Companies /Communication Services

Meta Platforms Inc - Class A

NASDAQ: META Internet Content & Information
$648.03
▲ $3.65 (+0.57%) today
Markets closed · 6:11pm ET

Q3 2022 Earnings

Reported Oct 26, 2022, 4:19pm ET · SEC source
$1.64
Miss −13.23%
EPS · est. $1.89
$27.7B
Beat +1.12%
Revenue · est. $27.4B
+7.8%
Beating market
META vs S&P since report
1 quarter
Consecutive EPS misses

Market Reaction

% change · around the report
−10%0+10%Oct 26Oct 27report 4:19pm ETearnings−1.3%−15.2%
−10%0+10%Oct 26Oct 27earnings−1.3%−15.2%
META −15.2%S&P 500 −1.3%
−10%0+10%Oct 26Oct 27report 4:19pm ETearnings−2.6%−15.2%
−10%0+10%Oct 26Oct 27earnings−2.6%−15.2%
META −15.2%NASDAQ −2.6%
−20%0+20%Oct 25Nov 3report 4:19pm ETearnings−3.3%−20.6%
−20%0+20%Oct 25Nov 3earnings−3.3%−20.6%
META −20.6%S&P 500 −3.3%
−20%0+20%Oct 25Nov 3report 4:19pm ETearnings−6.5%−20.6%
−20%0+20%Oct 25Nov 3earnings−6.5%−20.6%
META −20.6%NASDAQ −6.5%
−24.56%
Day of report
+1.29%
Next session
−9.22%
One week
+11.76%
30 days

S&P 500 over the same 30 days: +4.01%.

Did META Beat Earnings? Q3 2022 Results

Meta Platforms delivered a mixed but largely disappointing third quarter, with earnings per share of $1.64 falling well short of the $1.89 consensus estimate, a miss of 13.23%, even as revenue of $27.71 billion edged just above the $27.41 billion forecast. The top line, however, told its own grim story: revenue fell 4.5% year-over-year, weighed down by an 18% drop in average ad prices as macro demand weakness swept through the digital advertising market. Operating margin collapsed from 36% to 20%, as costs surged 19% to $22.05 billion, while Reality Labs deepened its drag with an operating loss of $3.67 billion on just $285 million in revenue. Free cash flow cratered to $173 million from $9.55 billion a year earlier, reflecting a massive capital expenditure ramp that the company guided to $34-39 billion in 2023. In a sweeping efficiency pivot, Meta subsequently announced layoffs of more than 11,000 employees, signaling that the era of unchecked headcount growth is over.

Key Takeaways
  • Ad impressions increased 17% year-over-year
  • Average price per ad decreased 18% year-over-year
  • Foreign exchange headwinds reduced revenue by approximately $1.79 billion
  • Family daily active people grew 4% YoY to 2.93 billion
  • Discovery engine and Reels product driving strong engagement

“Our community continues to grow and I'm pleased with the strong engagement we're seeing driven by progress on our discovery engine and products like Reels.”

Meta CEO, on the earnings call

Forward Guidance & Outlook

Meta expects Q4 2022 total revenue in the range of $30-32.5 billion, with foreign currency representing an approximately 7% headwind to year-over-year growth. The company expects 2022 total expenses of $85-87 billion and 2023 total expenses of $96-101 billion, including approximately $2 billion in office consolidation charges. 2022 capital expenditures are expected to be $32-33 billion, and 2023 capex is projected at $34-39 billion, driven primarily by AI capacity investments. Headcount at end of 2023 is expected to be approximately in-line with Q3 2022 levels (~87,314). Reality Labs operating losses are expected to grow significantly year-over-year in 2023. The company is focused on prioritization and efficiency, holding some teams flat, shrinking others, and investing growth only in highest priorities.

META YoY Financials

Q3 2022 vs Q3 2021 · SEC filings Q3 2021 Q3 2022
$0$8.0B$16.0B$24.0B$29.0B$27.7BRevenue$10.4B$5.7BOperating Income$9.2B$4.4BNet Income
$0$8.0B$16.0B$24.0BRevenueOperating IncomeNet Income

META Revenue by Segment

Family of Apps$27.4B
Advertising$27.2B
Reality Labs$285.0M

Figures from SEC filings and company reports. Not investment advice.