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Meta Q2 2024
Meta kwam met een uitstekend rapport gisteravond. Omzet steeg in lijn met verwachtingen, winst per aandeel boven de lat. Groei van het aantal dagelijkse actieve gebruikers met maar liefst 7% tot 3,24 miljard. Toch ging het aandeel nabeurs met 15% onderuit. Een deel van de verklaring is de outlook van de omzet voor het tweede kwartaal. Die kwam iets lager uit dan waar analisten op hoopten. Maar het grootste deel van de verklaring zit hem in het omhoog bijstellen van de kosten en investeringen voor dit jaar en de komende jaren. Veel beleggers hebben nog steeds nachtmerries over de ontsporende kosten en dalende beurskoers uit 2022 en nu Zuckerberg aanstuurt op een nieuwe investeringscyclus wordt de markt in de gordijnen gejaagd. Zuckerberg gaf tijdens het gesprek met analisten aan dat het jaren kan duren voor de investeringen opbrengen.
Ik overloop kort de cijfers en outlook en nadien de commentaren van Zuckerberg en CFO Li tijdens het gesprek met analisten.
Omzet +27% jaar over jaar tot $36,4 miljard ($36,2 miljard verwacht). Kosten stegen 6%, Operationele winst steeg 91% tot $13,8 miljard. Operationele marge van 38%. EPS van $4,71, 114% beter dan het eerste kwartaal van 2023.
Capex $6,72 miljard. $14,64 miljard aan aandelen teruggekocht en $1,27 miljard dividenden uitgekeerd. Cash en geldbeleggingen $58 miljard. FCF $12,5 miljard. Personeelbestand kromp met 10% tot 69.329
Dagelijkse actieve gebruikers (DAP) 3,24 miljard. Stijging van 7%, add impressies +20%, prijs per advertentie +6%.
Outlook:
Tweede kwartaal omzet verwacht tussen $36,5 miljard en $39 miljard, iets lager dan $38,3 miljard waar analisten op rekenden. Kosten voor 2024 geschat tussen $96 en $99 miljard, hoger dan de eerder geschatte $94 miljard tot $99 miljard. Grotere verliezen verwacht in Reality Labs.
Verwachte capex in range van $35 miljard tot $40 miljard, hoger dan eerder verwachte $30 miljard tot $37 miljard, wegens Ai investeringen die ook in 2025 zullen toenemen.
Gesprek met analisten:
Meta AI heeft volgens Zuckerberg flinke vooruitgang geboekt en is zijn bedrijf goed gepositioneerd om wereldwijd de nummer 1 te worden in AI modellen en diensten. Om dat te bereiken zullen de komende jaren forse investeringen nodig zijn die niet onmiddellijk zullen renderen.
Zuckerberg wijst erop dat in het verleden de aandelenkoers volatiel was wanneer er grote investeringen werden aangekondigd, maar historisch gezien zijn de investeringen succesvol geweest. De eerste signalen voor AI zijn ook positief. Echter, het bouwen van toonaangevende AI zal naar verwachting meerdere jaren duren. Maar zodra de nieuwe AI-diensten op schaal zijn, heeft hij vertrouwen dat ze effectief gemontiseerd kunnen worden. Er zijn meerdere manieren om hier een verdienmodel mee te bouwen, zoals het schalen van zakelijke berichten, advertenties of betaalde content in AI-interacties en het laten betalen door gebruikers voor grotere AI-modellen en meer rekenkracht.
Bovendien helpt AI al om de betrokkenheid bij Meta’s apps te verbeteren, wat op leidt tot het zien van meer advertenties en het verbeteren van advertenties. (CFO Susan Li benadrukt later in de call dat als ze de investeringen opvoeren ze de kosten niet uit het oog zullen verliezen. Zuckerberg gaf in de vorige call reeds aan dat de nieuwe manier van werken die voortkwam uit ‘the year of efficiency’ hem goed bevalt.)
