On Wednesday, July 31st, in post-market trading, the social media and digital advertising giant that bets big on AI on the metaverse platform.$Meta Platforms (META.US)$Announced its financial results for the second quarter of 2024.
According to the financial report, Meta's total revenue in the second quarter was $39.071 billion, a 22% increase from the same period last year, and a 23% increase calculated at fixed exchange rates. Net income was $13.465 billion, up 73% from $7.788 billion in the same period last year. After the financial report was released, Meta's stock price rose, and at the time of writing, it had risen nearly 7% before the market opened.
What a pleasant surprise! Meta's financial data exceeded expectations, with AI driving advertising revenue growth.
Looking at the main financial data, Meta's revenue, earnings per share, and third-quarter revenue guidance have all exceeded market expectations, and this quarter's capital expenditures are lower than market expectations. The financial data is impressive:
In Q2, the revenue was $39.07 billion, up 22% from the same period last year, better than the expected $38.337 billion. This is the fourth consecutive quarter of over 20% year-on-year growth in Meta's revenue.
Q2 earnings per share were $5.16, up 73% year on year, better than the expected $4.74 per share;
Third-quarter revenue guidance is $38.5-41 billion, with a midpoint of $39.75 billion, higher than analysts' previous expectations of $39.1 billion.
In Q2, capital expenditure was $8.47 billion, lower than the market's expected $9.45 billion, up 26% QoQ; the expected full-year capital expenditure in 2024 is $37 billion to $40 billion, previously expected to be $35 billion to $40 billion.
The daily active users (DAU) of each application family have also increased slightly, with a year-on-year increase of 7% to 3.27 billion this quarter.
Looking at the business segments, the core business digital advertising revenue maintained strong growth under the assistance of AI technology and became a highlight of this financial report:
Q2 advertising revenue was $38.33 billion, up 21.7% year-on-year, higher than the market's expected $37.57 billion. Compared with a growth rate of 27% in the first quarter, the proportion in total revenue remained at about 98%.
"Metaverse" Reality Lab Q2 revenue was $0.353 billion, an increase of nearly 28% year-on-year, lower than the market's expectations. Operating losses were $4.49 billion, compared with losses of $3.74 billion in the same period last year, but the losses were less than market expectations.
Meta claims that AI technology has made a significant contribution to advertising revenue growth. The company has always used artificial intelligence to improve the precision targeting and ROI of ads. As Meta's advertising business has always been highly valued by the market, this momentum also demonstrates Meta's strength in AI monetization and is a major driver of the stock price rise after this earnings release.
At the same time, Meta's advertising revenue also outperformed competitors such as Google. Google's reported advertising business growth was only 11% year-on-year, and YouTube's ad sales fell short of expectations.
Continuing to invest heavily in AI, but not hindering profit growth.
Like other tech giants, Meta also invested heavily in AI, pouring a lot of money into data center infrastructure and computing resources. Previously, Microsoft and Google's capital expenditure plans were not particularly well-received on Wall Street, so Meta's returns on investment in AI have also become a focus of attention in this financial report.
Fortunately, Meta did not have an unexpectedly high capital expenditure plan this time, and its core business maintained steady growth, which to a certain extent dispelled Wall Street's concerns.
Of course, in the long run, Meta will continue to burn money on cutting-edge technologies such as artificial intelligence, virtual reality and augmented reality. However, the company is very confident in the prospects of its AI development.
CEO Zuckerberg said: "We had a strong performance quarter, and Meta AI is expected to become the most widely used AI assistant in the world by the end of this year...We have released the first cutting-edge open source AI model, our Ray-Ban Meta AI glasses continue to gain traction, and we are driving good growth in our applications."
Previously, Meta officially released Llama 3.1 and claimed that the model is currently the "most powerful open source baseline model", which has confronted the closed-source OpenAI and caused praise from Wall Street, with large institutions such as Jefferies believing that the open source model will make Meta AI's leadership position ahead of competitors in terms of leading.
Seeking Alpha analyst Julian Lin said, "After yesterday's panic at Pinterest, the market seems to have taken a breath of relief, with Meta's guidance exceeding market expectations while still showing amazing profit margin growth." Meta "continues to actively invest in Reality Labs and its artificial intelligence infrastructure, but this obviously has not hindered profit growth or stock buyback plans."
Editor/new