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Meta earnings presentation Q1 2022 [pdf]
- hmate9 4y agoStock is up 18% after hours. Revenues and earnings: - Daily Active Users 1.96BN, beating Est. of 1.94BN, up 4% Y/Y - Monthly Active Users 2.94BN, missing Est. 2.95BN, up 3% Y/Y - EPS $2.72, beating estimate $2.56 - Revenue $27.91 billion, beating estimate $28.24 billion (Bloomberg Consensus) - Advertising rev. $27.00 billion, missing estimate $27.48 billion - Family of Apps revenue $27.21 billion, missing estimate $27.52 billion - Reality Labs revenue $695 million, beating estimate $677.1 million - Other revenue $215 million, beating estimate $189.3 million A red flag here: yes, revenue grew 7% YY, but that was the slowest pace of growth since the company went public in 2012. Meanwhile, US revenue barely grew in Q1 at $12.671BN, up from $12.405 BN.
- ArtWomb 4y ago>>> Reality Labs revenue $695 million, beating estimate $677.1 million On $3B loss. Insane R&D spend for CV ;)
- guillermin 4y agoFor me, that Reality Labs is the division beating estimates drives home that Meta's bet on XR is going to pay. Ad revenue might be down because of changes in Apple and Google mobile policies, but they are going to control the platform of the future and set their own rules.
- vosper 4y agoI bought a Quest 2 out of curiosity, and am amazed by it. Zuckerberg apparently says they're still 5-10 years away from where they want to be with the technology, so I'm guessing what's coming down the pipeline is going to be pretty impressive. I think people are really underestimating how much impact these technologies are going to have. People thought the first iPhone was only good for fart apps. I think this will be a similar story. I just hope someone can compete with FB.
- dumbfounder 4y agoI bought one and I can’t stand it. Too heavy and uncomfortable. The UI is annoying and confusing. I tried to find some games for my kids (ages 7-9) but they either couldn’t figure them out or they were boring. What’s up with that start area, why can’t I explore it? It’s collecting dust for me. I see the potential but it seems a ways off.
- zmmmmm 4y ago> I tried to find some games for my kids (ages 7-9) they won't even recommend it as safe for kids that age yet, so it isn't surprising you couldn't find any games targeted to that age range. You should be aware there are some potentially scary things going on in any of the social apps [0] [0] https://www.theguardian.com/tv-and-radio/2022/apr/25/a-barrage-of-assault-racism-and-jokes-my-nightmare-trip-into-the-metaverse https://www.theguardian.com/tv-and-radio/2022/apr/25/a-barra...
- randoglando 4y agoWhile many apps (social ones) are not safe for kids yet (funny enough it's usually unsafe because of other kids - teenagers), there are still many apps that work really well for kids. The Guardian article is quite sensationalized (primarily about VRChat and maybe RecRoom, but the Oculus has more).
- dntrkv 4y agoNobody should be letting their kids play any multi-player games. Not only for their sake (people say some fucked up shit on there), but for the sake of all the other adults playing those games.
- zmmmmm 4y agoUnfortunately, many people are letting their kids (young teens, pre-teens) do that. (Where "letting them" simply means, not actively stopping them, being unaware etc). Which is half the problem. The other half of the problem is that Facebook is actively pushing developers to social-enable their games by integrating Facebook based social features into them (hence the mandatory Facebook account). So even games that have no reason to be using those features are seeing them added.
- ed_elliott_asc 4y agoI can’t see how they will make comfortable and safe, 3ds can’t be used by children!
- rvz 4y ago> For me, that Reality Labs is the division beating estimates drives home that Meta's bet on XR is going to pay. > they are going to control the platform of the future and set their own rules. This. Lots of people are overlooking this part of Meta and they are quite far ahead with XR.
- political12345 4y agoOld people That
- zmmmmm 4y agoIt's interesting that we are all waiting for the other shoe to drop in that Apple is forever "about to" release it's XR devices. Yet so far it hasn't happened. Apple is famous for waiting until quality hits a certain mark, but nonetheless, it tells me that what Oculus/Meta has achieved is more special than people think. This stuff is hard. It looks simple on the surface but watch any of John Carmack's talks and see how much complexity there is underlying it all. I do think Meta is completely wasting its time with it's current approach of trying to re-invent Facebook inside the Metaverse. Hopefully they get past that sooner rather than later. But I have no doubt this is going to be an extremely important platform in the future and other than Apple if they ever show up, it's very hard to see anybody catching Meta.
