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Meta Platforms' (FB) Q1 Earnings Beat Mark, Revenues Up Y/Y
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Meta Platforms’ first-quarter 2022 earnings of $2.72 per share beat the Zacks Consensus Estimate by 7.09% and decreased 17.6% year over year.
Revenues of $27.91 billion lagged the Zacks Consensus Estimate by 1.08% but increased 6.6% year over year. At constant currency (cc), the top line improved 10%.
Meta shares are down 41.9% year to date, underperforming the Zacks Computer & Technology sector’s decline of 23.7%.
Top-Line Details
Geographically, Asia-Pacific, the United States & Canada, and Rest of World (RoW) revenues grew 20.3%, 2.1% and 21.9%, on a year-over-year basis, respectively. Europe revenues declined 0.6% year over year to $6.49 billion.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Family of Apps revenues (97.4% of total revenues) increased 6.1% year over year to $27.21 billion. Family of Apps includes Facebook, Instagram, Messenger, WhatsApp and other services.
Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, were 2.87 billion, up 5.5% year over year.
Family Monthly Active People or MAP increased 5.5% year over year to 3.64 billion.
Advertising revenues (99.2% of Family of Apps revenues) increased 6.1% year over year to $27 billion and accounted for 96.7% of first-quarter revenues.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. Moreover, measuring these outcomes has also become difficult. The Russia-Ukriane conflict, as well as a slowdown in e-commerce, further hurt top-line growth in the reported quarter.
The social network giant’s RoW, the United States & Canada, and Asia-Pacific advertising revenues grew 21.2%, 19.6% and 1.1%, on a year-over-year basis, respectively. Europe advertising revenues declined 0.1% year over year to $6.36 billion, reflecting lower ad spending in the region.
Ad impressions served rose 15%, and average price per ad decreased 8% from the year-ago quarter. Impression growth was primarily driven by Asia Pacific and RoW.
Family of Apps’ other revenues increased 8.6% year over year to $215 million.
Reality Labs revenues (2.5% of total revenues) increased 30.1% year over year to $695 million. Reality Labs includes augmented- and virtual-reality-related consumer hardware, software and content.
Facebook’s User Base Remains Strong
Monthly active users (MAUs) were 2.936 billion, up 2.9% year over year.
MAUs in Asia-Pacific, RoW and the United States & Canada grew 5.4%, 1.8% and 1.5% to 1.297 billion, 957 million and 263 million, respectively. Europe MAUs declined 1.2% to 418 million due to the block in Russia.
Daily Active Users (DAUs) were 1.960 billion, which increased 4.4% year over year and represented 67% of MAUs.
Asia-Pacific DAUs were up 8.8% year over year to 827 million. DAUs in RoW and the United States & Canada grew 2.6% and 0.5% to 629 million and 196 million, respectively. DAUs in Europe declined 0.6% year over year to307 million.
Average Revenue per User (ARPU) in RoW, the United States & Canada, and Asia-Pacific grew 18.9%, 0.5% and 13.5%, on a year-over-year basis, respectively.
Quarter Details
In the first quarter, total costs and expenses increased 31% year over year to $19.38 billion. As a percentage of revenues, total costs and expenses were 69.5%, significantly up from the year-ago quarter’s 56.5%.
As a percentage of revenues, marketing & sales (M&S), and research & development (R&D) increased 100 bps and 780 bps, on a year-over-year basis, respectively.
General & administrative (G&A) expenses increased 230 bps from the year-ago quarter.
Meta’s employee base was 77,805 at the end of the first quarter, up 28% year over year.
Operating income of $8.52 billion decreased 25.1% year over year. Operating margin was 30.5%, significantly down from 43.5% reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash & cash equivalents and marketable securities were $43.89 billion compared with $48 billion as of Dec 31, 2021.
Capital expenditures were $5.55 billion in the first quarter compared with $5.54 billion in the previous quarter. Free cash flow was $8.53 billion compared with $9.55 billion reported in the previous quarter.
Meta repurchased $9.39 billion of its Class A common stock in the reported quarter. As of Mar 31, 2022, the company had $29.41 billion available and authorized for repurchases.
Guidance
Meta expects total revenues between $28 billion and $30 billion for the second quarter of 2022. Unfavorable forex is expected to hurt year-over-year top-line growth by 3%.
Meta anticipates total expenses for the current year to be between $87 billion and $92 billion, primarily driven by the Family of Apps segment, followed by Reality Labs.
In the ongoing year, Meta expects capital expenditures to be between $29 billion and $34 billion, driven by investments in data centers, servers, network infrastructure and office facilities.
Image: Bigstock
Meta Platforms' (FB) Q1 Earnings Beat Mark, Revenues Up Y/Y
Meta Platforms’ first-quarter 2022 earnings of $2.72 per share beat the Zacks Consensus Estimate by 7.09% and decreased 17.6% year over year.
