$FB reported earnings yesterday and popped 15% as of this writing. I believe the jump was warranted on the increased user engagement. The market is confident that the macro issues will eventually subside, but were reassured about competition.
Meta’s family DAP increased 6% YoY. Even more reassuring, their family DAP/MAP ratio remained constant at 79% suggesting stronger engagement. Also, Meta’s total impressions increased 15% YoY, suggesting people are spending more time on Meta.
In terms of Facebook blue, UCAN DAUs ticked up and total DAU’s were up 4% YoY. More importantly, the DAU/MAU ratio ticked up to 67% suggesting stronger engagement as well.
Zuck’s comments during the earnings call further point to increased engagement and the increasing popularity of reels.
Revenue was up 10% after accounting for foreign exchange changes and the guide was light. Monetization was not as strong as many analysts hoped for, but this seems like a short-term headwind that the street is more than willing to look past.
Zuckerberg seemed unconcerned about the monetization of Reels. He reminded investors that Facebook has a blueprint for it and they will be able to monetize as long as the engagement is high. If Zuckerberg is unconcerned, so am I.
In terms of capital allocation, Meta bought back $9bn of stock, but I was slightly disappointed management did not hammer the buyback at lower prices. Even so, the buyback is still significant and they have almost $30bn remaining.
Zuckerberg also appears to be listening to the street that they are not thrilled with the metaverse spend. He dropped the expenses estimates by $3bn. Even at the lower level, if Facebook loses the battle for the metaverse, it will not be because of a lack of capital deployed.
Overall, I thought it was a great quarter. I will be releasing
$FICO report later today and hopefully
$VLY tomorrow.