Meta Saved Face With Impressive Earnings

Meta Saved Face With Impressive Earnings

about 1 year ago2 mins

Mentioned in story

Meta reported impressive results late on Wednesday, surprising investors and breaking a streak of bad showings.

What does this mean?

Meta’s investors probably got spooked this week, when Snap – another ad-dependent social media giant – forecasted its first ever quarterly dip in revenue. But Meta ultimately bucked the trend, with monthly active users across its platforms growing by 4% and hitting over 3.7 billion last quarter – almost half the world’s population. And the firm not only added more users, it also made more money than expected per active user – thanks in part to its AI investments helping to improve user feeds. In the end, then, overall revenue might’ve fallen for the third straight quarter but it still blew past expectations, and that just got the party started. Meta also announced a $40 billion stock buyback program, and reassured investors with predictions of decent revenue this quarter and by lowering expense forecasts for the whole year, which sent shares popping 19%.

Meta revenue per user

Why should I care?

The bigger picture: Coming cuts.

Tech companies like Meta have been busy with their scissors lately, desperately trying to trim costs ever since demand started going slack. At this stage, more than 100,000 jobs have disappeared in the sector. But Bank of America’s strategists have just finished crunching the numbers, and they reckon tech companies are still 20% too big on average. So if you were laid off recently, don’t worry – your smug former colleagues aren’t in the clear yet either.

Zooming out: Of little interest.

The Federal Reserve's (the Fed) interest rate hikes have been one key factor putting a damper on demand recently, but with inflation finally cooling, the central bank’s easing off the gas. That much was clear when Wednesday’s hike came in at a dainty 0.25 percentage points. Still, it won’t be the last of its kind: the Fed warned ongoing increases are still needed to keep inflation under control…

Fed rate hike
Source: The Wall Street Journal
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG