Meta shares are making new recovery highs after reporting better-than-expected results. CNBC has a breakdown: 👇
Investors are celebrating the first quarter of double-digit YoY revenue growth since the end of 2021. Its 11% growth is a stark turnaround from the three periods of revenue declines experienced last year. And looking ahead, the company expects revenues of $32 to $34.5 billion in the third quarter. The low end of that range represents 15% YoY growth. 💪
CEO Mark Zuckerberg touted the company’s exciting product pipeline, including Llama 2, Threads, Reels, Quest 3, and new AI products.
But big investments don’t come without a cost. Expenses rose 10% YoY to $22.61 billion. While the company has aggressively cut costs during its “year of efficiency,” headcount costs remain elevated. Total headcount fell 14% YoY, but only half of the 2023 layoffs are reflected in that number. And payroll expenses are expected to remain elevated as its workforce shifts toward higher-cost technical roles. 🤑
As for its Reality Labs unit, sales of $276 million paled in comparison to its $3.7 billion loss. Much of the company’s 2023 capital expenditures of $27 to $30 billion come from this unit, which is expected to remain a cost center through 2024 as Meta makes its vision a “reality.”
Investors are happy to see the digital advertising environment rebound more than anticipated. Clearly, Meta is positioned well to take advantage of this shift, with $META shares up another 6% after hours. Eventually, the “straight-line” ascent that began last October will end. But today was not that day. 📈
