Mark Zuckerberg, CEO, Meta Platforms, in July 2021.
Kevin Dietsch | Getty Images News | Getty Images
Meta will report first-quarter results after the bell Wednesday.
Here’s what analysts are expecting.
Earnings per share: $4.32, according to LSEG.
Revenue: $36.16 billion, according to LSEG.
Daily active users (DAUs): 2.12 billion, according to StreetAccount
Monthly active users (MAUs): 3.09 billion, according to StreetAccount
Average revenue per user (ARPU): $11.75 according to StreetAccount
Meta has been a favorite on Wall Street since early 2023, when CEO Mark Zuckerberg told investors it would be the “year of efficiency.” The stock almost tripled last year, trailing only Nvidia among members of the S&P 500, and is up another 40% in 2024.
The Facebook parent has been clawing back digital ad market share after a dismal 2022. At that time, the company was reeling from Apple’s iOS privacy update and macroeconomic concerns that led many brands to rein in spending.
Zuckerberg spearheaded an initiative to rebuild the ad business with a focus on artificial intelligence. On the company’s last earnings call in February, finance chief Susan Li said Meta has been investing in AI models that can accurately predict relevant ads for users, as well as tools that automate the ads-creation process.
Analysts expect Meta to report a 26% increase in revenue from $28.65 billion a year earlier. That would mark the fastest rate of growth since the third quarter of 2021, which was before Apple’s privacy change started to show up on other companies’ balance sheets.
Meta is benefiting from a stabilizing economy and surge in spending from Chinese discount retailers like Temu and Shein, which have been pumping money into Facebook and company-owned Instagram in an effort to reach a wider swath of users. Analysts at Baird said in a Monday note that slower spending from China-based advertisers could be a source of concern in the first-quarter results.
Still, the Baird analysts see continuing momentum for Meta, and said they have “reasonably high” expectations for the company because of its improving advertiser tools and success in short-form video monetization.
Investors will remain focused on Meta’s costs, which have been central to the stock rally. Early last year, Zuckerberg said the company would be better at eliminating unnecessary projects and cracking down on bloat, which would help Meta become a “stronger and more nimble organization.”
The company cut about 21,000 jobs in the first half of 2023, and Zuckerberg said in February of this year that hiring will be “relatively minimal compared to what we would have done historically.”
As of Dec. 31, Meta had a global workforce of 67,317, down from a peak of more than 87,000 employees in 2022, according to Securities and Exchange Commission filings.
Jefferies analysts wrote in a report last week that it’s “hard to argue with excellence.” The analysts expect Meta to beat on its first-quarter results and provide better-than-expected guidance for the second quarter. As of now, the average analyst estimate calls for revenue growth of 20% in the second quarter to $38.29 billion, according to LSEG.
“We continue to be encouraged by META’s ability to sustain double-digit rev growth, given the combination of higher engagement from AI investments, and increasing advertiser ROI & efficiency,” the Jefferies analysts wrote.
Meta’s Reality Labs unit, which houses the company’s hardware and software for development of the nascent metaverse, continues to bleed cash. Analysts expect the division to show an operating loss of $4.31 billion for the quarter, on top of the $42 billion it’s lost since the end of 2020. Revenue in the unit is projected to reach $512.5 million, a 51% increase from $339 million a year earlier.
Executives will discuss the company’s results on a call with analysts at 5 p.m. ET.
The company rolled out the Meta AI app in April, putting it in direct competition with OpenAI’s ChatGPT. But the tool has recently garnered some negative publicity and sparked privacy concerns over some of the wacky — and personal — prompts being shared publicly from user accounts.
Besides the mud wrestlers and Trump eating poop, some of the examples CNBC found include a user prompting Meta’s AI tool to generate photos of the character Hello Kitty “tying a rope in a loop hanging from a barn rafter, standing on a stool.” Another user whose prompt was posted publicly asked Meta AI to send what appears to be a veterinarian bill to another person.
“sir, your home address is listed on there,” a user commented on the photo of the veterinarian bill.
Prompts put into the Meta AI tool appear to show up publicly on the app by default, but users can adjust settings on the app to protect their privacy.
Here’s how to do it:
To start, click on your profile photo on the top right corner of the screen and scroll down to data and privacy. Then head to the “suggesting your prompts on other apps” tab. This should include Facebook and Instagram. Once there, click the toggle feature for the apps that you want to keep your prompts from being shared on.
After, go back to the main data and privacy page and click “manage your information.” Select “make all your public prompts visible only to you” and click the “apply to all” function. You can also delete your prompt history there.
Meta has beefed up its recent bets on AI to improve its offerings to compete against megacap peers and leading AI contenders, such as Google and OpenAI. This week the company invested $14 billion in startup Scale AI and tapped its CEO Alexandr Wang to help lead the company’s AI strategy.
The company did not immediately respond to a request for comment.
A One Medical clinic location is pictured in Emeryville, California on February 16, 2024.
Loren Elliott | The Washington Post | Getty Images
For the better part of a decade, Amazon has been trying to carve it’s way into the U.S. health-care market, through billions of dollars worth of acquisitions, big-name hires and high-profile partnerships. It’s been a slog at times, and the company’s long-term strategy hasn’t always been clear.
Following a series of executive departures, Amazon is now restructuring its health business, telling CNBC that Amazon Health Services will be divided into six new units, with a goal of creating a simpler structure.
As part of the effort, the company has tapped a number of longtime Amazon leaders and elevated some One Medical executives to oversee the divisions. Neil Lindsay, senior vice president of Amazon Health Services told CNBC in an interview that the company has been working on the overhaul for the past several months.
