$Meta Platforms(META)$ in stark contrast to Tesla, the first-quarter performance better-than-expected, but the company provided a pessimistic outlook. During the earnings call, Zuckerberg focused more on the prospects of AI, signaling continued infrastructure investments in artificial intelligence, with expectations for further increases next year.
Earnings per share (EPS): $4.71per share vs. $4.32 per share expected
Revenue: $36.46 billion vs. $36.16 billion expected
Q1 revenue and profits accelerated, with improved monetization metrics
Meta's first-quarter revenue grew by 27% compared to the same period last year, marking the fastest rate of expansion for any quarter since 2021. Operating profit also saw a significant year-over-year increase, rising by 91% to $13.82 billion, with the operating profit margin increasing from 25% to 38% compared to the same period last year.
Net profit surged by 117% from $5.71 billion in the same period last year to $12.37 billion. The primary drivers that while revenue growth accelerated, sales and marketing costs dropped 16% from the year-earlier period.
Meta's family daily active people (DAP) was 3.24 billion for March 2024, a 7% increase from a year earlier. Ad impressions for family of APPs grew by 20% year-over-year, while the average price per ad increased by 6%. The average revenue per user (ARPP) for the quarter stood at $11.20.
Guidance weaker than expected, annual spending plans exceed expectations
For the second quarter, Meta expects revenue to range between $36.5 billion and $39 billion, with a median value of $37.75 billion, representing an 18% year-over-year increase, lower than analysts' average expectations of $38.3 billion (20% year-over-year growth).
Due to rising infrastructure and legal costs, Meta anticipates total spending for the full year 2024 to be between $96 billion and $99 billion, updated from the previous forecast of $94 billion to $99 billion. The company expects a significant year-over-year increase in operating losses for Reality Labs.
Capital expenditures for 2024, another closely watched metric, are guided to range between $35 billion and $40 billion, surpassing market expectations of $30 billion to $37 billion.
Overall, META's quarterly financial data is impressive, but similar to Netflix last week, the weaker guidance led to a significant post-earnings decline. Prior to the earnings report, META's stock had risen by nearly 40% this year, reaching a historical high in April. This contrasts with Tesla's year-to-date downtrend, making the post-earnings rebound a stark reversal.
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