On Wednesday, October 26, after the U.S. stock , social media and digital advertising giant Facebook, which renamed its parent company to the "Metaverse Platform" in October last year, released its third-quarter financial report for the 2022 fiscal year.
In the fierce competition such as macroeconomic adversity and TikTok, Meta's revenue fell year-on-year for the second consecutive quarter, and the second quarter recorded the first quarter's quarterly revenue decline year-on-year. The third quarter financial report showed that the revenue decline was accelerating.
As the number of active users in the application family exceeded expectations, Meta rose 8% after the market, and then quickly turned to a decline due to other financial indicators and poor guidance in the fourth quarter, falling nearly 20%. The stock price hit the lowest since 2016, reaching a lower of US$114 to the lowest since 2016. has analyzed that given the economic environment, Meta's spending is much higher than investors' expectations or considered appropriate, which is an important reason for its stock price plummeting.
Meta closed down 5.6% on Wednesday, approaching its low since the end of 2018, and has fallen by more than 61% this year. During the same period, the S&P 500 index fell about 20%, and the Nasdaq fell about 30%. This year may usher in the worst annual performance of Meta's stock price in history.
Due to intensified competition from TikTok and the change of privacy settings of Apple have affected Meta's advertising market share. Since the beginning of this year, the company's market value has evaporated by more than US$550 billion, and the stock price-to-earnings ratio has dropped to 11.4 times, ranking last among the large technology stock .
Meta for four consecutive quarters profit fell, and revenue fell year-on-year for two consecutive quarters. The revenue of the Meta universe was halved and the losses expanded
financial report shows that Meta's revenue in the third quarter was US$27.71 billion, a year-on-year decrease of 4%, and was inferior to the market's expectations of US$27.4 billion, a decline of 1% from the year-on-year decline in the second quarter.
adjusted EPS was $1.64 per share, far inferior to the expected $1.89, down 49% year-on-year, close to half. Net profit was US$4.395 billion, down 52% year-on-year, representing the company's profit declined for the fourth consecutive quarter, the first time since the fourth quarter of 2012.
Yuan Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Cosmic Co., Ltd. Revenues in the third quarter was US$285 million, down 49% year-on-year, and the market expects US$400 million. The operating loss was US$3.67 billion, compared with a loss of US$2.63 billion in the same period last year, and an expected loss of US$3.09 billion. The department has lost $9.4 billion in the first three quarters of this year, and lost more than $10 billion last year, which means the loss of the "metauniverse" bet will be deeper this year.
As the main advertising of Meta revenue comes from its social media and communications app family (Facebook, Instagram, Messenger, WhatsAppp and other services), the market focuses on key user growth data:
In the third quarter, the number of active users of Facebook's main program was 1.98 billion, the same as expected, an increase of 3% year-on-year, also higher than 1.97 billion in the second quarter. The more popular monthly active users were 2.96 billion, higher than the expected 2.94 billion, an increase of 2% year-on-year, and 2.93 billion in the second quarter. The full application family of
has 2.93 billion daily active users, an increase of 4% year-on-year, a significant increase from 2.88 billion in the second quarter, with monthly active users of 3.71 billion, a year-on-year increase of 4% year-on-year, and 3.65 billion in the second quarter.
But another core indicator that measures the ability of monetized user groups : average revenue per user (ARPU) was US$9.41, down 6% year-on-year, lower than the expected US$9.83 and lower than US$9.82 in the second quarter, reducing operating profit margin to 20% from 36% in the same period last year.
advertising revenue in the third quarter was US$27.24 billion, accounting for 98.3% of total revenue, higher than market expectations of 97.8%. Advertising revenue fell 3.7% year-on-year, better than the market's originally expected drop of nearly 5% to US$26.9 billion. Although ad impressions (ad impressions) in the app family increased by 17% year-on-year, the average unit ad price fell by 18% year-on-year.
The fourth quarter revenue guidance is poor, and the number of employees is expected to be the same as now at the end of next year. The loss of the Meta universe has increased significantly year-on-year
In addition to the third quarter financial report, the main indicators are poor, and the fourth quarter performance guidance given by Meta is also disappointing.
