Of course, consider that Family of Apps includes two messenger apps (WhatsApp and Messenger) that positively affect DAP as people use them for everyday communications. Furthermore, this ratio has remained relatively constant at very high levels during the last two years, so we can't see any reason to think that people are less engaged across Meta's Family of Apps: If we look at the DAP/MAP ratio, which measures how many users are engaging daily with the platform with respect to those engaging monthly, we see that users are still using Meta's apps quite a lot. When it comes to Family of Apps (i.e., all of Meta's apps), DAP (Daily Active People) and MAP (Monthly Active People) were up 0.36% and 0.28%, respectively: Here, we're referring to the Facebook app, not Meta: Facebook DAUs (Daily Active Users) were slightly down sequentially. Investors also raised concerns regarding engagement. We understand that nobody would think this is a good business after looking at the graph above, but we're in the very early innings, and almost no business model has been profit making since day 1.
But, of course, as it only makes up 3% of total revenue, these losses are not that significant on the overall results:Īs FRL revenue grows, losses do too. The "Metaverse" is currently generating some hefty operating losses for Meta. In the FRL segment, the picture is quite the opposite. However, the graph above shows that operating income margins for this segment have been contracting over the last few quarters. Family of Apps includes Facebook, Instagram, Messenger, WhatsApp, and other services, whereas FRL includes all the AR/VR stuff (i.e., the bet on the Metaverse).įoA demonstrates to be a great business today, enjoying 48% operating margins and making up 97% of total revenue: Q4 2021 was also the first quarter where investors were able to see the economics across the new reporting segments: FoA (Family of Apps) and FRL (Facebook Reality labs).
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Operating cash flow grew 29% to $18.1 billion, while free cash flow grew 36.2% to $12.5 billion: Up to here, nothing too worrying, especially considering that the top line was still growing at a healthy clip despite iOS headwinds and supply chain issues.ĭespite facing tough comps, cash flow metrics were even better than revenue. Revenue grew 20% YoY (year-over-year) while EPS (earnings per share) declined 5.4% YoY. Meta managed to beat the top line expectations but missed on the bottom line: So what happened? Is this big drop justified or is it a market overreaction? The stock is now more than 40% off highs, the second-largest decline since the company became public in 2012: Zuckerberg himself lost $29 billion in one day. The market did not like these earnings at all, and Meta dove more than 25%:įor context, this is the largest intraday market cap loss for any single company in stock-market history: Meta (previously known as Facebook) reported its Q4 earnings last week. Historical reaction to Meta's Q4 earnings These two topics should be of utmost importance for any Meta shareholder as the future of the company will depend on the regulatory environment and management's ability to allocate capital. This article will mainly go over Meta's ( FB) Q4 earnings, although we will also talk about management's message to regulators and capital allocation in general. Meta also faces significant competition from the likes of Apple (messaging), YouTube (advertising and video), Bytedance (social media) and Tencent (messaging and social media).Chip Somodevilla/Getty Images News Introduction Meta, thanks to its huge user base gained a significant market share in the advertising space wherein it faces tough competition from Google, Twitter, Amazon and Snapchat-parent Snap. Marketers buy ads that can appear on multiple platforms including Meta, Instagram, Messenger and third-party applications and websites. Meta uses metrics like daily active users (DAUs) and monthly active users (MAUs) to measure Facebook's user base. Along with in-house developed Messenger, these apps now form Meta's family of products used by billions of people on a monthly basis. The company's portfolio offering evolved from a single Facebook app to multiple apps like photo and video sharing app Instagram and WhatsApp messaging app owing to acquisitions. Meta Platforms is the world's largest social media platform. Meta Platforms Current Ratio Historical Data
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