Meta’s Q1 2023 report exceeded analysts’ expectations
Meta’s report for the first quarter of 2023 showed positive changes in revenue, which increased by 3% compared to the previous year, reaching $28.67 billion. However, the company’s operating and net profits decreased by 15% and 24%, respectively. EPS also decreased by 19% to $2.20. Investors responded positively to the report, causing the company’s shares to rise by 11% to $233.
According to Meta’s CFO, Susan Li, the Chinese market influenced the increase in revenue, as the company witnessed increased activity among advertisers in China targeting users and other markets.This heightened interest in advertising by Chinese advertisers can be attributed to the lifting of COVID restrictions in China and a decrease in delivery costs.
Furthermore, Meta has been focusing more on practical issues, including the online advertising market, rather than its massive metaverse project, which is currently causing significant losses. The company has also intensified its efforts in developing artificial intelligence after the success of ChatGPT. This year, the company also continues to reduce costs, planning to lay off an additional 21,000 employees.
In the short video market, Meta faces growing competition from TikTok. Nevertheless, the company’s CEO, Mark Zuckerberg, named Reels, the company’s short video product, as one of the reasons for the increase in sales.
Overall, while the report for the first quarter was better than expected, the company still faces challenges and is working to improve its performance.
Table: Key Results of Meta’s Report for Q1 2023
| Metric | Value | Change from Previous Year |
|---|---|---|
| Revenue | $28.67 billion | ↑ 3% |
| Operating Profit | $7.23 billion | ↓ -15% |
| Net Profit | $5.71 billion | ↓ -24% |
| EPS | $2.20 | ↓ -19% |
Meta’s report for Q1 2023 shows that the company’s revenue increased by 3% to $28.67 billion (the first revenue increase in three quarters). However, the company’s operating profit decreased by 15%, and net profit decreased by 24%. The company is cutting costs, planning to lay off 21,000 employees. The company is finding opportunities for growth, including the Chinese market and the development of artificial intelligence. Overall, the company is focused on efficiency and growth in practical areas, such as online advertising and short video formats, particularly thanks to the Reels product.
Financial report of Meta* for Q1 2023:
| Indicator | Value | Analysts’ Forecast | % Change |
|---|---|---|---|
| Earnings per share | $2.20 | $2.03 | +8.4% |
| Revenue | $28.67 billion | $27.64 billion | +3.7% |
| DAU | 2.04 billion | 2.01 billion | +1.5% |
| MAU | 2.99 billion | 2.99 billion | 0% |
| ARPU | $9.62 | $9.30 | +3.4% |
Report comments:
- Meta*’s Q1 2023 revenue increased by 3% YoY, leading to a 12% growth in shares.
- Earnings per share were $2.20, 8.4% higher than analysts’ expectations.
- Daily active users (DAU) were 2.04 billion, surpassing forecasts by 1.5%.
- Monthly active users (MAU) were as expected.
- Average revenue per user (ARPU) was $9.62, exceeding forecasts by 3.4%.
- Forecasts for Q2 2023 were also lower than the company’s expectations, which may lead to additional growth in Meta* shares.
Analytical conclusion. What are the growth prospects for Meta company?
Based on the published financial results of Meta* company for the first quarter of 2023, it can be concluded that the company showed good financial results, surpassing analysts’ expectations. Revenue for the quarter grew by 3% year-on-year after three quarters of decline, indicating the company’s recovery after several difficult years. This was made possible by increasing the efficiency of the company and increasing the user community. The company’s forecast for the second quarter also exceeds analysts’ forecasts, which could have an impact on the growth of Meta* shares in the future. Overall, the company continues to strengthen its position in the market and engage in long-term development.
