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Meta Platforms:Quarterly Results/2023 Q2: Difference between revisions
Meta Platforms:Quarterly Results/2023 Q2 (view source)
Revision as of 13:49, 10 August 2023
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== Earnings Call Summary == | == Earnings Call Summary == | ||
=== Revenue, Capex, Outlook === | |||
The reasons for revenue acceleration in Q2 are(Q&A); | |||
* Lapping of a weak quarter due to Ukraine war and suspension of surfaces in Russia. | |||
* Increase supply and improvements of ad performance, including improved Reels monetization. | |||
* Lower FX headwinds in the quarter. | |||
They expect capex in 2024 to be higher in 2023 due to increase in investments for data centres and servers as well as on non-AI workloads(Q&A). | |||
Expect Q3 revenue to grow by 20% y/y at the midpoint because Q3 2022 declined by 4.5% y/y and have seen demand stabilize this year. Also, they expect a 3% fx tailwind compared to a 1% fx headwind in Q3 2022(Q&A). | |||
In Q4, they expect FX tailwind to be much more than they are expecting in Q3. Also, there will be lapping of a weak quarter in Q4(Q&A). | |||
=== Year of Efficiency === | |||
* Zuckerberg said he will continue running the company as lean as possible even though financials have improved(MR). | |||
* They will continue hiring in key areas though budgetted headcount growth is low(MR). | |||
* Many teams laid off people in order to hire new skills and that will spill over to 2024(MR). | |||
* Don't have correct budget figure for AI capex(until 2024) since they don't know how their AI products will grow(MR). | |||
=== AI Products === | |||
* Contents from accounts which you don't follow, which are recommended by its AI, is now the fastest growing content category in Facebook Feeds(MR). | |||
* AI recommended content have driven a 7% increase in overall time spent on the platform since their launch(MR). | |||
* Reels plays have exceeded 200 billion per day in Facebook and Instagram(MR). | |||
* Reels annual revenue run-rate crossed $10 billion, up from $3 billion last fall(MR). | |||
* Three-quarter of Meta Platforms advertisers now use Reels ads(MR). | |||
* Almost all Meta Platforms advertisers are using at least one of its AI-driven products(MR). | |||
* Meta launched Meta Lattice, an architecture that learns to predict an ad's performance using different data sets and optimization goals(MR). | |||
* Meta also introduced AI Sandbox, a testing play ground for AI tools such as automatic text variation, background generation and image outcropping(MR). | |||
* Even though earlier, paid messaging is showing great adoption as the number of businesses using it doubled year-over-year(MR). | |||
* Zuckerberg said there are three basic features that they plan on building with generative AI and they include AI Agents, AI products to make advertising seamless and features to improve their internal efficiencies(Q&A). | |||
=== Advertising === | |||
* Online commerce vertical contributed the largest y/y growth to revenue due to strong spend by Chinese advertisers trying to reach new markets. It was followed by entertainment and media and CPG(MR). | |||
* Ad impressions increased by 34% while price per ad declined by 16% (MR). | |||
* Growth in impressions was mostly in lower monetizing surfaces regions(MR). | |||
* Daily Click-to-Whatsapp ads revenue grew 80% y/y(MR). | |||
=== Regulatory Environment === | |||
* The new EU-US trans-atlantic data transfer agreement was good news to them(MR). | |||
* They continue to see increasing legal and regulatory headwinds in the EU and the US that could impact its financial results(MR). | |||
== Management Guidance and Analysts Expectations == | == Management Guidance and Analysts Expectations == | ||