Meta Set to Release Q1 Earning: What to Expect

Meta, formerly known as Facebook, is set to announce its first-quarter 2024 financial results after the closing bell on Wednesday. The tech giant's performance is eagerly anticipated, with analysts forecasting key figures across various metrics. Let's delve into what analysts expect from Meta's upcoming earnings report.

According to data from the London Stock Exchange Group (LSEG) and StreetAccount, here's what analysts are expecting from Meta's first-quarter results:

- Earnings per share (EPS): $4.32

- Revenue: $36.16 billion

- Daily active users (DAUs): 2.12 billion

- Monthly active users (MAUs): 3.09 billion

- Average revenue per user (ARPU): $11.75

Since early 2023, Meta has been a favorite on Wall Street. CEO Mark Zuckerberg's declaration of it being the "year of efficiency" drove significant investor confidence. In 2023, the stock nearly tripled, trailing only Nvidia among S&P 500 members, and it has seen an additional 40% increase in 2024.

After a challenging 2022, where Meta suffered from Apple's iOS privacy update and macroeconomic concerns, the company initiated a strategic overhaul of its ad business. CEO Mark Zuckerberg led this effort, focusing on artificial intelligence (AI) to rebuild the ad business. Finance chief Susan Li highlighted Meta's investments in AI models for targeted ads and automated ad creation tools.

Analysts anticipate a 26% increase in Meta's revenue compared to a year earlier, reaching $36.16 billion. This growth rate would mark Meta's fastest rate of growth since the third quarter of 2021.

Meta is benefiting from a stabilized economy and increased spending from Chinese discount retailers like Temu and Shein. These companies are investing heavily in Facebook and Instagram ads to reach a broader audience. Despite concerns about slower spending from Chinese advertisers, analysts remain optimistic about Meta's continued momentum.

Investors are closely watching Meta's cost management strategy, which has been a significant driver of the stock's rally. CEO Mark Zuckerberg's initiatives to streamline operations and reduce unnecessary projects have led to significant job cuts. As of December 31, 2023, Meta's global workforce stood at 67,317, down from a peak of over 87,000 employees in 2022.

Jefferies analysts expect Meta to surpass first-quarter expectations and provide strong guidance for the second quarter. They anticipate revenue growth of 20% in the second quarter, reaching $38.29 billion.

Meta's Reality Labs unit, responsible for developing the metaverse, continues to experience losses. Analysts project an operating loss of $4.31 billion for the quarter, alongside a 51% increase in revenue to $512.5 million.

As Meta prepares to announce its first-quarter 2024 earnings, analysts are optimistic about its performance. The company's strategic investments in AI and cost management, along with its expanding advertising reach, are expected to drive continued growth. However, investors will be closely monitoring Meta's ability to maintain its momentum and manage costs effectively.