Meta shares rise as Q2 revenue beats estimates
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The news: Facebook and Instagram parent Meta Platforms beat market expectations for Q2 revenue and set an optimistic sales forecast for the third quarter, alleviating concerns over the cost of its artificial intelligence and metaverse investments.
The numbers: Revenue rose 22% to USD39.1 billion ($59.75 billion) for the June quarter, beating analysts' forecasts of USD38.3 billion, according to Reuters.
The company said it expects Q3 revenue between USD38.5 billion and USD41 billion, with a midpoint above consensus estimates of USD39.1 billion, according to LSEG data.
While Meta's costs climbed 7%, the company notched a nine-point rise in operating margin, from 29% to 38%. Family daily active people (DAP), which tracks how many unique users per day open one of Meta's apps, was up 7% year on year to an average of 3.27 billion for June.
The social media giant also signalled a lift to AI spend, forecasting full-year capital expenditure of between USD37 billion and USD40 billion, up USD2 billion at the lower end from its previous forecast of USD35 billion to USD40 billion.
The result saw Meta shares climb 5.1% in after-hours trading on the Nasdaq by 7:30am AEST, having closed the day 2.5% higher.
The context: Meta's earnings come after results by fellow Nasdaq majors Alphabet and Microsoft saw both companies' shares take a tumble in recent days.
All three companies have invested heavily in data centres in a bid to lead the AI race, with Meta introducing new AI features across its ad-buying products and social media platforms.
The June quarter also saw Meta release its open source large language model Llama 3, as it aims to catch up to rival open source models such as Microsoft-backed OpenAI.
The sources: Meta Platforms earnings release, Reuters
