Net income is up a whopping 143%, from $4.4B to $11.6B - basically went from a 15% to 34% profit margin (and in line with profit margin numbers from 2021 and prior)
This got me interested in what did they spend between the $34B revenue and $11.6B Net income.
Cost of revenue 6,210
Research and development 9,241
Marketing and sales 2,877
General and administrative. 2,070
$9B in Research and Development. About $3B of that still belongs to Reality Lab.
So even without VR, Facebook still seems to spend relatively a lot of money for their revenue generation. I am surprised by this as I thought their net margin would be quite a bit higher.
> Net income is up a whopping 143%, from $4.4B to $11.6B
Zuck finally got over his bad VR trip. He was spending current FCF on his bad adventure and it was only a matter of time before someone got him to pull back. They can still do a lot in the space without dropping billions/quarter.
up 4% after a 200% gain over past year...crazy. a year ago ppl were writing the obituaries for Meta, with viral videos on YouTube about Meta's imminent demise getting millions of views...how poorly those have aged. I have never seen as big of a turnround as this...a half a trillion dollar company with as much upside as penny stocks but much smoother, less risk.
Exactly. But but but we were told that Meta was collapsing 1 year ago for sure due to their massive spending in VR and AR with the stock falling to less than $90.
Its almost as if that full emotion took over the markets over and switched on to complete fear mode and was a complete nothing to see here in the end showing that the so-called death of Meta Platforms Inc was over exaggerated by the media.
Another earnings beat and it is business as usual, just like before. [0]
> ad impressions delivered across our Family of
Apps increased by 31% year-over-year and the average price per ad decreased by 6% year-over-year.
How the hell do they keep pumping their impression numbers like this? Seriously I have stark memories of seeing these 20%+ numbers on last years earnings and thinking it was a big problem since there's no way it's sustainable at their size but here we go again.
The ad density has gone up enormously. They introduced a "suggested for you" feature so they could sparse your friends posts and increase the ad quantity between them without it being perceived as such since they occupy the interstitial slots with viral content. That's why it can't be "disabled" - it's not about keeping you on the platform, it's about subtly increasing ad density between the content you actually want to see in the same way local news uses teasers to string the audience along.
Whether this strategy is a level of abusive that leads to atrophy or is sustainable is yet to be determined.
How in gods name do they still make such obscene amounts of money?! Like, in my entire social circle including work, no one uses Facebook for more than messaging relatives abroad and most of that has shifted to Whatsapp anyway. Only thing I can imagine is Instagram, but that's gotten completely unusable for me as every second or third post is a fucking ad.
Technically adept people aren't the target market for their advertising platforms but yet they are staffed by ... technically adept people. It confounds me how anyone would want to work there. The money must be really good.
Somewhat inline with their announcements. Last year they were at 86000 employees, and announced two rounds of layoffs totaling 21000 (11000 followed by another 10000). This number seems to line up with that.
I think the most important wisdom in all of quantitative finance is that the expected future value of a stock it it's current value plus the value from the "risk-free" rate.
It happened that Meta did (for now) come back from it's exaggerated death, but just look at Google which took a major hit today.
I actually caught that falling knife at near its exact lowest point ~$90, but then sold it at a 10% gain because I thought it might be a dead cat's bounce.
Zuck builds a massive social network. Critics: he'll never monetize it, as soon as I see an ad, I'm out!
Zuck monetizes the social network and makes billions. Critics: he's managing the business quarter-to-quarter with no vision for the future. Pretty soon it'll be milked dry!
Zuck invests billions in potential future hit technology. Critics: he's lost his mind and should focus on the day-to-day!
So is the Metaverse fever dream truly dead? I see the Meta Quest goggles dropping in price but Meta also began promoting the new Ray Ban "smart glasses":
I don't think so. Even if it's not in this or next cycle the idea of portability between different "worlds" seems reasonable in a future. The problem is if this will happen at the Meta (and others) time or a newcomer will appear.
A theoretical metaverse could do a lot of things, but the one thing that made the metaverse economically attractive was essentially becoming a new virtual space for brands to sell. And the excitement for Meta specifically was that they'd get to collect tolls on this new virtual space via hardware and owning the largest properties.
The latter hasn't panned out, but we're seeing the former happen more and more: it's just not as centralized as fantasy versions were.
Fortnite is probably the most successful metaverse at this point, but you see things like Call of Duty placing limited release EVs from GM and famous anime characters being sold as DLC.
Now Prime Video has characters showing up Mortal Kombat as paid extra content, and you're sure to see more and more of these crossovers as brands start to accept the legitimacy of fully immersing their brands in virtual worlds instead of settling for the typical "in-game billboard reference".
The goal of a company at that scale isn't go "get by" but rather keep growing infinitely. The majority of the workforce at companies like Meta is always working on new, unreleased projects. So yes, you can cut all of them and suffer no immediate consequences (see – Twitter), but then after the revenue numbers stay flat for a few quarters the shareholders aren't going to be too happy.
[+] [-] samspenc|2 years ago|reply
Net income is up a whopping 143%, from $4.4B to $11.6B - basically went from a 15% to 34% profit margin (and in line with profit margin numbers from 2021 and prior)
No wonder stock is up 4% after earnings.
[+] [-] paxys|2 years ago|reply
[+] [-] ksec|2 years ago|reply
Cost of revenue 6,210 Research and development 9,241 Marketing and sales 2,877 General and administrative. 2,070
$9B in Research and Development. About $3B of that still belongs to Reality Lab.
