We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
META's Q2 Earnings & Revenues Beat Estimates, Shares Up
Read MoreHide Full Article
Meta Platforms (META - Free Report) reported second-quarter 2024 earnings of $5.16 per share, beating the Zacks Consensus Estimate by 9.79%. The figure surged 73.2% year over year.
Revenues of $39.07 billion beat the Zacks Consensus Estimate by 1.91% and increased 22.1% year over year. At constant currency (cc), revenues soared 23% year over year.
META shares jumped more than 7% in pre-market trading in response to the impressive second-quarter results and strong third-quarter guidance.
User growth remained solid in the United States, with WhatsApp reaching more than 100 million monthly users and Thread approaching 200 million milestone.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Meta Platforms is leveraging AI to improve the quality of recommendations that helped drive user engagement across Facebook and Instagram in the reported quarter.
Geographically, revenues from the United States & Canada, Asia-Pacific, Europe and the Rest of the World (RoW) surged 16.8%, 21.1%, 27% and 34.7% on a year-over-year basis, respectively.
Revenues from Family of Apps (99.1% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 22.1% year over year to $38.72 billion.
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, was 3.27 billion, up 6.5% year over year.
Advertising revenues (99% of Family of Apps revenues) increased 21.7% year over year to $38.33 billion and accounted for 97.9% of second-quarter revenues. At cc, revenues increased 23% year over year.
Advertising revenues from the United States & Canada, Asia-Pacific, Europe and the RoW surged 17.4%, 20%, 25.7% and 33.2% on a year-over-year basis, respectively.
Ad impressions delivered across Family of Apps increased 10% year over year, and the average price per ad jumped 10% in the reported quarter. Impression growth from Asia-Pacific, the RoW, the United States & Canada and Europe was 15%, 8%, 8% and 6%, respectively.
Online commerce was the largest contributor to year-over-year growth, followed by gaming and entertainment and media.
Family of Apps’ other revenues soared 73% year over year to $389 million, primarily driven by higher business messaging revenue growth from META’s WhatsApp Business platform.
Reality Labs’ revenues (0.9% of total revenues) increased 28% year over year to $353 million, driven by higher sales of Quest headset.
Operating Details
In the second quarter, total costs and expenses increased 7.2% year over year to $24.22 billion. As a percentage of revenues, total costs and expenses were 62%, significantly down from 70.6% in the year-ago quarter.
In the reported quarter, Family of Apps expenses were $19.4 billion, accounting for 80% of Meta Platforms’ overall expenses. FoA expenses were up 4% year over year, primarily due to higher infrastructure and headcount-related costs.
Reality Labs’ expenses were $4.8 billion, up 21% year over year.
As a percentage of revenues, marketing & sales expenses decreased 290 basis points (bps), while general & administrative expenses fell 370 bps on a year-over-year basis.
Research & development expenses, as a percentage of revenues, were 27%, down 220 bps on a year-over-year basis.
Meta Platforms’ employee base was 70,799 at the end of the second quarter, down 1% year over year.
Operating income of $14.85 billion jumped 58.1% year over year. The operating margin was 38%, expanding significantly from 29.4% in the year-ago quarter.
Family of Apps’ operating income surged 47.2% year over year to $19.34 billion. Reality Labs reported a loss of $4.49 billion compared with the year-ago quarter’s loss of $3.74 billion.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash & cash equivalents and marketable securities were $58.08 billion compared with $58.12 billion as of Mar 31, 2024.
Long-term debt was $18.39 billion as of Jun 30, 2024, unchanged sequentially.
Capital expenditures were $19.37 billion in the second quarter compared with $6.72 billion in the previous quarter. Free cash flow was $10.9 billion compared with $12.53 billion reported in the previous quarter.
The company repurchased $6.32 billion of its Class A common stock in the reported quarter and paid a dividend worth $1.27 billion.
Guidance
Meta Platforms expects total revenues between $38.5 billion and $41 billion for the third quarter of 2024, assuming an unfavorable forex impact of 2% to year-over-year revenue growth.
For 2024, the company still anticipates total expenses between $96 billion and $99 billion. It continues to expect Reality Labs’ operating losses to increase year over year in 2024.
META expects 2024 capital expenditure in the range of $37-$40 billion, higher than previous guidance of $35-$40 million.
Zacks Rank & Stocks to Consider
Currently, Meta Platforms carries a Zacks Rank #3 (Hold).
Year to date, Meta Platforms’ shares have returned 40% compared with the Zacks Computer and Technology sector’s rise of 16.4%.
Image: Bigstock
META's Q2 Earnings & Revenues Beat Estimates, Shares Up
Meta Platforms (META - Free Report) reported second-quarter 2024 earnings of $5.16 per share, beating the Zacks Consensus Estimate by 9.79%. The figure surged 73.2% year over year.
