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Meta Platforms:Quarterly Results/2025 Q1: Difference between revisions
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== Q1 2025 Meta Earnings Call Summary == | == Q1 2025 Meta Earnings Call Summary == | ||
See: [https://events.q4inc.com/attendee/394880778 Q1 2025 Earnings Call] | Q1 2025 Earnings Call Transcript | See: [https://events.q4inc.com/attendee/394880778 Q1 2025 Earnings Call] | Q1 2025 Earnings Call Transcript | ||
=== Macro uncertainty === | |||
* CEO Mark Zuckerberg said the business is performing very well and thinks that they are well positioned to navigate macro uncertainty. "Our business is also performing very well, and I think we're well-positioned to navigate the macroeconomic uncertainty," he said. | |||
=== CapEx === | |||
* Li said majority of their CapEx this year will go to both generative AI and core business, with the majority going to the core business. | |||
* Li said they continue to deploy CapEx in a way that grants them the maximum flexibility to react to technology and industry developments. | |||
=== Artificial Intelligence (AI) === | |||
==== AI opportunities ==== | |||
* Zuckerberg said AI opportunities they are seeing today include; improved advertising, more engaging experiences, business engaging experiences, business messaging, Meta AI and AI devices. | |||
* Zuckerberg said even with the significant AI investments, they don't have to succeed in all the AI bets to have a good ROI, but if they do, it will be a great achievement. | |||
* Zuckerberg said he thinks an increase in productivity from AI will likely make advertising a larger share of ad spend. "I think that the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today," he said. | |||
* Zuckerberg said AI will help create better content, in the form of videos and photos. | |||
* Zuckerberg said over time AI will enable content that it can interact with you. " In the near future, I think that we're going to have content in our feeds that you can interact within that, it will interact back with you rather than you just watching it," he said. | |||
* Zuckerberg expects more productivity caused by AI to enable people to engage more across Meta Platforms apps. "Over the long-term, as AI unlocks more productivity in the economy, I also expect that people will spend more of their time on engaging experiences across all of these apps," he said. | |||
* Zuckerberg pointed out that business messaging in countries like Thailand and Vietnam is high due to the low cost of labor in these countries. He expects business AI agents to reduce the cost of labor in developed countries, hence increasing their adoption. | |||
* Zuckerberg said their focus this year is making Meta AI a leading personal AI by emphasizing personalization, voice conversations, and entertainment. "I think that we're all going to have an AI that we talk to throughout the day, while we're browsing content on our phones, and eventually, as we're going through our days with glasses. And I think that this is going to be one of the most important and valuable services that has ever been created," he said. | |||
* Zuckerberg said over time, he sees monetization opportunities in Meta such as showing ads and offering a premium service to people who want more compute. However, over they next year, they will focus on deepening its engagement and usage. " I think that there will be a large opportunity to show product recommendations or ads, as well as a premium service for people who want to unlock more compute for additional functionality or intelligence. But I expect that we're going to be largely focused on scaling and deepening engagement for at least the next year, before we'll really be ready to start building out the business here," he said. | |||
* Zuckerberg said sales of Ray-Ban Meta glasses have tripled in the last year. | |||
==== Ad recommendation system ==== | |||
* Li said they are testing how to integrate LLMs in their ad recommendation system. They began testing it with Threads at the end of last year and they have seen a 4% increase in time spent from the first launch. She said they expect this to be complimentary to their personalization efforts in Meta AI. | |||
* Li said GEM is twice as efficient in improving ads performance. She reiterated that their test in Facebook Reels this year resulted in a 5% increase in ads recommendations. | |||
* Li said their incremental attribution feature, which drive results that are optimized for each business's objectives has resulted in a 46% increase in conversions. | |||
=== Q1 2025 results === | |||
* CFO Susan Li said online commerce verticals was the biggest contributor to year-over-year growth in ad revenue. | |||
* Ad revenue growth was strongest in Rest of World (+19%), followed by North America (+18%), Europe (+14%) and then Asia-Pacific (+12%). | |||
* Li said ad pricing during the quarter benefited from increased advertiser demand, in part driven by strength in ad performance but offset by impression growth, particularly in lower monetizing regions. | |||
* Family of App's other revenue which rose 34% y/y to $510 million was driven by messaging revenue growth from WhatsApp business and payment for verified subscription. | |||
=== Family of Apps === | |||
==== Family of Apps usage ==== | |||
* Zuckerberg said Threads now has 350 million monthly actives. | |||
* Zuckerberg said business messaging should be the next pillar of their business. He said WhatsApp now has 3 billion monthly actives and 100 million users in the U.S and growing quickly there. Messenger is now used by more than a billion people. | |||
* Zuckerberg said in the last six months, improvements in the ads recommendations have led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and 35% on Threads. | |||
* Li said in Q1, they saw strong growth in video consumption in Facebook and Instagram, particularly in the U.S where video time spend grew double digits y/y. | |||
* Li said Ray-Ban Meta glasses has 4 times as many monthly actives as a year ago. | |||
==== Family of Apps product launches ==== | |||
* Li said they launched an Instagram Feed in Q1 that has content your friends have left a note on or liked, and they are seeing good results with it. | |||
* Li said they recently launched Blend in Instagram, which enables you to blend your Reels algorithm with that of your friends and spark more meaningful conversations. | |||
* Li said last week they launched a standalone Edits app, that has an ultra-high resolution short-form video camera and Gen AI tools that enable you remove any background of any video and animate still images. | |||
* Li said they started opening up Threads to more ads this month. She said they don't expect Threads to be a meaningful driver of their overall revenue in 2025. | |||
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== Management expectations and analysts estimates == | == Management expectations and analysts estimates == | ||