“Our leadership team has been focused on simplifying our structure to move faster and continue to innovate effectively,” Lindsay said in a video chat. “One of the problems we’re trying to solve is the fragmented experience for patients and customers that’s common in healthcare.”
Amazon said it hasn’t conducted broad layoffs as part of the changes.
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The reorganization comes after Amazon lost several senior health leaders in recent months. Dr. Vin Gupta, who joined in 2020 and served as chief medical officer of Amazon Pharmacy, left in February, followed by Trent Green, whose last day as CEO of Amazon’s primary care chain One Medical was in April.
Aaron Martin, vice president of health care at Amazon, announced internally last month that he plans to leave his role. Dr. Sunita Mishra, Amazon’s chief medical officer, also departed in May.
Mishra and Martin’s departures have not been previously reported, and neither responded to requests for comment. Amazon doesn’t plan on naming a new CEO of One Medical following Green’s departure.
Martin, who lives in Nashville, Tennessee, said in a memo to staffers that he’ll remain at Amazon “for a while” to help with the transition.
“I then plan to take some time off this summer and hang out with my wife and my kids, finally get a cover band going in Nashville, and then possibly do something new,” Martin wrote in the memo, which was shared with CNBC.
Ambitious efforts
Amazon has for years been on a mission to crack the multitrillion-dollar U.S. health-care industry, which is notoriously complex and inefficient.
While it had long served providers and others in health care with its cloud-based technology, Amazon’s first big splash directly into the market came in 2018 with the the acquisition of online pharmacy PillPack for about $750 million. Two years later, it launched its own offering called Amazon Pharmacy.
The company then bought One Medical for $3.9 billion in 2023, among its largest acquisitions ever, giving Amazon access to a chain of brick-and-mortar primary care clinics and a robust membership base.
There have been some major setbacks. The company shuttered its telehealth service, Amazon Care, in 2022. That came a year after it disbanded Haven, the joint health-care venture between Amazon, Berkshire Hathaway and JPMorgan Chase. The announcement of Haven in 2018 sent shockwaves through the medical world, pushing down shares of health-care companies on fears about how the combined muscle of leaders in technology and finance could wring costs out of the system.
In the areas where Amazon continues to operate, competition is fierce and, in the case of primary care, margins are very slim.
PillPack founders TJ Parker and Elliot Cohen, who left Amazon in 2022, recently launched a new health-care marketplace called General Medicine that will compete with Amazon. Mishra confirmed to STAT News that she advised the nascent startup. Amazon declined to comment on whether Mishra’s involvement with General Medicine was related to her departure.
Lindsay characterized the recent departures as part of the natural evolution of Amazon’s health business. He added that there’s “no shortage of depth of talent” within his organization.
“We’re a fast-evolving organization because the opportunity is so big,” Lindsay said.
Under its new structure, Amazon Health Services will be focused around the six groups, or what the company calls “pillars.”
One Medical Clinical Care Delivery, led by Dr. Andrew Diamond
One Medical Clinical Operations and Performance, led by Suzanne Hansen
AHS Strategic Growth and Network Development, led by John Singerling
AHS Store, Tech and Marketing, led by Prakash Bulusu
AHS Compliance, led by Kim Otte
AHS Pharmacy Services, led by John Love
Amazon declined to share financial figures for its health business, but Lindsay said it is seeing “very strong growth” across the offerings.
One Medical went public in 2020, and it was still losing money when it was bought by Amazon. At the end of 2022 in its last quarter as a standalone entity, it reported a net loss of $101.1 million on revenue of $272.4 million.
Since joining Amazon, One Medical has been working to open new offices in states including New Jersey, New York and Ohio.
Amazon said in January of 2024 that its pharmacy business “doubled the number of customers” it served in the past year, though it didn’t share specific figures. The company is opening pharmacies in 20 new cities this year, and about 45% of U.S. customers will be eligible for same-day medication delivery.
“If we can make one thing a little bit easier for a lot of people, we’ll save them a lot of time, a lot of money, and some lives,” Lindsay said. “And if we stack these changes up over time, it’ll feel like a reinvention.”
The electric vertical takeoff and landing vehicle, or eVTOL, company said Thursday it plans to use the financing to support new infrastructure and the rollout of an artificial intelligence-based aviation software platform. The money will also support its Launch Edition program, including an official partnership to provide air taxi services during the 2028 Olympics in Los Angeles.
Archer said the funding round included the sale of 85 million shares at $10 apiece and gives the company a pro forma liquidity position of roughly $2 billion.
“We now have the strongest balance sheet in the sector and the resources we need to execute both here in the U.S. and abroad,” said founder and CEO Adam Goldstein in a release. “Archer’s future couldn’t be any brighter.”
The stock offering comes after President Donald Trump recently signed an executive order that created a pilot program to support developing and deploying more eVTOL vehicles in the U.S. Shares of both Archer and competitor Joby Aviation rallied this week on the heels of the news.
Demand for eVTOL companies has ballooned in recent years as developers tout the technology’s ability to reduce emissions and cut down traffic congestion. The technology faces numerous regulatory and safety hurdles in the process.
Archer has already partnered with United Airlines to roll out an airport air taxi service. Last month, competitor Joby Aviation said it received the first $250 million from a $500 million contract with carmaker Toyota to support certifying and producing eVTOLs.
Archer is slated to display its Midnight eVTOL aircraft at the Paris Air Show this month. The United Arab Emirates will be the company’s first launch market.