Meta Q2 earnings report 2024

Meta shares jumped about 7% in extended trading on Wednesday after the company beat Wall Street estimates for revenue and profit and issued a better-than-expected forecast for the current period.

Here are the results, compared to LSEG estimates:

• Earnings: $5.16 a share vs. $4.73 per share expected
• Revenue: $39.07 billion vs. $38.31 billion expected

Meta provided revenue guidance for the third quarter of $38.5 billion to $41 billion, or $39.75 billion at the middle of the range. Analysts were expecting a forecast of of $39.1 billion.

The Facebook parent reported second-quarter revenue growth of 22% from $32 billion a year earlier, marking a fourth straight quarter of growth in excess of 20%. Net income jumped 73% to $13.47 billion from $7.79 billion, or $2.98 a share, a year earlier.

Meta’s results point to continued share gains in the digital ad market, the company’s core business. Advertising revenue, which comes largely from the Facebook and Instagram apps, rose 22% from a year earlier. Last week, top rival Alphabet reported an 11% increase in Google ad sales, with YouTube missing estimates.

Meta said expenses in the second quarter were $24.2 billion, which included the charge from its recent agreement to settle a facial recognition data lawsuit by the state of Texas for $1.4 billion.

The company reported capital expenditures of $8.47 billion for the second quarter, below the $9.51 billion that analysts estimated.

Meta said its expense outlook for the year remains unchanged at $96 billion to $99 billion. The company narrowed the range for capital expenditures. It’s now $37 billion to $40 billion; the low number was previously $35 billion.

For user metrics, Meta reported that it had 3.27 billion daily active people (DAP) in the quarter, matching StreetAccount estimates. In the past, Meta reported daily and monthly active user numbers for its Facebook and Messenger apps. The DAP figure is the number of people accessing any one of its apps.

Meta’s financials continue to benefit from cost-cutting initiatives that started in late 2022. The company eliminated a total of about 21,000 jobs over multiple rounds of layoffs. Operating income climbed 58% from a year earlier to $14.9 billion, and Meta’s operating margin expanded to 38% from 29% during the year-earlier period.

Meta said that its headcount dropped 1% year over year to 70,799 as of June 30.

While it’s been downsizing broadly, Meta has been spending heavily on cutting-edge technologies like artificial intelligence and the virtual reality and augmented reality tech needed to underpin the metaverse. Similar to other tech giants, Meta has been pouring money into data center infrastructure and computing resources that CEO Mark Zuckerberg said is necessary to stay ahead of the competition.

“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,” Zuckerberg said in a statement. “We’ve released the first frontier-level open source AI model, we…