Revenues of $27.91 billion lagged the Zacks Consensus Estimate by 1.08% but increased 6.6% year over year. At constant currency (cc), the top line improved 10%.
Meta shares are down 41.9% year to date, underperforming the Zacks Computer & Technology sector’s decline of 23.7%.
Top-Line Details
Geographically, Asia-Pacific, the United States & Canada, and Rest of World (RoW) revenues grew 20.3%, 2.1% and 21.9%, on a year-over-year basis, respectively. Europe revenues declined 0.6% year over year to $6.49 billion.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. Quote
Family of Apps revenues (97.4% of total revenues) increased 6.1% year over year to $27.21 billion. Family of Apps includes Facebook, Instagram, Messenger, WhatsApp and other services.
Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, were 2.87 billion, up 5.5% year over year.
Family Monthly Active People or MAP increased 5.5% year over year to 3.64 billion.
Advertising revenues (99.2% of Family of Apps revenues) increased 6.1% year over year to $27 billion and accounted for 96.7% of first-quarter revenues.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. Moreover, measuring these outcomes has also become difficult. The Russia-Ukriane conflict, as well as a slowdown in e-commerce, further hurt top-line growth in the reported quarter.
The social network giant’s RoW, the United States & Canada, and Asia-Pacific advertising revenues grew 21.2%, 19.6% and 1.1%, on a year-over-year basis, respectively. Europe advertising revenues declined 0.1% year over year to $6.36 billion, reflecting lower ad spending in the region.
Ad impressions served rose 15%, and average price per ad decreased 8% from the year-ago quarter. Impression growth was primarily driven by Asia Pacific and RoW.
Family of Apps’ other revenues increased 8.6% year over year to $215 million.
Reality Labs revenues (2.5% of total revenues) increased 30.1% year over year to $695 million. Reality Labs includes augmented- and virtual-reality-related consumer hardware, software and content.
Facebook’s User Base Remains Strong
Monthly active users (MAUs) were 2.936 billion, up 2.9% year over year.
MAUs in Asia-Pacific, RoW and the United States & Canada grew 5.4%, 1.8% and 1.5% to 1.297 billion, 957 million and 263 million, respectively. Europe MAUs declined 1.2% to 418 million due to the block in Russia.
Daily Active Users (DAUs) were 1.960 billion, which increased 4.4% year over year and represented 67% of MAUs.
Asia-Pacific DAUs were up 8.8% year over year to 827 million. DAUs in RoW and the United States & Canada grew 2.6% and 0.5% to 629 million and 196 million, respectively. DAUs in Europe declined 0.6% year over year to307 million.
Average Revenue per User (ARPU) in RoW, the United States & Canada, and Asia-Pacific grew 18.9%, 0.5% and 13.5%, on a year-over-year basis, respectively.
Quarter Details
In the first quarter, total costs and expenses increased 31% year over year to $19.38 billion. As a percentage of revenues, total costs and expenses were 69.5%, significantly up from the year-ago quarter’s 56.5%.
As a percentage of revenues, marketing & sales (M&S), and research & development (R&D) increased 100 bps and 780 bps, on a year-over-year basis, respectively.
General & administrative (G&A) expenses increased 230 bps from the year-ago quarter.
Meta’s employee base was 77,805 at the end of the first quarter, up 28% year over year.
Operating income of $8.52 billion decreased 25.1% year over year. Operating margin was 30.5%, significantly down from 43.5% reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash & cash equivalents and marketable securities were $43.89 billion compared with $48 billion as of Dec 31, 2021.
Capital expenditures were $5.55 billion in the first quarter compared with $5.54 billion in the previous quarter. Free cash flow was $8.53 billion compared with $9.55 billion reported in the previous quarter.
Meta repurchased $9.39 billion of its Class A common stock in the reported quarter. As of Mar 31, 2022, the company had $29.41 billion available and authorized for repurchases.
Guidance
Meta expects total revenues between $28 billion and $30 billion for the second quarter of 2022. Unfavorable forex is expected to hurt year-over-year top-line growth by 3%.
Meta anticipates total expenses for the current year to be between $87 billion and $92 billion, primarily driven by the Family of Apps segment, followed by Reality Labs.
In the ongoing year, Meta expects capital expenditures to be between $29 billion and $34 billion, driven by investments in data centers, servers, network infrastructure and office facilities.
Zacks Rank & Stocks to Consider
Currently, Meta has a Zacks Rank #3 (Hold).
Camtek (CAMT - Free Report) , CDW (CDW - Free Report) and Fabrinet (FN - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All the three stocks has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CAMT shares are down 36.4% compared with sector’s decline of 23.7%. The company is set to report first-quarter 2022 on May 12, 2022.
CDW shares are down 19.8% year to date. The company is set to report first-quarter 2022 results on May 4.
Fabrinet shares are down 17.5% year to date. FN is set to report third-quarter fiscal 2022 results on May 2.