ Shopping campaigns. | |||
* '''Li said their investments on AI are informed by returns they have seen or expect to achieve across the platforms. "Our ongoing investment in core AI capacity is informed by the strong returns we've seen and expect to deliver in the future, as we advance the relevance of recommended content and ads on our platform. While we expect the returns from Generative AI to come in over a longer period of time, we’re mapping these investments against the significant monetization opportunities that we expect to be unlocked across customized ad creative, business messaging, a leading AI assistant and organic content generation."''' | |||
* '''Susan Li said ad market continues to be healthy and that they will be lapping strong comps in Q3 (Q&A). "We are continuing to see healthy global advertising demand...We do expect year-over-year growth to slow in Q3, as we are lapping strong growth from China-based advertisers, as well as strong Reels impression growth from a year ago. And we also expect modestly larger FX headwinds in Q3 based on current rates."''' | |||
* '''Li said the expect broad-based strength seen in Q2 to develop again in Q3. " And we saw basically in Q2 where revenue grew 22% that there was broad-based strength across regions and verticals including particular strength among smaller advertisers, and we expect that generally to continue into Q3."''' | |||
=== Family of Apps === | === Family of Apps === | ||
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* Growth in U.S has been a bright spot. Efforts that they started a few years ago on focusing their apps more on the 18 to 29 year olds are driving good results. | * Growth in U.S has been a bright spot. Efforts that they started a few years ago on focusing their apps more on the 18 to 29 year olds are driving good results. | ||
* '''Threads is now about to hit 200 million monthly actives'''. | * '''Threads is now about to hit 200 million monthly actives'''. | ||
* WhatsApp now serves more than 100 million monthly actives in the U.S.<br /> | * WhatsApp now serves more than 100 million monthly actives in the U.S. | ||
* Zuckerberg signaled that they will not start monetizing Threads until it hits a billion users (Q&A). " Threads, I think it is another example of something that it got off to about as good of a start of any app that I can think of. I think, it was the fastest growing app to 100 million people. And it is a good reminder that even when you have that start, the path from there to 1 billion people using an app is still multiple years. And that's our product cycle... So I think that's something that our investors and folks thinking about analyzing the business, if needed to always grapple with, is all these new products, we ship them and then there is a multiyear time horizon between scaling them and then scaling them into not just consumer experiences but very large businesses." | |||
=== Metaverse === | |||
* Metaverse remains their other long-term focus, Zuckerberg said. "Reality Labs remains our other long-term initiative that we continue to invest meaningfully in," CFO Susan Li said. | |||
* '''Zuckerberg said Ray-Ban Meta Glasses continue to be a bigger hit sooner than expected, thanks in part to AI. That demand is still outpacing their supply.''' | |||
* Quest 3 sales are also exceeding Meta's expectations. | |||
* <br /> | |||
== Management expectations and analysts estimates == | == Management expectations and analysts estimates == | ||