META Q1 2023 Earnings

Call Details

• Call Title: Meta Platforms, Inc. Q1 2023 Earnings Call
• Date: April 26, 2023 at 9:00 PM UTC
• Management Team:
  • Deborah Crawford (Vice President of Investor Relations)
  • Mark Zuckerberg (Chief Executive Officer)
  • Susan Li (Chief Financial Officer)

Call Summary

Financial Performance

• Q1 total revenue was $28.6B, up 3% year over year or up 6% on a constant currency basis.
• Q1 total expenses were $21.4B, up 10% year over year.
• Q1 operating income was $7.2B, representing a 25% operating margin, and net income was $5.7B or $2.20 per share.
• Capital expenditures including principal payments on finance leases were $7.1B in Q1, and free cash flow was $6.9B.
• The company repurchased $9.2B of Class A common stock in Q1 and ended the quarter with $37.4B in cash and marketable securities.
• Family of Apps revenue was $28.3B, up 4% year over year, with ad revenue of $28.1B up 4% year over year (up 7% on a constant currency basis).
• Facebook DAUs were 2.04B, up 4% year over year, and DAUs represented approximately 68% of 2.99B MAUs in March.
• Family of Apps other revenue was $205M, down 5% year over year, and Family of Apps operating income was $11.2B with a 40% operating margin.
• Reality Labs revenue was $339M, down 51% year over year, Reality Labs expenses were $4.3B, and Reality Labs operating loss was $4.0B.
• Total ad impressions increased 26% year over year while average price per ad declined 17% year over year.

Guidance

• Second quarter 2023 total revenue is expected to be in the range of $29.5B to $32.0B.
• The Q2 guidance assumes foreign currency headwinds will be less than 1% to year-over-year total revenue growth based on current exchange rates.
• Full year 2023 total expenses are expected to be $86B to $90B, updated from the prior outlook provided in March.
• The full year expense outlook includes $3B to $5B of restructuring costs related to facilities consolidation, severance, and other personnel costs.
• Capital expenditures for full year 2023 are expected to be $30B to $33B, unchanged from the prior estimate.
• Absent changes to U.S. tax law, the full year 2023 tax rate percentage is expected to be around 20%.
• The company expects Reality Labs operating losses to increase year over year in 2023.