Mark Zuckerberg told the world last October that he was rebranding Facebook to Meta as the company sought the metaverse.
Facebook | through Reuters
Shares of the parent company Facebook Meta jumped 19% in expanded trading on Wednesday after the company reported gains above forecasts, although earnings were disappointing.
Here are the results.
- Earnings per share: $ 2.72 versus expected $ 2.56, according to a Refinitiv survey of analysts
- Revenue: $ 27.91 billion against the expected $ 28.2 billion, according to Refinitiv
- Daily Active Users (DAU): 1.96 billion versus expected 1.95 billion, according to StreetAccount
- Monthly Active Users (MAUs): 2.94 billion versus expected 2.97 billion, according to StreetAccount
- Average Consumer Revenue (ARPU): $ 9.54 versus expected $ 9.50, according to StreetAccount
Meta updated investors for the first time since the brutal fourth-quarter earnings report in February, which fell shares by 26%, its worst day to date. Daily active consumers, which fell for the first time in the fourth quarter, returned just under 1.93 billion to 1.96 billion.
The rally after working hours on Wednesday still leaves the shares down for the year. By the end of the year, the shares had lost almost half of their value in 2022.
In addition to its profits, Facebook also exceeded average consumer expectations. But almost every other key indicator was missed, including monthly active users.
Revenue rose 7% during the quarter, for the first time in Facebook’s 10-year history as a public company that growth is in single digits. Analysts expected growth of 7.8%.
For the second quarter, Facebook forecast revenue of $ 28 billion to $ 30 billion, lagging behind the $ 30.6 billion estimate of analysts polled by Refinitiv. The company said in a statement that the guidelines reflected ongoing trends from the first quarter, including mild revenue growth that “coincided with the war in Ukraine.”
Facebook changed its name to Meta in October, reflecting CEO Mark Zuckerberg’s efforts to push the company into a future that includes work, play and learning in the virtual world.
The family of Facebook apps, including the main app, Instagram and WhatsApp, accounted for 97.5% of revenue for the quarter. The remaining $ 695 million comes from Reality Labs, the part of the company that is trying to build products for the metaverse.
In the application business family, net profit fell 13 percent from a year earlier to $ 11.48 billion. Reality Labs lost $ 2.96 billion during the period, compared with a loss of $ 1.83 billion in the first quarter of 2021.
Facebook has lowered its total spending targets for 2022 to between $ 87 billion and $ 92 billion, from an earlier estimate of $ 90 billion to $ 95 billion. Most of this cost growth is expected to be driven by the application family segment, followed by Reality Labs.
Other social media companies have similarly identified macroeconomic factors that affect their advertising revenue. Snap CEO Evan Spiegel called the first quarter “more challenging than we expected.” The company said some advertisers had stopped advertising campaigns following Russia’s invasion of Ukraine in February. YouTube, owned by Google, rose just 14 percent in the first quarter, well below analysts’ expectations of 25 percent.
Digital ads may also be affected by inflation and recent changes in Apple’s privacy in iPhone operating systems, which Meta CFO Dave Venner previously predicted would generate $ 10 billion in revenue in 2022, although he acknowledged that this figure is approximate.
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