Meta Platforms reported strong financial results for the second quarter of 2024, exceeding analyst expectations on both revenue and earnings per share (EPS). Key takeaways:
- Revenue: $39.07 billion, compared to the estimate of $38.34 billion and $36.45 billion in the previous quarter
- EPS: $5.16, compared to the estimate of $4.72, up from $4.71 in the previous quarter
- Guidance for expenses: $37-$40 billion from a previous $35-$40 billion, compared to expectations compiled by Bloomberg of $37.6 billion (2024
- Capex for 2025: The company says that it should even increase its capex for 2025
- AI: Mark Zuckerberg said that Meta AI is on track to be the most popular AI assistant in the world by the end of 2024
The company's core advertising business remained strong, with ad revenue of $39.07 billion, coming in ahead of the estimate of $38.34 billion. Looking at other measure, revenue from the company's family of apps, which includes Facebook, Instagram, and WhatsApp, was also higher than expected, at $38.72 billion compared to the estimate of $37.76 billion. Operating income rose to $14.85 billion and operating margin rose to 38%. The market estimates that the family active people rose 7% to 3.27 billion, compared with estimates of 3.22 billion.
Meta's Reality Labs segment, which includes the company's virtual and augmented reality initiatives, reported revenue of $353 million, which was slightly below the estimate of $376.9 million. However, the segment's operating loss narrowed to $4.49 billion, compared to a loss of $3.8 billion in the previous quarter.
Overall, Meta's Q2 results were a positive surprise for investors, and the company's stock price rose in after-hours trading by nearly 5% to $500 per share (some gains were erased and the company trades right now at $493 The strong results suggest that the company is effectively navigating the challenging economic environment and that its core advertising business remains healthy.
Meta's Q2 results were a positive sign for the company's future. The company's core advertising business remains strong, and its Reality Labs segment is making progress in narrowing its losses, however the scale of losses remains enormous and Meta still expects higher FY losses for this segment. The company continues investing heavily in AI, with the recent launch of Llama 3.1, an open source large language model. It is worth noting that Meta faces a $1.4 billion settlement due to alleged misuse of biometric data.