Revenues of $39.07 billion beat the Zacks Consensus Estimate by 1.91% and increased 22.1% year over year. At constant currency (cc), revenues soared 23% year over year.
META shares jumped more than 7% in pre-market trading in response to the impressive second-quarter results and strong third-quarter guidance.
User growth remained solid in the United States, with WhatsApp reaching more than 100 million monthly users and Thread approaching 200 million milestone.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. Quote
Top-Line Details
Meta Platforms is leveraging AI to improve the quality of recommendations that helped drive user engagement across Facebook and Instagram in the reported quarter.
Geographically, revenues from the United States & Canada, Asia-Pacific, Europe and the Rest of the World (RoW) surged 16.8%, 21.1%, 27% and 34.7% on a year-over-year basis, respectively.
Revenues from Family of Apps (99.1% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 22.1% year over year to $38.72 billion.
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, was 3.27 billion, up 6.5% year over year.
Advertising revenues (99% of Family of Apps revenues) increased 21.7% year over year to $38.33 billion and accounted for 97.9% of second-quarter revenues. At cc, revenues increased 23% year over year.
Advertising revenues from the United States & Canada, Asia-Pacific, Europe and the RoW surged 17.4%, 20%, 25.7% and 33.2% on a year-over-year basis, respectively.
Ad impressions delivered across Family of Apps increased 10% year over year, and the average price per ad jumped 10% in the reported quarter. Impression growth from Asia-Pacific, the RoW, the United States & Canada and Europe was 15%, 8%, 8% and 6%, respectively.
Online commerce was the largest contributor to year-over-year growth, followed by gaming and entertainment and media.
Family of Apps’ other revenues soared 73% year over year to $389 million, primarily driven by higher business messaging revenue growth from META’s WhatsApp Business platform.
Reality Labs’ revenues (0.9% of total revenues) increased 28% year over year to $353 million, driven by higher sales of Quest headset.
Operating Details
In the second quarter, total costs and expenses increased 7.2% year over year to $24.22 billion. As a percentage of revenues, total costs and expenses were 62%, significantly down from 70.6% in the year-ago quarter.
In the reported quarter, Family of Apps expenses were $19.4 billion, accounting for 80% of Meta Platforms’ overall expenses. FoA expenses were up 4% year over year, primarily due to higher infrastructure and headcount-related costs.
Reality Labs’ expenses were $4.8 billion, up 21% year over year.
As a percentage of revenues, marketing & sales expenses decreased 290 basis points (bps), while general & administrative expenses fell 370 bps on a year-over-year basis.
Research & development expenses, as a percentage of revenues, were 27%, down 220 bps on a year-over-year basis.
Meta Platforms’ employee base was 70,799 at the end of the second quarter, down 1% year over year.
Operating income of $14.85 billion jumped 58.1% year over year. The operating margin was 38%, expanding significantly from 29.4% in the year-ago quarter.
Family of Apps’ operating income surged 47.2% year over year to $19.34 billion. Reality Labs reported a loss of $4.49 billion compared with the year-ago quarter’s loss of $3.74 billion.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash & cash equivalents and marketable securities were $58.08 billion compared with $58.12 billion as of Mar 31, 2024.
Long-term debt was $18.39 billion as of Jun 30, 2024, unchanged sequentially.
Capital expenditures were $19.37 billion in the second quarter compared with $6.72 billion in the previous quarter. Free cash flow was $10.9 billion compared with $12.53 billion reported in the previous quarter.
The company repurchased $6.32 billion of its Class A common stock in the reported quarter and paid a dividend worth $1.27 billion.
Guidance
Meta Platforms expects total revenues between $38.5 billion and $41 billion for the third quarter of 2024, assuming an unfavorable forex impact of 2% to year-over-year revenue growth.
For 2024, the company still anticipates total expenses between $96 billion and $99 billion. It continues to expect Reality Labs’ operating losses to increase year over year in 2024.
META expects 2024 capital expenditure in the range of $37-$40 billion, higher than previous guidance of $35-$40 million.
Zacks Rank & Stocks to Consider
Currently, Meta Platforms carries a Zacks Rank #3 (Hold).
Year to date, Meta Platforms’ shares have returned 40% compared with the Zacks Computer and Technology sector’s rise of 16.4%.
Apple (AAPL - Free Report) , CACI International (CACI - Free Report) , and Dell Technologies (DELL - Free Report) are some top-ranked stocks that investors can consider in the broader sector. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apple shares have soared 15.5% year to date. AAPL is set to report third-quarter fiscal 2024 results on Aug 1.
CACI International shares have gained 42.7% year to date. CACI is set to report fourth-quarter fiscal 2024 results on Aug 8.
Dell Technologies shares have gained 48.6% year to date. DELL is set to report second-quarter fiscal 2025 results on Aug 29.