30% van de content die op Facebook wordt bekeken wordt aanbevolen door de AI systemen, een verdubbeling ten opzichte van de voorbije jaren. En voor de eerste keer wordt meer dan de helft van alle content op Instagram aanbevolen door AI, wat tevens relevantere advertenties oplevert. Susan Li: Our investments in developing increasingly advanced recommendation systems continue to drive incremental engagement on our platforms demonstrating that people are finding added value by discovering content from accounts they’re not connected to. The level of recommended content in our apps has scaled as we’ve improved these systems and we see further opportunity to increase the relevance and personalization of recommendations as we advance our models.
Op Instagram maakt Reels momenteel 50% uit van alle tijd die wordt besteed aan de app. Video representeert nu meer dan 60% van alle tijd die wordt besteed op Facebook en Instagram. Threads telt 150 miljoen maandelijkse actieve gebruikers.
Een paar vragen en antwoorden tijdens Q&A
Eric Sheridan
Maybe I’ll ask a two-parter. Mark, you use the analogy of other investment cycles you’ve been through around products like stories and reels. I know you’re not giving long-term guidance today, but using those analogies, how should investors think about the length and depth of this investment cycle with respect to either AI and/or Reality Labs more broadly and mixed reality? And you both talked about the impact AI is having on the advertising ecosystem. What are you watching for in terms of adoption or utility on the consumer side to know that AI adoption is tracking along with the investment cycle? Thank you.
Mark Zuckerberg
Yeah. In terms of the timing, I think it’s somewhat difficult to extrapolate from previous cycles, but I guess like the main thing that we see is that we will usually take, I don’t know, a couple of years. It could be a little more, could be less to focus on building out and scaling the products, and we typically don’t focus that much on monetization of the new areas until they reach significant scale, because it’s so much higher leverage for us just to improve monetization on other things before these new products are at scale. So you enter this period where I think kind of smart investors see that the product is scaling and that there’s a clear monetizable opportunity there even before the revenue materializes. And I think we’ve seen that with reels and with stories and with the shift to mobile and all these things where basically we build out the inventory first for a period of time and then we monetize it. And during that time when it’s scaling, sometimes it’s not just the case that we’re not making money from that thing. It can often actually be the case that it displaces other revenue from other things. So like you saw with reels, it scaled and there was a period where it was not profitable for us as it was scaling before it became profitable. So I think that that’s more the analogy that I’m making on this, but I think what that suggests is that we should all be focused on for the next period is as the consumer products scale, Meta AI really just launched in a meaningful way. So we don’t have any kind of hard stats to share on that, but I’d say that’s the main thing that I’m focused on for this year and probably a lot of next year is growing that product and the other AI products and the engagement around them. And I think we should all have quite a bit of confidence that if those are on a good track to scale then they’re going to end up being very large businesses. So that’s the main point that I was trying to make there.
Douglas Anmuth
Can you just talk about what’s changed most in your view in the business and the opportunity now versus three months ago? And is there anything you’re more cautious about in revenue in the ad market and is the AI opportunity just even bigger and therefore requiring more investment than expected?
Mark Zuckerberg
I think we’ve gotten more optimistic and ambitious on AI. So previously I think that our work in this, I mean, when you were looking at last year, we released Llama 2, we were very excited about the model and thought that, that was going to be the basis to be able to build a number of things that were valuable that integrated into our social products. But now I think we’re in a pretty different place. So with the latest models, we’re not just building good AI models that are going to be capable of building some new good social and commerce products. I actually think we’re in a place where we’ve shown that we can build leading models and be the leading AI company in the world and that opens up a lot of additional opportunities beyond just ones that are the most obvious ones for us. So this is what I was trying to refer to in my opening remarks where I just view the success that we’ve seen with the way that Llama 2 and Meta AI have come together as a real validation technically that we have the talent, the data and the ability to scale infrastructure to do leading work here. And with Meta AI, I think that we are on our path to having Meta AI be the most used and best AI assistant in the world, which I think is going to be enormously valuable. So all of that basically encourages me to make sure that we’re investing to stay at the leading edge of this and we’re doing that at the time when we’re also scaling the product before it is making money. So that’s the analogy that I was making before which is we’ve gone through some of those cycles before. But fundamentally I think if you look at the facts of what our team is able to produce, I think our optimism and ambition have just grown quite a bit and I think that this is just going to end up being quite an important set of products for us. It was already going to be. Now I think it has the potential to be even more important.
