Real Money’s Eric Jhonsa covers Meta’s third-quarter earnings report and conference call with management.
Meta’s stock is down 49% year-to-date, as investors worry about the impact of TikTok, iOS policy changes and much else on the social media giant’s top and bottom lines.
Bulls are hoping that all this bad news has been more than priced in ahead of Meta’s latest earnings report. Among analysts polled by FactSet, the consensus is for Mark Zuckerberg’s company to post first-quarter revenue of $28.28 billion (up 8% annually) and GAAP EPS of $2.56 (down 23%).
Meta typically shares quarterly sales guidance and full-year spending guidance in its earnings report. The company’s second-quarter revenue consensus is currently at $30.7 billion (up 6%).
Eric Jhonsa, Real Money’s tech columnist, will be live-blogging Meta’s earnings report, which is expected after the bell, along with an earnings call scheduled for 5:00 P.M. Eastern Time. (Please refresh your browser for updates.)
4:47 PM ET: Better-than-feared numbers from Meta, Pinterest and PayPal are giving a boost to other Internet stocks in after-hours trading. Amazon is up 1.9% AH, Shopify is up 2.1%, and Snap is up 5.4%.
4:43 PM ET: Meta’s revised full-year spending guidance of $87B-$92B implies that costs/expenses will rise 22%-29% in 2022 relative to 2021. That suggests spending growth will cool off some later in the year (markets seem pleased by that), albeit while still likely outpacing revenue growth.
4:40 PM ET: Whereas revenue grew 7% Y/Y in Q1, Meta’s GAAP costs and expenses rose 31% to $19.38B.
A 48% increase in R&D spend to $7.71B was the biggest contributor, followed by a 17% increase in cost of revenue (boosted by depreciation expenses related to Meta’s heavy capex) to $6.01B.
4:34 PM ET: As expected, the Reality Labs segment remained a major drag on Meta’s bottom line: It posted a $2.96B Q1 operating loss, up from $1.83B a year earlier though a little better than Q4 2021’s $3.3B.
Facebook’s “Family of Apps” operations, by comparison, generated $11.48B in operating income. That’s down from $13.21B a year ago (heavy capex and R&D investments are near-term headwinds).
4:29 PM ET: Meta’s ad revenue rose 6% Y/Y to $27B, missing a $27.5B consensus.
Reality Labs revenue, which mostly consists of VR headset sales, rose 30% to $695M, beating a $683M consensus. “Other” revenue, which includes things like payments fees, rose 9% to $215M.
4:24 PM ET: Here’s Meta’s Q1 report. And here’s its Q1 slide deck.
4:20 PM ET: Giving EPS a boost: Meta spent $9.39B on buybacks in Q1. That follows $19.2B worth of buyback in Q4 (when the stock was much higher). The company still has $29.4B left on its buyback authorization.
4:19 PM ET: Facebook DAUs (they cover just the core Facebook app and Messenger) rose by 30M Q/Q and 80M Y/Y to 1.96B, slightly topping a 1.95B consensus.
Facebook MAUs rose by 30M Q/Q and 60M Y/Y to 2.94B, slightly missing a 2.96B consensus.
4:16 PM ET: Daily active users for Meta’s app family rose by 50M Q/Q and 150M Y/Y to 2.87B. Monthly active users rose by 50M Q/Q and 190M Y/Y to 3.64B.
4:12 PM ET: Meta has added to its after-hours gains: Shares are now up 12.7% to $197.22.
4:11 PM ET: Regarding the Q2 sales guidance, Meta says it “reflects a continuation of the trends impacting revenue growth in the first quarter, including softness in the back half of the first quarter that coincided with the war in Ukraine.”
The guidance also assumes a 3-point revenue headwind from currency swings (i.e., a strong dollar).
4:09 PM ET: Meta has cut its full-year cost/expense guidance to $87B-$92B from a prior $90B-$95B. The full-year capex guide remains at $29B-$34B.
4:08 PM ET: As previously noted, pre-earnings expectations were pretty low. For now, markets have declared Meta’s numbers to be better than feared.
4:07 PM ET: Shares are up 8.6% after-hours.
4:06 PM ET: Meta guides for Q2 revenue of $28B-$30B, below a $30.7B consensus.
4:05 PM ET: Results are out. Q1 revenue of $27.91B misses a $28.28B consensus. EPS of $2.72 beats a $2.56 consensus.
4:00 PM ET: Meta closed down 3.3%. The Q1 report should be out any minute.
3:58 PM ET: Shares have dropped 2.8% in Wednesday trading ahead of Meta’s report, on a day when the Nasdaq is close to flat. The decline comes after Alphabet beat Q1 sales estimates yesterday, but also reported softer-than-expected YouTube ad sales.
3:55 PM ET: With Meta’s stock having plunged this year to levels it first reached in 2017, it’s safe to say that pre-earnings expectations are fairly low.
3:53 PM ET: The FactSet consensus is for Meta to report Q1 revenue of $28.28B and GAAP EPS of $2.56. For Q2, the revenue consensus is at $30.7 billion.
3:51 PM ET: Hi, this is Eric Jhonsa. I’ll be live-blogging Meta’s earnings report and call.
