Meta Platforms Inc. experienced a notable surge in its stock price during extended trading on Wednesday, following the release of its latest financial results that surpassed Wall Street’s expectations. The company’s impressive performance was driven by significant revenue and profit figures, alongside a positive forecast for the upcoming quarter.
In its recent earnings report, Meta disclosed earnings of $5.16 per share, exceeding analyst predictions of $4.73. Additionally, the company reported a revenue of $39.07 billion, which also surpassed the anticipated $38.31 billion. This strong showing reflects Meta’s ongoing commitment to investing heavily in areas such as artificial intelligence and virtual reality, which are increasingly becoming focal points for investors.
For the third quarter, Meta provided guidance indicating expected revenues between $38.5 billion and $41 billion, with a midpoint estimate of $39.75 billion. This forecast is slightly above the analysts’ expectations, which were centered around a figure of $39.1 billion.
During the second quarter, Meta achieved a remarkable revenue growth of 22% compared to the same period last year, where revenue stood at $32 billion. This marks the fourth consecutive quarter where the company has reported growth exceeding 20%. Furthermore, Meta’s net income saw a substantial increase of 73%, rising to $13.47 billion from $7.79 billion, translating to earnings of $2.98 per share in the previous year.
The results underscore Meta’s continued expansion in the digital advertising sector, a core component of its business model. Advertising revenue, primarily generated through the Facebook and Instagram platforms, rose by 22% year-over-year. In contrast, Alphabet, one of Meta’s key competitors, reported an 11% increase in Google ad sales, with YouTube’s performance falling short of expectations.
Meta’s total expenses for the second quarter were reported at $24.2 billion, which included a significant charge related to the company’s settlement of a facial recognition data lawsuit in Texas, amounting to $1.4 billion. The company also noted capital expenditures of $8.47 billion for the quarter, which were below analysts’ projections of $9.51 billion.
Despite these expenses, Meta has maintained its expense outlook for the year, projecting total costs between $96 billion and $99 billion. However, the company has refined its capital expenditure forecast, now estimating a range of $37 billion to $40 billion, compared to a previous low estimate of $35 billion.
In terms of user engagement, Meta reported 3.27 billion daily active users (DAUs) across its platforms during the quarter, aligning with StreetAccount estimates. This figure reflects the total number of individuals accessing any of Meta’s applications, marking a significant milestone for the company.
Overall, Meta’s financial performance and strategic investments in innovative technologies signal a robust outlook for the company as it continues to adapt to the evolving digital landscape and maintain its competitive edge in the advertising market.
