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Meta Platforms:Quarterly Results/2024 Q3: Difference between revisions
Meta Platforms:Quarterly Results/2024 Q3 (view source)
Revision as of 14:05, 31 October 2024
, 31 October 2024→Earnings call summary
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*Li couldn't exactly quantify how they are deploying AI to help with productivity. "On the use of AI and employee productivity, it's certainly something that we're very excited about. I don't know that we have anything particularly quantitative that we're sharing right now. I think there are different efficiency opportunities with AI that we've been focused on in terms of where we can reduce costs over time and generate savings through increasing internal productivity in areas like coding for example, it's early, but we're seeing a lot of adoption internally of our internal assistant and coding agent. And we continue to make Llama more effective at coding, which should also make this use case increasingly valuable to developers over time. There are also places where we hope over time that we'll be able to deploy these tools against a lot of our content moderation efforts to help make the big body of content moderation work that we undertake to help it make it more efficient and effective for us to do so." | *Li couldn't exactly quantify how they are deploying AI to help with productivity. "On the use of AI and employee productivity, it's certainly something that we're very excited about. I don't know that we have anything particularly quantitative that we're sharing right now. I think there are different efficiency opportunities with AI that we've been focused on in terms of where we can reduce costs over time and generate savings through increasing internal productivity in areas like coding for example, it's early, but we're seeing a lot of adoption internally of our internal assistant and coding agent. And we continue to make Llama more effective at coding, which should also make this use case increasingly valuable to developers over time. There are also places where we hope over time that we'll be able to deploy these tools against a lot of our content moderation efforts to help make the big body of content moderation work that we undertake to help it make it more efficient and effective for us to do so." | ||
*Zuckerberg also said in the Q&A that open source will help them to lower costs since researchers are likely to find ways of doing things more efficiently. | *Zuckerberg also said in the Q&A that open source will help them to lower costs since researchers are likely to find ways of doing things more efficiently. | ||
*Zuckerberg said there are opportunities for AI to help people create content (Q&A). So they are going to add a new category such as AI generated or AI summarized content. | |||
*Li said in the Q&A that at the moment they are focusing on consumer experience in Meta AI and not monetization. | |||
=== Capital expenditures and total expenses === | === Capital expenditures and total expenses === | ||
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* Li couldn't comment on the headcount growth in 2025. "So we don't have specifics to share about headcount growth in 2025," she said. She, however, pointed out that they continue to push for efficiency in the company. "We're really focused across the company on our efficiency efforts broadly and making sure that we feel like we're continuing to push the whole company, including areas in which we expect that we will be making additional headcount investments to think about how they can be more efficient in 2025 than they were in 2024." | * Li couldn't comment on the headcount growth in 2025. "So we don't have specifics to share about headcount growth in 2025," she said. She, however, pointed out that they continue to push for efficiency in the company. "We're really focused across the company on our efficiency efforts broadly and making sure that we feel like we're continuing to push the whole company, including areas in which we expect that we will be making additional headcount investments to think about how they can be more efficient in 2025 than they were in 2024." | ||
* Li said in the Q&A that the step up in capex in Q4 compared to Q3 is due to the timing effects and the lumpiness quarter-to-quarter. "The expected step up in Q4 CapEx from Q3 is that part of that comes from increases in server spend and to a lesser extent data center CapEx, but with servers, there are these timing dynamics at play that you referred to because we had these server deliveries that landed late in Q3, and so the cash doesn't go out the door basically till Q4, and that's when you'll see the CapEx show up. And given the nature of capital expenditures generally, there is some actually quite a bit of lumpiness quarter-to-quarter. So it's a little bit hard to sort of extrapolate from any particular quarter. Overall, I'd say we're growing our infrastructure investments significantly this year, and we expect significant growth again in 2025" | * Li said in the Q&A that the step up in capex in Q4 compared to Q3 is due to the timing effects and the lumpiness quarter-to-quarter. "The expected step up in Q4 CapEx from Q3 is that part of that comes from increases in server spend and to a lesser extent data center CapEx, but with servers, there are these timing dynamics at play that you referred to because we had these server deliveries that landed late in Q3, and so the cash doesn't go out the door basically till Q4, and that's when you'll see the CapEx show up. And given the nature of capital expenditures generally, there is some actually quite a bit of lumpiness quarter-to-quarter. So it's a little bit hard to sort of extrapolate from any particular quarter. Overall, I'd say we're growing our infrastructure investments significantly this year, and we expect significant growth again in 2025" | ||
