Meta Platforms surges as ad recovery offers revenue windfall, strong guidance
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Meta Platforms (NASDAQ:META) jumped 4% post-market (and spiked as much as 8.8% briefly) after posting second-quarter earnings that easily beat expectations across the board on financials and on user growth, despite the company's large installed base.
Revenues grew 11% to $32B, some 3% better than forecasts for $31.03B, and costs and expenses rose 10%.
That led operating income to a 12% gain, to $9.39B, as operating margins remained flat at 29%. And net income rose 16%, to $7.79B.
"We had a good quarter," CEO Mark Zuckerberg said in his usual terse initial reaction. "We continue to see strong engagement across our apps and we have the most exciting roadmap I've seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall."
Meanwhile, the company guided to strong third-quarter revenue of $32B-$34.5B vs. an expected $31.11B. It expects a foreign currency tailwind of about 3% based on current rates.
Operational metrics were strong as well: Facebook daily active users grew 5% to 2.06B, vs. 2.03B expected, and Facebook monthly active users rose 3% to 3.03B (vs. 3.0B expected).
Zooming out to Meta's "Family of Apps," daily active people rose 7% to 3.07B, while family monthly active people rose 6% to 3.88B.
Ad impressions across the Family rose 34%, while average price per ad fell 16% year-over-year.
In other forecasts, Meta lowered full-year expectations for capital expenditures to $27B-$30B from a previous $30B-$33B. "The reduced forecast is due to both cost savings, particularly on non-AI servers, as well as shifts in capital expenditures into 2024 from delays in projects and equipment deliveries rather than a reduction in overall investment plans."
Capex should grow in 2024, though, due to investing in data center and servers, especially for AI work.
Conference call to come at 5 p.m. ET.

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