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Meta surpassed Wall Street’s expectations for both revenue and profit, and provided an optimistic forecast for the current period, indicating that its investments in artificial intelligence are enhancing its ability to sell more targeted advertisements.
Facebook’s parent company reported a 22% increase in second-quarter revenue, rising to $32 billion compared to the same period last year. This marks the fourth consecutive quarter of revenue growth exceeding 20%. Additionally, net income soared by 73%, reaching $13.47 billion, up from $7.79 billion, or $2.98 per share, a year ago.
Meta projected third-quarter revenue to be between $38.5 billion and $41 billion, with the midpoint at $39.75 billion, surpassing analysts’ expectations of $39.1 billion.
The company’s performance highlights ongoing gains in the digital ad market, which is its main business. Advertising revenue, primarily from Facebook and Instagram, increased by 22% compared to the previous year. Meta’s capital expenditures for the second quarter were reported at $8.47 billion, which was lower than the analysts’ estimate of $9.51 billion.
For user metrics, Meta announced it had 3.27 billion daily active users (DAP) for the quarter.
Meta’s financial performance continues to benefit from cost-cutting measures initiated in late 2022, including the elimination of approximately 21,000 jobs through multiple rounds of layoffs. As a result, operating income increased by 58% from the previous year to $14.9 billion, and the operating margin grew to 38%, up from 29% a year earlier. Additionally, revenue per employee has risen by 51% over the same period.
Despite its broad downsizing efforts, Meta has been investing heavily in advanced technologies such as artificial intelligence and the virtual and augmented reality needed for the metaverse. Like other tech giants, Meta has also been investing significantly in data center infrastructure and computing resources, which CEO Mark Zuckerberg believes are essential to maintaining a competitive edge.
Meta shares were up 39% year-to-date, while Nasdaq is only up 11% over the same period.
Investors can long Meta using our 2x Facebook, 3x Facebook.
Alternatively, traders can short Meta using our -3x Facebook.
Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at
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