Despite a slowdown in growth, Meta stock soars

Facebook parent company Meta today released its Q1 22 earnings results, and ad impressions delivered across its Family of Apps increased by 15% year-over-year and the average price per ad decreased by 8% year-over-year.

The company’s reported total revenue rose 7% to US$27.91 billion (A$39.19 billion) in the first quarter, the bulk of it coming from ad sales.

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Meta contrasted sharply with Alphabet, which yesterday reported disappointing earnings, with profit below analysts’ expectations. Meta’s revenue growth slowed as well, but the company’s increase in daily active users may have mitigated this.

Daily active Facebook users surpassed analysts’ forecasts as well. As of March 2022, Facebook had 1.96 billion daily active users on average, up 4% year over year.

Meta’s stock gained more than 17% in extended trading.

“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” said Mark Zuckerberg, Meta founder and CEO. “More people use our services today than ever before, and I’m proud of how our products are serving people around the world.”

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Capital expenditures, including principal payments on finance leases, were US$5.55 billion (A$7.79 billion) for the first quarter of 2022.

Headcount was 77,805 as of March 31, 2022, an increase of 28% year-over-year.

“We expect second quarter 2022 total revenue to be in the range of US$28-30 billion (A$39-42 billion). This outlook 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. Our guidance assumes foreign currency will be approximately a 3% headwind to year-over-year growth in the second quarter, based on current exchange rates,” said META CFO David Wehner in a release.

“In addition, as noted on previous calls, we continue to monitor developments regarding the viability of transatlantic data transfers and their potential impact on our European operations, and we are pleased with the progress on a political agreement.

“We expect 2022 total expenses to be in the range of US$87-92 billion (A$122-129 billion), lowered from our prior outlook of US$90-95 billion (A$126-133 billion). We expect 2022 expense growth to be driven primarily by the Family of Apps segment, followed by Reality Labs,” Wehner added.

Meta Platforms Inc (Facebook) currently trades at US$174.95 (A$245.68) as of 28 April 2022, and has a market capitalisation of US$474.907 billion (A$666.91 billion).


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