The company expects total revenue in the fourth quarter of this year to be in the range of US$30 billion to US$32.5 billion, the market's median is expected to be US$32.2 billion. The exchange rate fluctuations caused by the appreciation of the US dollar will drag down revenue by 7%. If calculated at a fixed exchange rate in the third quarter, revenue originally increased by 2% year-on-year.
cost and expenditure increased by 19% year-on-year to US$22.05 billion. The company expects total expenditure to be between US$85 billion and US$87 billion in 2022, which is lower than the previous expected range ceiling of US$88 billion. Among them, there were US$900 million additional fees related to office facilities in the fourth quarter.
expects total expenditure for the whole year of 2023 to be between $96 billion and $101 billion, including about $2 billion in fees related to the merged office space. "The continued rationalization of our office space will lead to increased costs in the short term."
company said that the number of employees at the end of 2023 is expected to remain the same as at the end of the third quarter of this year, and "significant changes are being made comprehensively to improve operational efficiency." As of September 30 this year, the number of employees was 87,300, and increased by 28% year-on-year.
revenue cost growth is expected to accelerate next year, driven mainly by infrastructure-related expenses, and is also related to the “Reality Labs hardware costs brought about by the launch of the next generation of consumer-grade Quest headsets later next year”.
Meta bluntly stated that although Reality Labs' operating losses in 2023 are expected to "grow significantly year-on-year", it will continue to accelerate investment in this business after 2023 so as to achieve the goal of increasing the overall operating profit of the branch from a long time.
In addition to continuing the "All IN" meta universe, the growth of artificial intelligence 's production capacity will also push up the growth rate of most capital expenditures in 2023. The company expects capital expenditure to be between $32 billion and $33 billion this year, up from previous expectations of $30 billion to $34 billion. Capital expenditure is expected to further expand to $34 billion to $39 billion in 2023 due to investment in data centers, servers and network infrastructure.
On the call, Meta founder and CEO Zuckerberg defended his strong investment in the development of the metaverse and AI, saying, "We are obviously doing some leading work that will lay the foundation for the next major computing platform."
After the departure of COO Sheryl Sandberg, who had been in office for 14 years a few weeks ago, David Wehner, who served as chief financial officer for the past 4 years, confirmed today that he would leave in April 11html, which widened the after-hours decline of Meta to 18%, losing to 107 USD .
Wall Street has doubts about the prospects of Meta this year and next two years. Heavyweight shareholders demanded to cut half of the investment in Meta
analysis pointed out that Wall Street is skeptical about the prospects of Meta this year and next two years.
company warned in February that changes to Apple's iOS operating system privacy rules will cost Meta about $10 billion in revenue in 2022. Meanwhile, Meta's massive investment in virtual reality and the "meta universe" has not yet paid off, and the short video Reels business, which tries to compete with TikTok, is still in the early stages of revenue generation, which means that the company's revenue growth will remain stalled in the short term. Internal files seen by
media show that Meta's Instagram users spend a total of 17.6 million hours watching Reels short videos every day, less than one-tenth of the 197.8 million hours spent on the platform every day.
, Meta's flagship meta-universe product for consumers, has less than 200,000 monthly active users, which is not only lower than the company's original target of 500,000 users by the end of this year, but also lower than the target of 280,000 after being cut and cut. The $1,500 Quest Pro VR headset launched in early October did not get much spark because it was too expensive and limited in use.
Before the third quarter report was released, Bank of America lowered the Meta rating from "buy" to "neutral", believing that the reduction in advertisers' budget in early 2023 will suppress market sentiment, increasing uncertainty for Apple's privacy rules changes and Reels' early monetization meta, and "in the recession scenario, there are generally some downside risks."
This week, CEO of shareholder Altimeter Capital, Brad Gerstner, issued an open letter asking Xiao Zha to lead Meta to "regain shareholder trust and retain technical talents." In addition to demanding a 20% reduction in cost, it also hopes to cut investment in Meta to $5 billion per year, which means heavyweight shareholders are increasingly dissatisfied with Meta's strategy of betting on Meta:
"Meta's core business, social media, is one of the world's largest and most profitable businesses, with operating profits exceeding $45 billion last year alone.In addition, Meta has industry-leading capabilities in key future technologies such as artificial intelligence and immersive 3D, which will help drive new products and future growth. Meta needs to cut costs to lose weight and refocus business focus. ”
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