Justin Post
First, on the CapEx, mostly you’re kind of talking about an investment cycle here. Is there any way you could kind of use some of the Metaverse spend over into AI? Are they converging and kind of use some of the money from the other areas to kind of fund the AI? And then second, longer term, investors are very focused on returns on capital. Obviously, great returns on CapEx in the past with your margins today. How do we think about the returns on the capital you’re spending? How are you thinking about it, I guess, going forward two, three years out? Thank you.
Susan Li
So I would say, well, I can start with the second part and then I’ll defer to Mark on the first one. In terms of measuring the ROI on our CapEx investments, we’ve broadly categorized our AI investments into two buckets. I think of them as sort of core AI work and then strategic bets, which would include Gen AI and the advanced research efforts to support that. And those are just really at different stages as it relates to being able to measure the return and drive revenue for our business. So with our core AI work, we continue to have a very ROI driven approach to investment and we’re still seeing strong returns as improvements to both engagement and ad performance have translated into revenue gains. Now the second area, strategic bets is where we are much earlier, Mark has talked about the potential that we believe we have to create significant value for our business in a number of areas, including opportunities to build businesses that don’t exist on us today. But we’ll need to invest ahead of that opportunity to develop more advanced models and to grow the usage of our products before they drive meaningful revenue. So while there is tremendous long-term potential, we’re just much earlier on the return curve than with our core AI work. What I’ll say, though, is we’re also building our systems in a way that gives us fungibility in how we use our capacity, so we can flex it across different use cases as we identify what are the best opportunities to put that infrastructure toward.
Mark Zuckerberg
Sure. And then on the question of shifting resources from other parts of the company, I would say broadly we actually are doing that in a lot of places in terms of shifting resources from other areas, whether it’s compute resources or different things in order to advance the AI efforts. For Reality Labs specifically, I mean, I’m still really optimistic about building these new computing platforms long-term. I mentioned in my remarks upfront that one of the bigger areas that we’re investing in, in Reality Labs is glasses. We think that that’s going to be a really important platform for the future. Our outlook for that I think has improved quite a bit because previously we thought that, that would need to wait until we had these full holographic displays to be a large market. And now we’re a lot more focused on the glasses that we’re delivering in partnership with Ray-Ban, which I think are going really well. And so that I think has the ability to be a pretty meaningful and growing platform sooner than I would have expected. So it is true that more of the Reality Labs work like I said is sort of focused on the AI goals as well, but I still think that we should focus on building these long term platforms too.
Youssef Squali
Great. Thank you very much. Mark with the upcoming ban or sale of TikTok ending to a lot earlier today, how do you think that will impact the US social media landscape in that in particular? And what do you say to people who believe that this is potentially a slippery slope in terms of the government picking up winners and losers?
Susan Li
Thanks, Youssef. We’ve obviously been following the events related to TikTok closely, but at this stage, it is just too early I think to assess its impact or what it would mean for our business.
Ken Gawrelski
Thank you very much. As you look out through the coming period of product investment, how should we think about the relationship between Family of Apps revenue and cost growth? Is there any insight you can give us there? And then maybe just one that’s a little bit more specific to the G&A growth in 1Q. You called out legal expenses. Just wanted to see if there’s anything one time in there that would cause the elevated growth in 1Q. Thank you.
