Earnings report sharing/META revenue exceeds expectations! But the guidance fell short of expectations and the stock price suffered?

$Meta Platforms(META.US) announced its Q1 2024 earnings after the market closed on April 24th. The data showed a 27% year-over-year revenue growth, with EPS exceeding expectations at $4.32. However, the stock price plummeted in after-hours trading! What other data is there? Let's take a look together!

Q1 2024

Revenue increased 27% year-over-year to $36.455 billion, compared to $40.11 billion last quarter, surpassing market expectations of $36.16 billion.

By segment:

The FAMILY APP segment saw a 27% year-over-year revenue increase to $36.015 billion, with its core advertising business growing 27% to $35.635 billion, up from $38.706 billion last quarter, showing improved growth momentum.

Operating profit for the FAMILY APP segment surged 57% year-over-year to $17.66 billion, compared to $21.03 billion last quarter.

The REALITY LABS segment, responsible for AR and VR technologies, reported a 30% year-over-year revenue increase to $440 million, down from $1.07 billion last quarter.

Operating losses for this segment narrowed to $3.846 billion from $4.65 billion last quarter.

EPS grew 114% year-over-year to $4.71, compared to $5.33 last quarter, exceeding market expectations of $4.32.

Starting this quarter, Meta will no longer disclose Facebook's daily active users (DAU) and monthly active users (MAU). Instead, it will report the daily active people (DAP) for the entire FAMILY OF APPS, using ad volume and average ad price to reflect operational efficiency.

FAMILY OF APPS operational data:

DAP reached 3.24 billion this quarter.

Average revenue per user (ARPU) was $11.20.

Ad impressions increased 20% year-over-year, with the Asia-Pacific region being the fastest-growing, up 28%.

Average ad price rose 6% year-over-year, with growth in all regions except Asia-Pacific.

Total costs and expenses increased 6% year-over-year to $22.64 billion.

Operating profit surged 91% year-over-year to $13.818 billion, compared to $16.38 billion last quarter.

Operating margin improved to 38% from 25% year-over-year, compared to 41% last quarter.

Net profit soared 117% year-over-year to $12.369 billion, compared to $14.02 billion last quarter and $11.58 billion the quarter before.

Future Expectations

Next quarter's revenue is projected at $36.5-$39 billion, representing approximately 18% year-over-year growth, below market expectations of $38.3 billion.

Full-year total expenses are expected to be $96-$99 billion, up from the previous forecast of $94-$99 billion.

Capital expenditures are projected to increase to $35-$40 billion from the previous estimate of $30-$37 billion.

Summary

This quarter's 27% revenue growth was driven by the advertising business, with the core advertising segment within FAMILY OF APPS showing accelerated growth compared to last quarter and reaching a two-year high. The average ad price also increased 6% year-over-year, marking two consecutive quarters of growth, indicating a recovery in the advertising market after seven consecutive quarters of decline. Notably, ad impressions surged in the Asia-Pacific region, primarily due to heavy spending by emerging platforms like TEMU and SHEIN on Facebook and Instagram to attract international users. E-commerce and gaming also contributed to a 41% year-over-year increase in ad revenue in the region, making it the fastest-growing market. As for the RL segment, although losses narrowed this quarter, Meta expects significantly higher losses for the year compared to last year.

Meta stated that this quarter's performance was solid, with growth across its apps and steady progress in metaverse development. The company plans to allocate more resources to AI-related projects while maintaining efficiency in other areas. Market research indicates that as the global advertising market recovers, Meta's ad business rebounded strongly in the second half of last year. Given the current digital advertising landscape, double-digit growth is expected this year, allowing Meta to maintain and potentially expand its market leadership.

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