- IfOnlyYouKnew 4y agoIt's beating the estimate by less than $20 million, or about 7 %, at a level where it's a rounding error anyway. Google says Apple AirPods are responsible for $23 billion in revenue, or 23x Reality Labs. It's running laps around Meta, in reality.
- ceeplusplus 4y agoHeadphones are a well established market with pretty much no growth upside. Apple captures share from incumbents. RL is building out an entirely new market.
- jjfoooo5 4y agoI'm having a hard time tracking down what kind of growth that revenue represents.
- ren_engineer 4y agoit's going to take a lot of marketing to get people to accept VR in large numbers, too much dystopian sci-fi that instantly makes people not interested. When I look at those headsets I instantly think some combination of The Matrix and Brave New World. But maybe Zuck knows about some forthcoming propaganda campaign to focus on getting people to use VR to distract from income inequality, putting the majority of the population into the digital world seems like the best way to distract from real world issues
- krapp 4y agoI think it's more the cost and awkwardness of the headsets and the lack of any "killer" apps that are holding VR back, moreso than dystopian sci-fi.
- zmmmmm 4y agoWell it's interesting having teenage kids. Because while the adults are all busy pooh-poohing it, this tech is rapidly penetrating in that market. Which is to say, something like 80% of my kids friends have access to / use VR routinely. And it's 100% Oculus/Meta.
- Tiktaalik 4y agoI have no doubt that kids (and the young at heart) are having a ball playing VR games, but the real question is whether there's compelling use cases outside of that, of the sort that Meta is constantly trying to highlight. Meta is banking that there is. So far I haven't seen a compelling mass market use case outside of games (which is a relatively niche market), but if you open up development tools well I suppose the hope is that someone will come up with something.
- zmmmmm 4y ago> whether there's compelling use cases outside of that Indeed, this is the billion dollar question. It's very clear there are compelling use cases but the really obvious ones are niche industrial uses, commercial applications etc. So the real question is compelling mass market use cases. The two mass market ones that are apparent at the moment are fitness and virtual office spaces. Fitness is already well on the way, virtual office use is still tenuous and really needs hardware improvements to get off the ground. Those improvements look likely in the next generation of hardware so it's going to be an interesting 24 months to see whether it takes off or not. The elephant in the room, as you point out, is that neither of these match Faceook's supposed aspiration to create a Metaverse. So I see Facebook/Meta's ultimate success here being dictated heavily by how fast they can get over that and target the real mass market use cases as their primary focus.
- paxys 4y agoThat entire segment makes two orders of magnitude less revenue than Meta's core business, so I'd still not consider a marginal beating of expectations to be too informative.
- mupuff1234 4y agoCan one really trust any of the reported user numbers? I imagine they can decide to dial down efforts to detect bots/fake profiles and more or less hit the numbers they want.
- Evan_Hellmuth 4y agoUnlike search ads, businesses buying fb/insta ads care a lot about attribution (at what rate does someone who saw the ad buy something). If ads aren’t effective businesses will stop buying them. Fake clicks will always result in a no-purchase, and therefore would devalue FB’s offering in the #1 metric ad buyers care about. Not to mention that would be fraudulent behavior and they’d be opening themselves up to huge litigation risk.
- mupuff1234 4y agoI'm not necessarily talking about bots clicking ads, could just be fake profiles for whatever reason: inflating the number of likes of a page, writing reviews, phishing attempts, propaganda etc Let's say FB has 200 million bots. Do you think businesses could tell that there's actually 1.7b users and not 1.9b?
- a1371 4y agoAs someone who had bought ads there, I can tell you this is not as true as you think. You pay for the ad and the business picks up a bit, but the reported conversion numbers at least for me never made sense. It's really about making more money than you put in that you keep it going. Now given the ethics around Facebook, I don't do it anymore. I say it's all about CPC, I admit here it isn't.
- Evan_Hellmuth 4y agoNot sure I follow - isn't making more money than you put in a direct result of a high conversion rate? But I'm curious to learn what you mean! I have no direct ad purchasing experience
- randomsearch 4y ago
- zmmmmm 4y ago> Revenue $27.91 billion, beating estimate $28.24 billion Is that a mistake? How does getting less than the estimate constitute beating it?
- mastazi 4y agoAgree, I think parent meant to write "missing" there?
- hmate9 4y ago$9.39 billion Class A common stock shares were repurchased. That is 2% of Meta's market cap. And they still have more to repurchase! As of March 31, 2022, FB had $29.41 billion available and authorized for repurchases.
- potiuper 4y agoAd Rev By Geo *Edited 20Q4 21Q1 % 21Q4 22Q1 % 2512 2434 -0.031 3220 2949 -0.084 Other 4703 4735 0.007 6183 5661 -0.084 Asia 6822 6373 -0.066 8174 6364 -0.221 Europe 13150 11897 -0.095 15062 12024 -0.202 US Can war (.095-.066+.221-.202=0.048) > supply chain (.007-.084+.202-.095=0.03)?
- lyime 4y agoYou have to compare the same periods in previous year for a fair comparison.
- posharma 4y agoWhy is fb up 18% and msft only 4.8% even after beating expectations? This is messed up.
- paulpauper 4y agoit was way oversold, for one. and much cheaper.
- pedrosorio 4y agoFB was down 13.2% in the last week (201.53 -> 174.95) for "no reason", so that probably explains the difference.
- zoover2020 4y agoAre you on Blind by any chance
- posharma 4y agoI don't use Blind.
- rvz 4y agoWhen I see multiple questions from lots of people asking 'why' X stock is performing better than the expectations or other stocks, it also means that there was at least 90% of people that were on the wrong side of the trade, with the remaining 10% laughing all the way to the bank.
- posharma 4y agoWhy the downvotes? It's a genuine question.
- RyanShook 4y agoThe big unknown with Meta is the Multiverse/VR plans Zuckerberg has. How much of the company's reserve and free cash flow is he willing to risk? I think the answer is most of it.
- paulpauper 4y agofb has so much profit and cash that this is not such a big risk.
- RyanShook 4y agoI think most people are severely underestimating how much it will take to build the metaverse Zuckerberg is envisioning. He sees the market cap of the metaverse as much larger than Facebook, Instagram, and WhatsApp. He’s not just saying it, he’s changing the name and direction of the entire company.
- paulpauper 4y agoFB is nuts. Bears focused on the slowing growth ,ignoring that Facebook is making $40/billion profit in a year, which is just astounding. That's 3x Walmart. You don't need much growth when you have so much profit and market dominance. Buying Facebook stock with a PE ratio of 13 , cheaper than any 'blue chip' company, was a steal. $400-600 soon imho.
- msoad 4y agoPeople don't decide to go another store instead of Walmart in a span of few months. But migrating from Instagram to TikTok can happen very quickly.
- paulpauper 4y agoBut migrating from Instagram to TikTok can happen very quickly. they simply use both. That is what I have observed.
- msoad 4y agoThere is a finite number of hours in a day -- unfortunately
- paulpauper 4y agodoes not take many hours to check a timeline or to upload something
- colinmhayes 4y agoPeople looking at a timeline for a couple minutes a day isn't going to cut it for facebook. They need hours of scrolling every day to hit their engagement numbers.
- andrewinardeer 4y agoSleep is also a competitor to screen usage.
- rvz 4y agoInteresting. Like I said, I think it is quite too early to write Meta off. [0] Even looked at that 'screaming buy signal' when it got lower than at least around $200 to around $190. [1] Seems like lots of gamblers got wiped out after this earnings result thinking that Meta was finished. In this case the tables have turned and it is not over yet. [0] https://news.ycombinator.com/item?id=30185992 https://news.ycombinator.com/item?id=30185992 [1] https://news.ycombinator.com/item?id=30186098 https://news.ycombinator.com/item?id=30186098
- jonas21 4y agoIt's only in the HN bubble that people think Meta is finished.
- randomsearch 4y agoDefinitely in that bubble. Main product has tanked. So few people use it extensively now. Instagram has been absolutely destroyed by tik tok. As that audience grows up, the impact of that colossal defeat will hurt more and more. Buying another success will be near impossible, and they’ve not created anything significant since the original app. No reason to expect them to successfully build something as difficult as a VR platform. They’ve had years to fix the above. They haven’t. Whilst that doesn’t matter for their current earnings, the future looks very bleak, especially when the next recession hits and advertising spend plummets. I do wonder at what point Zuck will step away. I guess sidewards to avoid spooking investors but he’s smart, he knows it’s over.
- oblio 4y agoFacebook is product with a global audience. I doubt you have a good enough holistic overview.