Susan Li
Yeah. On the second part of your question first, so on the G&A side that was really driven by legal expenses. We recognized some accruals in Q1 related to ongoing legal matters and you’ll see more detail on that in the 10-Q. On the first part of your question, which is really about sort of the kind of long-term margin profile of Family of Apps, we aren’t giving guidance on that per se. But one of the things that we really have been very disciplined about over the course of 2023 and continuing is really operating the business in a very efficiency oriented way. So we’re being very disciplined with allocation of new resources. This is a muscle that we really built over 2023 that we believe is important for us to keep carrying forward and I think you’ll see us continue to emphasize that especially with the Family of Apps business being at the scale that it is.
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7 Replies
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Bedankt om te delen Luc.
Ik lees dat Zuckerberg glasses noemt als one of the bigger area’s that we’re investing in.
In dat geval begrijp ik dat de markt Meta’s investeringszucht afstraft. Ik kan me niet voorstellen dat dit zo populair wordt als smartphones en al helemaal niet dat overheden dit zomaar zullen laten passeren zonder strenge regulering.
Hun ambitie om de lead te nemen in AI lijkt me dan veel realistischer gezien hun immense databank en rekenkracht.
Een bescheiden mening uiteraard.
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Ik denk niet dat de afstraffing veel met de brillen te maken heeft. Ook niet met de licht tegenvallende outlook. Het zit hem puur in de oplopende kosten, die jagen beleggers de stuipen op het lijf omdat ze 2022 nog niet zijn vergeten.
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Begrijp ik, je kent het bedrijf ook veel beter dan ik.
Ik haal ‘glasses’ er in het bijzonder uit omdat Zuckerberg het noemt als antwoord op de vraag ‘Is there any way you could kind of use some of the Metaverse spend over into AI?’
Na het antwoord van Susan Li (op een andere vraag) volgt Zuckerberg: ‘Sure. And then on the question of shifting resources from other parts of the company, I would say broadly we actually are doing that in a lot of places in terms of shifting resources from other areas, whether it’s compute resources or different things in order to advance the AI efforts. For Reality Labs specifically, I mean, I’m still really optimistic about building these new computing platforms long-term. I mentioned in my remarks upfront that one of the bigger areas that we’re investing in, in Reality Labs is glasses.’
Ik begrijp hieruit dat Zuckerberg echt gelooft in een commerciële toekomst voor glasses. Ik betwijfel dit.
Opvallend is ook dat the Metaverse maar 1 keer wordt vernoemd in het interview, namelijk in de hierboven genoemde vraag van de analist. Zuckerberg en Li nemen spreken het woord zelfs niet uit. Twee jaar geleden werd Meta noch afgestraft omwille van de miljardeninvesteringen in the Metaverse. Het werd het nieuwe next big thing volgens Meta, maar veel aandeelhouders waren niet overtuigd. Sinds ChatGPT en AI is the Metaverse naar de achtergrond gedreven. De analist stelt volgens mij dan ook de juiste vraag. In zijn antwoord draait Zuckerberg echter rond de hete brij heen. Enkel ‘glasses’ noemt hij als concreet project. Dat vind ik opvallend.
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nog afgestraft en het woord nemen moet uit de zin. In mijn snelheid slordig geweest.
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Het is mij ook opgevallen dat de laatste kwartelen het woord Metaverse niet veel meer in de mond genomen wordt door Zuckerberg. Het is AI wat de klok slaat nu. Maar volgens mij zijn ze er wel nog steeds mee bezig alsook met AI en ik denk dan: laat hem lekker doen, ze hebben nog steeds operationele marges van 38% NA die investeringen!
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Bedankt Luc voor het berichtgeving over META.
Het bedrijf blijft mooie resultaten brengen, en cash creëren.
En investeren voor de toekomst, blijf geloven in het plan van Mark.
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Ik denk er net zo over. Laat die man toch wat investeren, hij heeft vaak genoeg bewezen dat hij daar heel goed in is. Prima resultaten, maar de oplopende kosten schiet de markt in het verkeerde keelgat blijkbaar.
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