* Li said that Reality Labs remains a long-term strategic investment. "Overall, I'd say Reality Labs is clearly one of our strategic long-term priorities and we expect it will be an area of significant investment as we build out towards the very ambitious product roadmap that we have there," she said. | |||
=== Q3 results and outlook === | === Q3 results and outlook === | ||
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* CFO Susan Li said that online commerce was the biggest contributor of ad revenue growth in Q3, followed by healthcare and entertainment and media. | * CFO Susan Li said that online commerce was the biggest contributor of ad revenue growth in Q3, followed by healthcare and entertainment and media. | ||
* Li said ad revenue growth was strongest in North America and Europe (21%), followed by Rest of World (17%) and Asia Pacific (15%). | * Li said ad revenue growth was strongest in North America and Europe (21%), followed by Rest of World (17%) and Asia Pacific (15%). | ||
* Li pointed out that ad revenue growth decelerated in Asia Pacific from 28% due to lapping of a stronger demand from China-based advertisers. | * Li pointed out that ad revenue growth decelerated in Asia Pacific from 28% to 15% due to lapping of a stronger demand from China-based advertisers. | ||
* Ad impressions increased 7% while the average price per ad increased 11%. | * Ad impressions increased 7% while the average price per ad increased 11%. | ||
* Ad impression was mainly driven by Asia Pacific and Rest of World. | * Ad impression was mainly driven by Asia Pacific and Rest of World. | ||
* Pricing growth was mainly driven by increased advertiser demand, in part due to improved ad performance but offset by increased impression, particularly from lower monetizing regions and surfaces. | * '''Pricing growth was mainly driven by increased advertiser demand, in part due to improved ad performance but offset by increased impression, particularly from lower monetizing regions and surfaces.''' | ||
* Daily usage continue to grow Y/Y across Facebook and Instagram, both globally and in the U.S. | * Daily usage continue to grow Y/Y across Facebook and Instagram, both globally and in the U.S. | ||
* | *Li said that they are seeing healthy cost per action or cost per conversion trends. | ||
*Li said in the Q&A that they haven't seen any incremental benefits from cyclical events such as Olympics. | |||
*'''Li pointed out in the Q&A that they expect strong advertising trends in 2025, boosted by performance of its ad recommendation systems. "When we think about the Q4 outlook and when we think about going into next year, we generally expect growth to continue to benefit from the healthy global advertising demand that we've seen. We think that our investments in improving our ads performance will continue to accrue benefits to advertisers. But obviously there's a big range of possible macro backdrops and that's something that we try to reflect in the range of revenue guidance that we give," she said.''' | |||
=== Family of Apps === | === Family of Apps === | ||
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* Zuckerberg pointed out that global growth remains strong at Instagram. | * Zuckerberg pointed out that global growth remains strong at Instagram. | ||
* Zuckerberg said Threads now has 275 million monthly actives. That it's achieving more than 1 million signups per day. He added that engagement at Threads is growing too. | * Zuckerberg said Threads now has 275 million monthly actives. That it's achieving more than 1 million signups per day. He added that engagement at Threads is growing too. | ||
* In Threads they saw strong user growth in key markets such as US, Taiwan, and Japan (Q&A). | |||
* Li said they don't expect Threads to be a meaningful driver of revenue in 2025 (Q&A). | |||
* Li said they are seeing strong results in Facebook from their global rollout of unified video player in June. Since introducing the new experience and prediction system that powers it, they have seen a 10% increase in time spent on Facebook video player. | * Li said they are seeing strong results in Facebook from their global rollout of unified video player in June. Since introducing the new experience and prediction system that powers it, they have seen a 10% increase in time spent on Facebook video player. | ||
* Li pointed out that Reels continue to see good traction. | * Li pointed out that Reels continue to see good traction. | ||
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* In Q3, they made changes to ads ranking and recommendations system, which should increase ad attributions. | * In Q3, they made changes to ads ranking and recommendations system, which should increase ad attributions. | ||
* Li avoided answering the question on whether they are thinking of launching their own search. She said that they partner with Google and Bing to enable Meta AI to use them. | * Li avoided answering the question on whether they are thinking of launching their own search. She said that they partner with Google and Bing to enable Meta AI to use them. | ||
* Li said in the Q&A that they continue to see strong traction with click-to-WhatsApp ads but it's earlier in U.S. | |||
* Li pointed out in the Q&A that paid messaging continues to grow at a strong-pace again. "In fact, the primary driver of growth in our Family of Apps, other revenue line, which was up 48% in Q3, and we're seeing generally a strong increase in the volume of paid conversations driven both by growth in the number of businesses adopting paid messaging, as well as in the conversational volume per business," she said. | |||
=== Reality Labs === | === Reality Labs === | ||