StockOpine's avatar
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$META earnings highlights
  • $META first y-on-y decline in quarterly revenue since it went public with a significant drop in operating margin (from 43% to 29%).

  • DAP, MAP, DAU & MAU metrics marginally increased.

  • Ad impressions ⬆️ by 15% but price per ad ⬇️ by 14%.

  • Q3 2022 total revenue expected to be in the range of $26-28.5 billion due to continuation of the weak advertising demand environment.

  • Management also expects a 6% headwind from FX in Q3.
Ben's avatar
Correction. “Continuing weak advertising demand environment” ** on Facebook platforms
StockOpine's avatar
@rpinvestments In our opinion, advertising spending will be weakened for other players as well due to macro concerns. $GOOGL also highlighted pullbacks in advertiser spending in Youtube and Network. We believe $META’s impact will be more profound as Reels continues to eat time from feed and stories.
Nikki Dunn, CFP®'s avatar
How are you looking at the fact that they're going against a tough 2021 comp? I feel like when you look at that, the revenue generated is really not all that bad. Margin is down b/c of R&D (metaverse bet), but, at least they're talking about slowing those expenses a bit now.
Ben's avatar
@shetalksfinance all advertisers are going against tough 2021 comps. Google grew at 40% in 2021. But still managed mid-teen growth yoy
Joshua Simka's avatar
@shetalksfinance Did they lend any color on the call on what exactly all that R&D spending is...for? Yes, I know it's for Reality Labs. But...a $2.8B loss on $452M in sales?
StockOpine's avatar
@shetalksfinance We agree that 2021 is a tough comp in terms of revenue due to the pandemic and the IDFA changes last year. Also as reels gain share over feed and stories revenue is adversely affected.

“One near term challenge is the growth of short-form video. Reels doesn't yet monetize at the same rate as feed or stories, so in the near term, the faster that Reels grows, the more revenue that actually displaces from higher-monetizing surfaces.”
Dissecting the Markets's avatar
It must be a great time to be buying social media ads
StockOpine's avatar
@dissectmarkets Ultimately advertisers would go where they get the highest ROI. We think social platforms can offer that.
Reasonable Yield's avatar
That FX headwind is amazing.