25 Apr 2024

Meta plunges 18% on weak revenue guidance even as first-quarter results top estimates.

$META Meta Q1 FY24: Daily active people +7% Y/Y to 3.2B. Ad impressions +20% Y/Y. • Revenue +27% Y/Y to $36.5B ($0.2B beat), the fastest rate of expansion for any quarter since 2021. • Operating margin 38% (+13pp Y/Y). • FCF margin 34% (+10pp Y/Y). • EPS $4.71 ($0.39 beat). • FY24 Capex $35-40B ($30-$37B prev.) • Net income more than doubled to $12.37 billion, or $4.71 per share, from $5.71 billion, or $2.20 per share, a year ago. One reason for the pop in net income is that, while revenue growth accelerated, sales and marketing costs dropped 16% in the quarter from a year earlier. Meta said it expects sales in the second quarter of $36.5 billion to $39 billion. The midpoint of the range, $37.75 billion, would represent 18% year-over-year growth and is below analysts’ average estimate of $38.3 billion. The stock selloff accelerated early in the earnings call after Zuckerberg jumped into his discussion about investments, namely in areas like glasses and mixed reality, where the company doesn’t currently make money. The company no longer reports daily active users and monthly active users. It now gives a figure for what it calls “family daily active people.” That number was 3.24 billion for March 2024, a 7% increase from a year earlier. Meta has raised investor expectations due to its improved financial performance in recent quarters, leaving little room for error. The stock is up about 40% this year after almost tripling last year. Source: App Economy Insight, CNBC


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