- randomsearch 4y agoMaybe, maybe not. I've been downvoted for my analysis but absolutely stand by it and want to double-down for the record, as I think HN is very wrong about this. Worth noting that Facebook's stock is now less than 50% of its peak price, and we're in a bull market. How is that going to look when the recession hits? Whilst I'm sure it will continue to rake in cash for a few years, my point is that the gradient is severely negative and it will accelerate. Tik Tok will overtake Instagram this year, despite the fact that its audience haven't even reach 25 yet. That's _already baked in_ to the demographics. The only way I'm wrong is if Facebook make a big success with a new product in-house, which they have never done. I believe they don't have the ability to do it. Their hiring and their culture are the problem, and you just can't fix culture overnight (esp with the original founder at the helm). Facebook are not Microsoft, Google, or Amazon. They don't have the same culture. The reason they're in the same bracket is their financial success, but it's not an appropriate comparison.
- gigatexal 4y agoCompared to Q12021 it’s an improvement.
- kerng 4y agoSeems like a long slow death for Facebook... the day after tomorrow people will sell again.
- munk-a 4y agoYou're more than welcome to short it, but I don't think I'm willing to take that risk. FB isn't delivering great stats when it comes to the stock market, but their profit margins remain pretty insane.
- deleted 4y ago[deleted]
- nabla9 4y agoAfter hours P/E ratio is about right. There is no reason to expect growth better than the Nasdaq composite for the foreseeable future. 1) Due to ownership structure and personalities, the path to new ideas through leadership is closed. Zuckerberg is not going to change or leave if Meta disappoints in the future. 2) Meta can't by market share anymore thanks to regulators in all major markets being finally awake, led by EU. The benefit of using size as leverage is dwindling. 3) Meta has never created major new innovation/product in-house after Facebook. Metaverse is extremely unlikely to succeed against competition. Discount fruitless R&D from profits. 4) Meta continues to make money due to network effect, economies of size. Meta is like an oil company pumping until Facebook + Instagram well runs dry.
- Evan_Hellmuth 4y agoHave you used a Quest 2?
- nabla9 4y agoQuest 2 is hardware, not market share. Nothing in Meta's VR research is something that competitors can't do. It's just basic incremental improvement you get by throwing money into it.
- bagels 4y ago10b/year of improvements. Who else is doing this?
- dntrkv 4y agoMeta owns over 50% of the VR headset market (over 60% of the headsets used on SteamVR). With the amount of money they are pumping into the space, combined with how invested Zuck is personally, there is no doubt that they will dominate this market. They are investing huge sums of money just to get developers to build for their platform. If you are long on VR, you should be long on Meta.
- 4y ago
- k4ch0w 4y agoI don't see any mention of regulations coming down on Facebook for the bear case. Same goes for Google. US law will regulate them after following EU's. I think it's very likely once we get more tech literate politicians in place
- Evan_Hellmuth 4y agoWhat needs to be regulated?
- munk-a 4y agoI think it's pretty reasonable to argue that they're effectively monopolies in certain market segments and also that their businesses are causing extreme societal externalities that wouldn't exist if they didn't exist.
- Evan_Hellmuth 4y agoI don't think Facebook or Instagram is a monopoly in any sense of the word. Lots of people happily don't use either and there's a boatload of competing social media platforms. If your goal is to thwart software monopolies (a pretty low impact use of FTC time imo) Google search or Visa & Mastercard (duopoly) should be a much higher priority. The social externalities piece gets into philosophical territory. We "protect" people from cigarettes by taxing them heavily. Yet lots of people still choose to use them. Some would argue we should do the same for social media, others would argue that individuals should be free to decide for themselves. Still others would argue that comparing the health impact of cigarettes to that of social media is ridiculous. IMO disincentivizing carbon emissions is a much more clear-cut externality to fight against!
- k4ch0w 4y agoData collection, anti-trust and privacy policies. Right now it is the wild west and consumers have no idea what is being collected and how they are being profiled for ads. https://www.youtube.com/watch?v=wqn3gR1WTcA https://www.youtube.com/watch?v=wqn3gR1WTcA
- gzer0 4y agoEarnings breakdown and why FB stock is up 17% after hours: * Earnings per share: $2.72 vs $2.56 expected * Revenue: $27.91 billion vs $28.2 billion expected * Daily Active Users (DAUs): 1.96 billion vs 1.95 billion expected * Monthly Active Users (MAUs): 2.94 billion vs 2.97 billion expected * Average Revenue per User (ARPU): $9.54 vs. $9.50 expected As of market close today, FB shares had lost almost half their value in 2022.
- sydthrowaway 4y agoOh my god.. will this company ever die?
- mlajtos 4y agoWhy is there 1.6x more Facebook users in Europe than people?