Meta Platforms (META) Q2 2022 Report and Price Target Update for 2023

On Wednesday, July 27, 2022, Meta Platforms published a report that did not exceed analysts’ expectations. The number of daily active users (DAU) was 1.97 billion people (analysts expected 1.96 billion people). The number of monthly active users (MAU) amounted to 2.93 billion people (analysts forecast 2.94 billion people), up 1% compared to last year.

Key financial highlights from Meta Platforms Q2 2022 report

EPS (earnings per share) = $2.46 (forecast $2.51)
Revenue (revenue) = $28.82 billion (-1% yoy) (forecast $28.95 billion)

Meta Platforms reported that in Q2 2022, in-app ad impressions grew 15% year-over-year. However, the average price of advertising has decreased by 14% compared to last year. In 2022, Meta Platforms has scaled back its hiring plan to reduce overall costs in a challenging operating environment. The financial resources of the company will be directed to the main priorities.

Forecasts for Q3 FY 2022

The company also gave a rather weak outlook for the next fiscal quarter. Q3 2022 revenue is forecast to be between $26 billion and $28.5 billion, with continued weak ad demand due to macroeconomic uncertainty. In the 3rd quarter of 2022, the company also predicts a drop in Reality Labs revenue.

Segment Results

Family of Apps (facebook, instagram, whatsapp apps)

• Revenue (revenue) = $28.37 billion (-1% y/y)
  Operating income = $11.16 billion (-25% YoY)

Reality Labs (virtual reality – metaverse)

• Revenue (revenue) = $0.452 billion (+48% yoy)
  Operating income = -$2.8bn (-25% YoY)

To summarize: the company’s key business has weakened, net profit has decreased significantly. The direction of virtual reality is still on the initial path and continues to increase losses. The company will still need to make a lot of efforts so that the Reality Labs (virtual reality – metaverse) direction reaches commercial success