Meta Platforms reports a strong Q1: find out more

Meta Platforms Inc (NASDAQ: META) is trading down in extended hours even though it reported market-beating financial results for its first quarter.

Meta stock down on muted revenue guidance

Investors are cautious because the tech behemoth was somewhat muted in terms of guidance for the future. Meta now forecasts its revenue to fall between $36.5 billion and $39 billion in Q2.

Analysts, in comparison, were at $38.3 billion. Mark Zuckerberg – the chief executive of $META said in the earnings report today:

It’s been a good start to the year. We’re seeing healthy growth across our apps and we continue making steady progress building the metaverse as well.

The Nasdaq-listed firm saw its operating margin improve by 1,300 basis points to 38% in the recently concluded quarter. Meta stock is now up close to 50% versus the start of 2024.

User growth and price per ad

Meta Platforms did particularly well in advertising this quarter with ad impressions up 20% and price per ad up 6.0% on average.

The social media giant ended the quarter with 3.24 billion daily active users (DAUs) – up a better-than-expected 7.0% versus last year. $META reported $11.20 in average revenue per person (ARPP) for the first quarter on Wednesday that did fall short of $11.75 expected.

On the downside, $META expects a material increase in losses attributed to Reality Labs in 2024, as per its press release today. The metaverse unit lost $3.85 billion in Q1 – well below $4.31 billion that experts had forecast.

Wall Street currently has a consensus “buy” rating on the company based out of Menlo Park, California.

Watch here: https://www.youtube.com/embed/XXF1tbo-ECk?feature=oembed

Notable figures in Meta Q1 earnings release

• Earned $12.37 billion versus the year-ago $5.70 billion
• Per-share earnings also more than doubled from $2.20 to $4.71
• Revenue went up 27% year-over-year to $36.46 billion
• Consensus was $4.32 a share on $36.16 billion in revenue

Meta now forecasts up to $40 billion in CAPEX this year – up from its prior guidance of $30 billion to $37 billion. The multinational also confirmed that capital expenditures will increase further in 2025 as it continues to invest aggressively in AI. According to CEO Zuckerberg:

The new version of Meta AI with Llama 3 is another step towards building the world’s leading AI.

Llama-3 working so well at 32k context with no training is a bit surprising to me at least. Not only because it has “perfect recall” (needle in a haystack) but because it’s able to follow instructions even when the context is very long and contains multiple documents

— anton (@abacaj) April 24, 2024

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