Meta Platforms jumps 6% on earnings beat, advertising resilience
Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
David Paul Morris | Bloomberg | Getty Images
Meta Platforms shares jumped more than 6% Thursday after the company topped earnings expectations and showed advertising resilience in a murky macroeconomic environment.
“Key here is that Meta’s adv. demand trends appear to be relatively healthy and while we’re watching for any impacts from macro and lower spend from China-based advertisers given the de minimis change, Meta’s scale of users and advertisers + focus on newer products are offsetting some macro challenges,” wrote Citi’s Ronald Josey.
First-quarter revenues grew 16% from a year ago to $42.31 billion and topped a $41.10 billion estimate from LSEG. Earnings came in at $6.43 per share, versus the $5.28 per share expectation. Net income reached $16.64 billion, jumping 35% from $12.37 billion in the year-ago quarter.
The company also issued in-line guidance for the current period. Meta’s finance chief Susan Li said the company expects sales to range between $42.5 billion and $45.5 billion. Analysts polled by LSEG had forecast $44.03 billion in revenues.
“Our business is also performing very well, and I think we’re well positioned to navigate the macroeconomic uncertainty,” Meta CEO Mark Zuckerberg reassured analysts on an earnings call Wednesday.
Investors this earnings season are watching for signs that President Donald Trump‘s tariff blit hampering advertising demand — where many technology businesses make up a sizeable chunk of revenues. Snap and Google have already warned of potential headwinds to their ad businesses.
Advertising revenue for the first quarter came in at $41.39 billion, topping a forecast of $40.44 billion from Wall Street. But Li told analysts that Meta has “seen some reduced spend in the U.S. from Asia-based e-commerce exporters,” which may stem from the ending of the de minimis trade loophole on Friday.
“The digital ad market is likely to get a bit jittery over coming months, but META’s performance orientation and significant AI ad investments should mean continued relative share gains against the field,” wrote Barclays analyst Ross Sandler.
Meta also upped its capital expenditures range to $64 billion to $72 billion from $60 billion to $65 billion to reflect more data center investments in artificial intelligence and a potential uptick in infrastructure hardware costs as trade uncertainty continues.
Bernstein’s Mark Shmulik called the hike in spending a “bold strategy” against an uncertain macroeconomic backdrop, but called Meta the “safest and most exciting dodgeball team around.”
“We continue to believe that Meta is well positioned for a tougher macro environment given its scaled advertiser base, highly performant platform, & vertical agnostic inventory,” wrote JPMorgan’s Doug Anmuth.
WATCH: Meta is showing tangible examples of AI investment, says Deepwater’s Gene Munster
Technology
Figure AI sued by whistleblower who warned that startup’s robots could ‘fracture a human skull’
Startup Figure AI is developing general-purpose humanoid robots.
Figure AI
Figure AI, an Nvidia-backed developer of humanoid robots, was sued by the startup’s former head of product safety who alleged that he was wrongfully terminated after warning top executives that the company’s robots “were powerful enough to fracture a human skull.”
Robert Gruendel, a principal robotic safety engineer, is the plaintiff in the suit filed Friday in a federal court in the Northern District of California. Gruendel’s attorneys describe their client as a whistleblower who was fired in September, days after lodging his “most direct and documented safety complaints.”
The suit lands two months after Figure was valued at $39 billion in a funding round led by Parkway Venture Capital. That’s a 15-fold increase in valuation from early 2024, when the company raised a round from investors including Jeff Bezos, Nvidia, and Microsoft.
In the complaint, Gruendel’s lawyers say the plaintiff warned Figure CEO Brett Adcock and Kyle Edelberg, chief engineer, about the robot’s lethal capabilities, and said one “had already carved a ¼-inch gash into a steel refrigerator door during a malfunction.”
The complaint also says Gruendel warned company leaders not to “downgrade” a “safety road map” that he had been asked to present to two prospective investors who ended up funding the company.
Gruendel worried that a “product safety plan which contributed to their decision to invest” had been “gutted” the same month Figure closed the investment round, a move that “could be interpreted as fraudulent,” the suit says.
The plaintiff’s concerns were “treated as obstacles, not obligations,” and the company cited a “vague ‘change in business direction’ as the pretext” for his termination, according to the suit.
Gruendel is seeking economic, compensatory and punitive damages and demanding a jury trial.
Figure didn’t immediately respond to a request for comment. Nor did attorneys for Gruendel.
The humanoid robot market remains nascent today, with companies like Tesla and Boston Dynamics pursuing futuristic offerings, alongside Figure, while China’s Unitree Robotics is preparing for an IPO. Morgan Stanley said in a report in May that adoption is “likely to accelerate in the 2030s” and could top $5 trillion by 2050.
Read the filing here:
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