Meta reports better-than-expected results and issues optimistic guidance for third quarter
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., left, arrives at federal court in San Jose, California, US, on Tuesday, Dec. 20, 2022.
David Paul Morris | Bloomberg | Getty Images
Meta reported earnings and revenue for the second quarter that topped analysts’ estimates and issued a better-than-expected forecast for the current period, reflecting a rebound in the digital advertising market.
The stock rose about 5% in extended trading.
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Here are the results.
- Earnings: $2.98 per share vs. $2.91 expected by Refinitiv.
- Revenue: $32 billion vs. $31.12 billion expected by Refinitiv.
Wall Street is also focused on these numbers in the report:
- Daily Active Users (DAUs): 2.06 billion vs 2.04 billion expected, according to StreetAccount.
- Monthly Active Users (MAUs): 3.03 billion vs 3 billion expected, according to StreetAccount.
- Average Revenue per User (ARPU): $10.63 vs $10.22 expected, according to StreetAccount.
Revenue increased 11% from a year earlier, the first time the company has reported double-digit growth since the end of 2021. Prior to the first quarter, revenue had declined in three straight periods as the company reckoned with a sputtering economy and Apple’s iOS privacy change, which limited ad targeting capabilities.
The company said revenue in the third quarter will be $32 billion to $34.5 billion. Analysts polled before the report were expecting third-quarter sales of $31.3 billion, according to Refinitiv. That suggests growth of at least 15% from a year earlier.
Investors have been riding the Meta wave in 2023, expecting a rebound in the ad market and better profitability following the company’s mass layoffs. Prior to Wednesday’s close, the stock was up 159% this year, compared to the 19% advance in the S&P 500. Meta shares lost about two-thirds of their value last year.
“We had a good quarter,” Meta CEO Mark Zuckerberg said in a statement. “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.”
Net income rose to $7.79 billion, or $2.98 a share, from $6.69, or $2.46 a share, a year earlier.
Meta said its total costs and expenses were $22.61 billion in the second quarter, which is an increase of 10% from the same period a year ago.
Zuckerberg has been pushing for Meta to become more efficient, instituting a cost-savings plan that resulted in about job cuts. The plan appears to be working.
The company is now forecasting capital expenditures for 2023 of $27 billion to $30 billion, down from a prior estimate of $30 billion to $33 billion.
“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,” the company said.
Expenses in 2024 are expected to grow due to investments in data centers and AI, Meta said.
Total headcount declined 14% year-over-year to 71,469, with the company adding that “approximately half of the employees impacted by the 2023 layoffs are included in our reported headcount as of June 30, 2023.”
Meta now says it plans to spend more on payroll expenses as the company evolves its “workforce composition toward higher-cost technical roles,” suggesting that some staffers who are shifted to certain technical roles could earn more money.
Meta’s Reality Labs unit, tasked with developing the metaverse, brought in $276 million in sales during the second quarter while recording a loss of $3.7 billion. Meta said that those losses will continue to “increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem.”
Executives will discuss the results on a call with analysts starting at 5 p.m. ET.
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Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.
The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”
Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.
Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.
The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.
Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.
Bloomberg News first reported about the new superintelligence unit.
Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.
Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Joby Aviation stock soared about 12% as the flying air taxi maker got closer to launching a service in the United Arab Emirates.
The electric vertical takeoff and landing, or eVTOL, company said Monday that it delivered its first aircraft to the UAE and has completed piloted flight tests as it readies for a 2026 launch in the region.
“Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide,” said founder and CEO JoeBen Bevirt in a release. He called the Middle East nation a “launchpad for a global revolution in how we move.”
Joby’s planned launch in the UAE was announced in February 2024 as part of an agreement with Dubai’s Road and Transport Authority. The deal included exclusive rights to conduct air taxi service in Dubai for six years.
As part of the project, Joby said in November that it began building one vertiport at Dubai International Airport, with three additional locations slated for Palm Jumeirah and Dubai’s downtown and marina. Joby also announced an air taxi agreement with three Abu Dhabi government departments in 2024.
The California-based company has made other expansion moves in the Middle East. Shares jumped earlier this month after Saudi Arabian firm Abdul Latif Jameel announced a roughly $1 billion investment for up to 300 eVTOLs. The firm participated in Joby’s Series C funding round.
Joby shares have surged more than 32% this year, swelling its market capitalization to over $9 billion.
Demand for air taxis, which take off and land similar to helicopters, has gained momentum in recent years. The service faces regulatory and safety hurdles but has been lauded for its ability to cut traffic congestion and slash emissions.
Earlier this month, President Donald Trump signed an executive order that included a pilot program for testing electric air taxis.
Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.
Joe Raedle | Getty Images
Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.
CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.
“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”
The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.
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