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Meta Platforms:Quarterly Results/2023 Q2: Difference between revisions
Meta Platforms:Quarterly Results/2023 Q2 (view source)
Revision as of 14:13, 10 August 2023
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== Earnings Call Summary == | == Earnings Call Summary == | ||
Here is a summary of the earnings call<ref>https://s21.q4cdn.com/399680738/files/doc_financials/2023/q2/META-Q2-2023-Follow-Up-Call-Transcript.pdf</ref>; | |||
=== Revenue, Capex, Outlook === | === Revenue, Capex, Outlook === | ||
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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). | 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). | '''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). | 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). | ||
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* 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). | * 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). | * '''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 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). | * '''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). | * 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). | * 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 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). | * 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). | * '''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). | * 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). | ||
* '''They continue to expect Reels monetization to develop more slowly than Feed and Stories into the foreseable future because users scroll more slowly on Reels'''(MR). | |||
* Open sourcing their Llama 2 model will likely result in more innovations, more security and safety features, more efficiency and skilled talent(Q&A). | |||
* Partnered with Microsoft (regarding Llama) because they have a public cloud offering, which they don't plan on building(Q&A). | |||
* Their partnership with Microsoft and more companies in future will generate more revenue for Meta though not much in the near term(Q&A). | |||
* CFO Susan Li said that Llama is not going to result in a seperate topline enterprise revenue(Q&A) | |||
* Zuckerberg said the scale of adoption of Llama spurred them to develop Llama 2(Q&A). | |||
=== Advertising === | === 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). | * 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). | * '''Ad impressions increased by 34% while price per ad declined by 16%''' (MR). | ||
* Growth in impressions was mostly in lower monetizing surfaces regions(MR). | * Growth in impressions was mostly in lower monetizing surfaces regions(MR). | ||
* Daily Click-to-Whatsapp ads revenue grew 80% y/y(MR). | * '''Daily Click-to-Whatsapp ads revenue grew 80% y/y'''(MR). | ||
* Have gotten positive feedback from Advantage+ users(Q&A). | |||
=== Regulatory Environment === | === Regulatory Environment === | ||
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* The new EU-US trans-atlantic data transfer agreement was good news to them(MR). | * 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). | * They continue to see increasing legal and regulatory headwinds in the EU and the US that could impact its financial results(MR). | ||
=== Reality Labs === | |||
* Quest 3 to come up this fall at connect event(MR). | |||
* Quest 3 will have 2x graphics and will be 40% thiner(MR). | |||
=== Threads === | |||
* Zuckerberg said they are seeing more people coming back than he had expected(MR). | |||
* They are now focused on retention and improving the basic features and once that is done, they will grow the community to scale they think is possible and start monetizing it(MR). | |||
* Zuckerberg said Threads was built by a small team on a tight budget(MR). | |||
== Management Guidance and Analysts Expectations == | == Management Guidance and Analysts Expectations == | ||