Social network operator Meta Platforms (NASDAQ:META) beat analysts' expectations in Q2 CY2024, with revenue up 22.1% year on year to $39.07 billion. Guidance for next quarter's revenue was also better than expected at $39.75 billion at the midpoint, 1.5% above analysts' estimates. It made a GAAP profit of $5.16 per share, improving from its profit of $2.98 per share in the same quarter last year.
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Meta (META) Q2 CY2024 Highlights:
- Revenue: $39.07 billion vs analyst estimates of $38.31 billion (2% beat)
- EPS: $5.16 vs analyst estimates of $4.76 (8.4% beat)
- Revenue Guidance for Q3 CY2024 is $39.75 billion at the midpoint, above analyst estimates of $39.18 billion
- Gross Margin (GAAP): 81.3%, in line with the same quarter last year
- Free Cash Flow of $10.9 billion, down 15.2% from the previous quarter
- Market Capitalization: $1.17 trillion
"We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year," said Mark Zuckerberg, Meta Founder and CEO.
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ:META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Social Networking
Businesses must meet their customers where they are, which over the past decade has come to mean on social networks. In 2020, users spent over 2.5 hours a day on social networks, a figure that has increased every year since measurement began. As a result, businesses continue to shift their advertising and marketing dollars online.
Sales Growth
Meta's revenue growth over the last three years has been mediocre, averaging 13.6% annually. This quarter, Meta beat analysts' estimates and reported decent 22.1% year-on-year revenue growth.
Guidance for the next quarter indicates Meta is expecting revenue to grow 16.4% year on year to $39.75 billion, slowing from the 23.2% year-on-year increase it recorded in the comparable quarter last year. Ahead of the earnings results, analysts were projecting sales to grow 12.8% over the next 12 months.
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Key Takeaways from Meta's Q2 Results
It was encouraging to see Meta slightly beat analysts' revenue guidance expectations for next quarter. We were also happy this quarter's revenue and EPS narrowly outperformed Wall Street's estimates. Looking ahead, the company expects to continue investing in Reality Labs as its Ray-Ban Meta AI glasses are seeing strong traction. Overall, this quarter seemed fairly positive, and shareholders should feel optimistic. The stock traded up 5.4% to $500 immediately following the results.
So should you invest in Meta right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.