Meta Platforms (META) Misses Q4 EPS by 50c, Revenue Beats, Offers Guidance

Meta Platforms (NASDAQ: META) reported Q4 EPS of $1.76, $0.50 worse than the analyst estimate of $2.26. Revenue for the quarter came in at $32.17 billion versus the consensus estimate of $31.53 billion.

Meta also announced today a $40 billion increase in their share repurchase authorization.

• Family daily active people (DAP) – DAP was 2.96 billion on average for December 2022, an increase of 5% year-over-year.
• Family monthly active people (MAP) – MAP was 3.74 billion as of December 31, 2022, an increase of 4% year-over-year.
• Facebook daily active users (DAUs) – DAUs were 2.00 billion on average for December 2022, an increase of 4% year-over-year.
• Facebook monthly active users (MAUs) – MAUs were 2.96 billion as of December 31, 2022, an increase of 2% year-over-year.
• Ad impressions and price per ad – In the fourth quarter of 2022, ad impressions delivered across our Family of Apps increased by 23% year-over-year and the average price per ad decreased by 22% year-over-year. For the full year 2022, ad impressions increased by 18% year-over-year and the average price per ad decreased by 16% year-over-year.
• Revenue – Revenue was $32.17 billion and $116.61 billion, a decrease of 4% and 1% year-over-year for the fourth quarter and full year 2022, respectively. Had foreign exchange rates remained constant with the same periods of 2021, revenue would have been $2.01 billion and $5.96 billion higher, an increase of 2% and 4% on a constant currency basis for the fourth quarter and full year 2022, respectively.
• Costs and expenses – Total costs and expenses were $25.77 billion and $87.66 billion, an increase of 22% and 23% year-over-year for the fourth quarter and full year 2022, respectively. This includes charges related to our restructuring efforts of $4.20 billion and $4.61 billion in the fourth quarter and full year 2022, respectively.
• Capital expenditures – Capital expenditures, including principal payments on finance leases, were $9.22 billion and $32.04 billion for the fourth quarter and full year 2022, respectively.
• Share repurchases – We repurchased $6.91 billion and $27.93 billion of our Class A common stock in the fourth quarter and full year 2022, respectively. As of December 31, 2022, we had $10.87 billion available and authorized for repurchases. We also announced today a $40 billion increase in our share repurchase authorization.
• Cash, cash equivalents, and marketable securities – Cash, cash equivalents, and marketable securities were $40.74 billion as of December 31, 2022.
• Long-term debt – Long-term debt was $9.92 billion as of December 31, 2022.
• Headcount – Headcount was 86,482 as of December 31, 2022, an increase of 20% year-over-year. Our reported headcount includes a substantial majority of the approximately 11,000 employees impacted by the layoff we announced in November 2022, who will no longer be reflected in our headcount by the end of the first quarter of 2023.

GUIDANCE:

• Meta Platforms sees Q1 2023 revenue of $26-28.5 billion, versus the consensus of $27.25 billion.
• We expect first quarter 2023 total revenue to be in the range of $26-28.5 billion. Our guidance assumes foreign currency will be an approximately 2% headwind to year-over-year total revenue growth in the first quarter, based on current exchange rates.
• We anticipate our full-year 2023 total expenses will be in the range of $89-95 billion, lowered from our prior outlook of $94-100 billion due to slower anticipated growth in payroll expenses and cost of revenue. We now expect to record an estimated $1 billion in restructuring charges in 2023 related to consolidating our office facilities footprint. This is down from our prior estimate of $2 billion as we recorded a portion of the charges in the fourth quarter of 2022. We may incur additional restructuring charges as we progress further in our efficiency efforts.
• We expect capital expenditures to be in the range of $30-33 billion, lowered from our prior estimate of $34-37 billion. The reduced outlook reflects our updated plans for lower data center construction spend in 2023 as we shift to a new data center architecture that is more cost efficient and can support both AI and non-AI workloads. Substantially all of our capital expenditures continue to support the Family of Apps.
• Absent any changes to U.S. tax law, we expect our full-year 2023 tax rate percentage to be in the low twenties.
• In addition, as previously noted, we continue to monitor developments regarding the viability of transatlantic data transfers and their potential impact on our European operations.

For earnings history and earnings-related data on Meta Platforms (META) click here.

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