Facebook's Parent Company Soars in Pre-Market Trade
Following the report, Meta Platforms, the parent company of Facebook, saw its stock price increase by over 11% during pre-market trading on Thursday.
Q1 Earnings Surpass Analysts' Forecasts
Facebook posted earnings per share (EPS) of $2.20 on revenue of $28.65 billion, outperforming analyst expectations of an EPS of $2.02 on revenue of $27.61 billion, as polled by Investing.com.
Efficiency Pledge and Advertising Revenue Growth
The impressive results come as Meta Platforms continues to deliver on its 2022 'year of efficiency' commitment while also experiencing growth in advertising revenue.
Reduction in Headcount and Restructuring Initiatives
The company's headcount decreased 1% year-on-year to 77,114 in Q1. Meta Platforms stated it has "substantially completed the 2022 employee layoffs" and is still evaluating facility consolidation and data center restructuring plans.
Advertising Revenue and User Metrics Increase
Year-on-year advertising revenue climbed from $27.00 billion to $28.10 billion in Q1, with daily active users (DAUs) rising 4% to 2.04 billion and monthly busy people (MAUs) growing 2% to 2.99 billion.
Ad Impressions Rise, but Average Price Drops
Ad impressions across Meta Platforms' apps surged 26%, while the average price per ad dipped 17% year-on-year due to heightened competition.
Q2 Revenue Guidance Exceeds Wall Street Expectations
Meta Platforms provided Q2 revenue guidance between $29.5 billion and $32 billion, surpassing Wall Street's estimate of $29.47 billion.
2023 Revenue Forecast and Reality Labs Losses
The company projects its 2023 revenue to range from $86 billion to $90 billion and anticipates Reality Labs operating losses to grow year-over-year in 2023.
Goldman Sachs and JPMorgan Raise Price Targets
Goldman Sachs analysts increased their price target for Meta Platforms to $300 from the previous $245. In contrast, JPMorgan analysts raised their target by $35 to $305 as revenue growth accelerates towards double digits. Both analysts noted Meta's strong positioning in long-term growth areas like AI.