So even without VR, Facebook still seems to spend relatively a lot of money for their revenue generation. I am surprised by this as I thought their net margin would be quite a bit higher.
[+] [-] almost_usual|2 years ago|reply
This was short lived.
[+] [-] matwood|2 years ago|reply
Zuck finally got over his bad VR trip. He was spending current FCF on his bad adventure and it was only a matter of time before someone got him to pull back. They can still do a lot in the space without dropping billions/quarter.
[+] [-] paulpauper|2 years ago|reply
[+] [-] grecy|2 years ago|reply
> Headcount was 66,185 as of September 30, 2023, a decrease of 24% year-over-year.
How to increase profit 101.
[+] [-] rvz|2 years ago|reply
Its almost as if that full emotion took over the markets over and switched on to complete fear mode and was a complete nothing to see here in the end showing that the so-called death of Meta Platforms Inc was over exaggerated by the media.
Another earnings beat and it is business as usual, just like before. [0]
[0] https://news.ycombinator.com/item?id=32256465
[+] [-] firebirdn99|2 years ago|reply
[+] [-] HDThoreaun|2 years ago|reply
How the hell do they keep pumping their impression numbers like this? Seriously I have stark memories of seeing these 20%+ numbers on last years earnings and thinking it was a big problem since there's no way it's sustainable at their size but here we go again.
[+] [-] kristopolous|2 years ago|reply
Whether this strategy is a level of abusive that leads to atrophy or is sustainable is yet to be determined.
[+] [-] mschuster91|2 years ago|reply
[+] [-] nicoburns|2 years ago|reply
- Number of Facebook users in the world (monthly active users): 2.989 billion (April 2023)
- Number of people who use Facebook each day (DAU): 2.037 billion (April 2023)
- Size of Facebook's global advertising audience: 2.249 billion* (April 2023)
- These latest figures indicate that roughly 37.2% of all the people on Earth use Facebook today
Even if Facebook is losing active users, it has 2 BILLION users.
Source: https://datareportal.com/essential-facebook-stats
[+] [-] matt_s|2 years ago|reply
[+] [-] shmatt|2 years ago|reply
* Groups are about 1000x better in quality and organic posts than Reddit
[+] [-] random42_|2 years ago|reply
Maybe that's where the money is coming from?
[+] [-] lotsofpulp|2 years ago|reply
[+] [-] pclmulqdq|2 years ago|reply
[+] [-] asadm|2 years ago|reply
that's how
[+] [-] Wytwwww|2 years ago|reply
Which Facebook owns as well, not they actually monetize it though.
[+] [-] paulpauper|2 years ago|reply
Mobile ad CPMS and CPS are insanely high. companies shelling out big bucks for traffic on Meta, Instagram.
[+] [-] Eumenes|2 years ago|reply
[+] [-] tymscar|2 years ago|reply
[+] [-] haunter|2 years ago|reply
[+] [-] ManuelKiessling|2 years ago|reply
Guess there’s your answer — advertisers is the group that actually pays Meta its money.
[+] [-] s0rce|2 years ago|reply
[+] [-] ChatGTP|2 years ago|reply
I think people are just so addicted to it, but in secret, if you're not an addict, it's confusing.
[+] [-] mensetmanusman|2 years ago|reply
[+] [-] bni|2 years ago|reply
[+] [-] kevmo|2 years ago|reply
[+] [-] mvdtnz|2 years ago|reply
[+] [-] Narkov|2 years ago|reply
Huge for a single year.
[+] [-] samspenc|2 years ago|reply
[+] [-] nemothekid|2 years ago|reply
I should have held the stock, but it seems after the initial panic, it was like trying to catch a falling knife.
[+] [-] IKantRead|2 years ago|reply
I think the most important wisdom in all of quantitative finance is that the expected future value of a stock it it's current value plus the value from the "risk-free" rate.
It happened that Meta did (for now) come back from it's exaggerated death, but just look at Google which took a major hit today.
[+] [-] cma|2 years ago|reply
[+] [-] paulpauper|2 years ago|reply
[+] [-] ipqk|2 years ago|reply
Point is, hindsight is always 20/20.
[+] [-] ge96|2 years ago|reply
Specifically the pass through.
[+] [-] FredPret|2 years ago|reply
Zuck monetizes the social network and makes billions. Critics: he's managing the business quarter-to-quarter with no vision for the future. Pretty soon it'll be milked dry!
Zuck invests billions in potential future hit technology. Critics: he's lost his mind and should focus on the day-to-day!
[+] [-] ChatGTP|2 years ago|reply
Maybe by this time next year it will have lost a bunch of money…
[+] [-] ilamont|2 years ago|reply
https://about.fb.com/news/2023/09/new-ray-ban-meta-smart-gla...
[+] [-] wslh|2 years ago|reply
[+] [-] BoorishBears|2 years ago|reply
The latter hasn't panned out, but we're seeing the former happen more and more: it's just not as centralized as fantasy versions were.
Fortnite is probably the most successful metaverse at this point, but you see things like Call of Duty placing limited release EVs from GM and famous anime characters being sold as DLC.
Now Prime Video has characters showing up Mortal Kombat as paid extra content, and you're sure to see more and more of these crossovers as brands start to accept the legitimacy of fully immersing their brands in virtual worlds instead of settling for the typical "in-game billboard reference".
[+] [-] WXLCKNO|2 years ago|reply
[+] [-] AustinDev|2 years ago|reply
[+] [-] paxys|2 years ago|reply
[+] [-] huytersd|2 years ago|reply