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Will Higher Ad Revenues Aid Meta Platforms' (META) Q2 Earnings?
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Meta Platforms’ (META - Free Report) second-quarter 2024 results, set to be reported on Jul 31, are expected to reflect the benefits of higher advertising revenues.
It is expected to benefit from strong demand from advertisers. The Zacks Consensus Estimate for Meta Platforms’ second-quarter advertising revenues is pegged at $37.51 billion, indicating growth of 19.1% year over year.
In the first quarter of 2024, advertising revenues (99% of Family of Apps revenues) increased 26.8% year over year to $35.64 billion and accounted for 97.8% of revenues.
Meta Platforms' nearest competitor for ad dollars, Alphabet (GOOGL - Free Report) , recently announced strong ad growth for both Google and YouTube.
In its recently concluded second-quarter 2024, Google’s advertising revenues rose 11.1% year over year to $64.62 billion. YouTube’s advertising revenues improved 13% year over year to $8.7 billion.
Meta Platforms’ focus on improving ad ranking and measurement by leveraging AI has been a key catalyst driving advertisers’ return on investment.
The Zacks Consensus Estimate for advertising revenues in Asia-Pacific is pegged at $7.546 billion, indicating growth of 17.3% in the second quarter of 2024.
The consensus mark for advertising revenues in Europe, the United States and Canada, and the Rest of the World is pegged at $8.78 billion, $16.89 billion and $4.52 billion, indicating 20.8%, 19.5% and 23.5% growth, respectively.
Click here to know how Meta Platforms’ overall second-quarter performance is likely to be.
META Leveraging AI to Boost Growth
META has been leveraging AI and machine learning to boost the potency of its social-media offerings, including WhatsApp, Instagram, Facebook and Threads. Effective usage of AI has been helping the company keep its users engaged. AI-driven feed recommendations have been a key catalyst.
However, rising expenses related to investments in developing more advanced models and AI services are expected to keep margins under pressure. The Reality Labs business continues to burn cash, which doesn’t bode well for META’s near-term prospects.
The company, which currently carries a Zacks Rank #3 (Hold), is expected to have benefited from Instagram’s growing popularity in international markets, particularly in Asia. Much of it can be attributed to the growing popularity of short-form videos, Reels on Instagram.
Reels have been attracting Gen-Z to the platform amid competition from Snapchat, X and TikTok. AI has helped in improving recommendations, which drove a more than 40% increase in time spent on Instagram.
Threads growth has been noteworthy for Meta Platforms. The company has been focusing on the retention of users, which is expected to have benefited user growth.
Meta Platforms’ commitment to prioritizing user safety and well-being through initiatives aimed at enhancing parental supervision, messaging privacy and time management on its platforms. These factors are expected to have driven user base growth in the second quarter of 2024.
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 or WhatsApp) on a given day, is expected to be 3.26 billion.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings is pegged at $4.69 per share, up 0.64% over the past 30 days and indicating 45.2% year-over-year growth.
It expects total revenues between $36.5 billion and $39 billion for the second quarter of 2024.
The consensus estimate for second-quarter revenues is currently pegged at $38.27 billion, indicating growth of 19.59% from the figure reported in the year-ago quarter.
Upcoming Earnings to Watch For
Meta Platforms belongs to the Zacks Internet Software industry. Investors are eagerly waiting for the upcoming earnings of DigitalOcean (DOCN - Free Report) and Magnite (MGNI - Free Report) , two better-ranked stocks in the same industry.
Image: Bigstock
Will Higher Ad Revenues Aid Meta Platforms' (META) Q2 Earnings?
Meta Platforms’ (META - Free Report) second-quarter 2024 results, set to be reported on Jul 31, are expected to reflect the benefits of higher advertising revenues.
It is expected to benefit from strong demand from advertisers. The Zacks Consensus Estimate for Meta Platforms’ second-quarter advertising revenues is pegged at $37.51 billion, indicating growth of 19.1% year over year.
In the first quarter of 2024, advertising revenues (99% of Family of Apps revenues) increased 26.8% year over year to $35.64 billion and accounted for 97.8% of revenues.
Meta Platforms' nearest competitor for ad dollars, Alphabet (GOOGL - Free Report) , recently announced strong ad growth for both Google and YouTube.
In its recently concluded second-quarter 2024, Google’s advertising revenues rose 11.1% year over year to $64.62 billion. YouTube’s advertising revenues improved 13% year over year to $8.7 billion.
Meta Platforms, Inc. Revenue (TTM)
Meta Platforms, Inc. revenue-ttm | Meta Platforms, Inc. Quote
Meta Platforms’ focus on improving ad ranking and measurement by leveraging AI has been a key catalyst driving advertisers’ return on investment.
The Zacks Consensus Estimate for advertising revenues in Asia-Pacific is pegged at $7.546 billion, indicating growth of 17.3% in the second quarter of 2024.
The consensus mark for advertising revenues in Europe, the United States and Canada, and the Rest of the World is pegged at $8.78 billion, $16.89 billion and $4.52 billion, indicating 20.8%, 19.5% and 23.5% growth, respectively.
Click here to know how Meta Platforms’ overall second-quarter performance is likely to be.
META Leveraging AI to Boost Growth
META has been leveraging AI and machine learning to boost the potency of its social-media offerings, including WhatsApp, Instagram, Facebook and Threads. Effective usage of AI has been helping the company keep its users engaged. AI-driven feed recommendations have been a key catalyst.
However, rising expenses related to investments in developing more advanced models and AI services are expected to keep margins under pressure. The Reality Labs business continues to burn cash, which doesn’t bode well for META’s near-term prospects.
The company, which currently carries a Zacks Rank #3 (Hold), is expected to have benefited from Instagram’s growing popularity in international markets, particularly in Asia. Much of it can be attributed to the growing popularity of short-form videos, Reels on Instagram.
Reels have been attracting Gen-Z to the platform amid competition from Snapchat, X and TikTok. AI has helped in improving recommendations, which drove a more than 40% increase in time spent on Instagram.
Threads growth has been noteworthy for Meta Platforms. The company has been focusing on the retention of users, which is expected to have benefited user growth.
Meta Platforms’ commitment to prioritizing user safety and well-being through initiatives aimed at enhancing parental supervision, messaging privacy and time management on its platforms. These factors are expected to have driven user base growth in the second quarter of 2024.
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 or WhatsApp) on a given day, is expected to be 3.26 billion.
What Do the Estimates Say?
The Zacks Consensus Estimate for second-quarter earnings is pegged at $4.69 per share, up 0.64% over the past 30 days and indicating 45.2% year-over-year growth.
It expects total revenues between $36.5 billion and $39 billion for the second quarter of 2024.
The consensus estimate for second-quarter revenues is currently pegged at $38.27 billion, indicating growth of 19.59% from the figure reported in the year-ago quarter.
Upcoming Earnings to Watch For
Meta Platforms belongs to the Zacks Internet Software industry. Investors are eagerly waiting for the upcoming earnings of DigitalOcean (DOCN - Free Report) and Magnite (MGNI - Free Report) , two better-ranked stocks in the same industry.
DigitalOcean and Magnite sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
While DigitalOcean is set to report its quarterly earnings on Aug 8, Magnite is scheduled to report on Aug 7.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.