Meta beats Q2 Earnings Expectations

Meta’s Q2 earnings are out - and they’re good. The earnings showcased a robust resurgence in the digital advertising market.

The results exceeded analysts' expectations, with earnings at $2.98 per share against an anticipated $2.91. The company's revenue was $32 billion, outperforming the predicted $31.12 billion.

Meta also reported growth in daily active users (DAUs) and monthly active users (MAUs), which came in at 2.06 billion and 3.03 billion, respectively, exceeding market projections. Average Revenue per User (ARPU) reached $10.63, surpassing the forecasted $10.22.

Year-over-year, Meta's revenue grew by 11%, indicating the first time the company has observed double-digit growth since the end of 2021. This growth comes despite significant obstacles the company faced last year, including privacy changes to Apple's iOS that hampered ad targeting.

As a result of this rebound, Meta's shares have increased by a remarkable 159% this year. Furthermore, net income rose to $7.79 billion from $6.69 billion the previous year.

Despite the positive results, there were increased expenses, with total costs for the second quarter rising by 10% to $22.61 billion. However, in a positive move, Meta reduced its capital expenditure forecast for 2023, pointing to successful cost-saving efforts.

Zuck had previously deemed 2023 “The Year of Efficiency”, which apparently only referred to headcount - not R&D.

As part of Meta’s cost-savings, Meta's total employee count dropped by 14% year-on-year to 71,469.

That’s while Meta's Reality Labs division, responsible for developing virtual and augmented reality technologies, suffered a substantial operating loss of $3.7 billion, despite sales of $276 million for the quarter.

This adds to a total loss of $21.3 billion since the start of 2022.

Despite these significant losses, Meta indicated its commitment to continuing its substantial investments in the development and scaling of its metaverse ecosystem.

This commitment is demonstrated by the announcement of the VR subscription service, Meta Quest+, and the reveal of the upcoming Quest 3 headset in June.

Got feedback? Follow the writer on Twitter @frank_locascio and send a message.

Join our Facebook group to connect with the community.

The BRRR is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.