6,354
edits
Meta Platforms:Quarterly Results/2025 Q1: Difference between revisions
Meta Platforms:Quarterly Results/2025 Q1 (view source)
Revision as of 09:35, 1 May 2025
, Thursday at 09:35→Q1 2025 Meta Earnings Call Summary
| Line 4: | Line 4: | ||
== 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] | [https://seekingalpha.com/article/4780182-meta-platforms-inc-meta-q1-2025-earnings-call-transcript Q1 2025 Earnings Call Transcript] | ||
=== Macro uncertainty === | === Macro uncertainty === | ||
| Line 11: | Line 11: | ||
* '''CFO Susan Li said there is uncertainty but the $3 billion in their guidance range aims to factor it.''' "On the Q2 guide, there is uncertainty, obviously, on how the macro environment will evolve over time and how that could impact different segments of our business. Our Q2 revenue outlook aims to factor that in and partly -- that's partly why the $3 billion range reflects the potential for a wider range of outcomes," she said. (Q&A). | * '''CFO Susan Li said there is uncertainty but the $3 billion in their guidance range aims to factor it.''' "On the Q2 guide, there is uncertainty, obviously, on how the macro environment will evolve over time and how that could impact different segments of our business. Our Q2 revenue outlook aims to factor that in and partly -- that's partly why the $3 billion range reflects the potential for a wider range of outcomes," she said. (Q&A). | ||
* '''Li said they have started seeing reduced ad spend in the US from Asia-based advertisers in anticipation of de minimis rule going away in May 2nd.''' "We have seen some reduced spend in the US from Asia-based e-commerce exporters, which we believe is in anticipation of the de minimis exemption going away on May 2nd. A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April. But our Q2 outlook reflects the trends we're seeing so far in April, which have generally been healthy. So it's very early and hard to know how things will play out over the quarter, and certainly harder to know that for the rest of the year." (Q&A). | * '''Li said they have started seeing reduced ad spend in the US from Asia-based advertisers in anticipation of de minimis rule going away in May 2nd.''' "We have seen some reduced spend in the US from Asia-based e-commerce exporters, which we believe is in anticipation of the de minimis exemption going away on May 2nd. A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April. But our Q2 outlook reflects the trends we're seeing so far in April, which have generally been healthy. So it's very early and hard to know how things will play out over the quarter, and certainly harder to know that for the rest of the year." (Q&A). | ||
* | |||
=== DMA risk === | |||
* '''Li said it's too early to say what the changes caused by the DMA will be since they are in the process of engaging with the EU Commission.''' "It is really too early to speak about what those changes could be because we are in the process of engaging with the European Commission. I think maybe the most useful sort of metric I could give you is just that our advertising revenue in the European economic area in Switzerland, which would be the geographies impacted here, was 16% of our worldwide total revenue in 2024. Again, we are continuing to engage actively with the European Commission further on this. So we hope to have more clarity by next quarter's call." (Q&A). | |||
=== CapEx and OpEx === | === CapEx and OpEx === | ||
| Line 17: | Line 20: | ||
* 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 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. | * Li said they continue to deploy CapEx in a way that grants them the maximum flexibility to react to technology and industry developments. | ||
* Li said even with the capacity they are bringing in 2025, they are having a hard time meeting the compute demands across the company. | * '''Li said even with the capacity they are bringing in 2025, they are having a hard time meeting the compute demands across the company.''' | ||
* Li said the higher infrastructure cost they expect this year is driven by tariff uncertainty (Q&A). | * Li said the higher infrastructure cost they expect this year is driven by tariff uncertainty (Q&A). | ||
*Li said the are funding the Llama training and don't expect this will change (i.e. find a partner). | *Li said the are funding the Llama training and don't expect this will change (i.e. find a partner). | ||
*Li said their updated OpEx guidance reflects their updated expectations for employee compensation as well as non-headcount related expenses. "The lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation as well as some other non-headcount-related operating expenses this year. And that's partially offset by higher expected infrastructure costs related to our increased CapEx outlook as well as higher expected Reality Labs cost of goods sold," she said (Q&A). | *Li said their updated OpEx guidance reflects their updated expectations for employee compensation as well as non-headcount related expenses. "The lowered outlook reflects more refined forecasts, including updated expectations for both employee compensation as well as some other non-headcount-related operating expenses this year. And that's partially offset by higher expected infrastructure costs related to our increased CapEx outlook as well as higher expected Reality Labs cost of goods sold," she said (Q&A). | ||
*Li said the capacity situation is dynamic, making it hard to project where demand and supply will be (Q&A). | *Li said the capacity situation is dynamic, making it hard to project where demand and supply will be (Q&A). | ||
*'''Li said it's too early to discuss the 2026 CapEx, reiterating that the CapEx situation is dynamic and they continue to find a lot of good use cases to put "capacity toward our core AI ranking and recommendations work."''' (Q&A). | |||
=== Artificial Intelligence (AI) === | === Artificial Intelligence (AI) === | ||
| Line 66: | Line 70: | ||
* 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. | * 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 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. | ||
* Li said they saw healthy growth in most verticals in Q1. However, they did see a year-over-year decline in gaming vertical (due to lapping of strong comps by China-based advertisers) and a sharp drop in politics vertical (due to end of US elections). | |||
=== Family of Apps === | === Family of Apps === | ||
| Line 73: | Line 78: | ||
* Zuckerberg said Threads now has 350 million monthly actives. | * 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 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. | * '''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 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. | * Li said Ray-Ban Meta glasses has 4 times as many monthly actives as a year ago. | ||
| Line 83: | Line 88: | ||
* 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 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. | * 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. | ||
* | |||
* | === Reality Labs === | ||
* Asked whether there is light at the end of the tunnel when it comes to Reality Labs losses, Zuckerberg suggested that they could be an opportunity once the products reach their third generation. "If you look at the -- some of the leading consumer electronics products of other categories, by the time they get to their third generation, they're often selling 10 million units and scaling from there and I'm not sure if we're going to do exactly that, but I think that that's like the ballpark of the opportunity that we have and that's something that I think we're kind of focused on scaling to that and then scaling beyond that for the generations after that."(Q&A) | |||
* Zuckerberg pointed out that they are focused on doing the work efficiently and that they are optimistic with what they are seeing in the results especially in the AI glasses. | |||
== Management expectations and analysts estimates == | == Management expectations and analysts estimates == | ||