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Meta expects total revenues between $29.5 billion and $32 billion for the second quarter of 2023. Unfavorable forex is expected to hurt year-over-year top-line growth by less than 1%.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $30.84 billion, indicating an increase of 7.01% from the year-ago quarter’s reported figure.
The consensus mark for earnings stands at $2.85 per share, up by a cent over the past 30 days, suggesting growth of 15.85% from the figure reported in the year-ago quarter.
Meta’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 15.46%.
Meta had a terrific second quarter of 2023, outperforming the Zacks Internet Software industry. While the shares of the social media giant have returned 35.4%, the industry has risen 16.3%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Meta’s second-quarter top line is expected to have benefited from Facebook’s expanding user base (more than 3 billion daily active users) and growing adoption of reels. Higher engagement level is helping to steady its user growth across all regions, particularly Asia Pacific.
Our model estimate for Asia Pacific Daily Active Users (DAUs) in the second quarter is pegged at 883 million, indicating 5.6% year-over-year growth, the fastest among the regions followed by the Rest of World, which we expect to grow 3.3% to 652 million DAUs.
In terms of Monthly Active Users (MAUs), our estimate for Asia Pacific is pegged at 1.339 billion, suggesting 2.6% year-over-year growth. The Rest of World MAUs is expected to grow 2.4% to 982 million MAUs.
Increased engagement for Meta’s offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. Effective usage of artificial intelligence has been helping the company keep its users engaged.
Our model estimate for Meta’s worldwide DAU is pegged at 2.034 billion, indicating 3.4% growth year over year. MAU is pegged at 2.985 billion, indicating a 1.7% increase year over year.
Nevertheless, Meta’s top line is expected to reflect the negative impact of the challenging macroeconomic environment and high inflation that is anticipated to have kept ad spending budgets under pressure. This is likely to have weighed on ad revenues in the to-be-reported quarter.
The company’s ad revenue business is facing a decline in growth due to ad targeting-related headwinds created by Apple’s (AAPL - Free Report) iOS changes.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. However, measuring these outcomes is tough.
In the first quarter of 2023, Meta’s ad revenues represented 98.1% of total revenues, which increased 4.2% year over year to $31.25 billion.
Our estimate for second-quarter 2023 ad revenues is pegged at $28.95 billion, indicating 2.8% year-over-year growth.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.
Meta has an Earnings ESP of +5.89% and currently has a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these too have the right combination of elements to beat on earnings in their upcoming releases:
Image: Bigstock
Meta Platforms (META) to Report Q2 Earnings: What to Expect
Meta Platforms (META - Free Report) is set to report its second-quarter 2023 results on Jul 26.
Meta expects total revenues between $29.5 billion and $32 billion for the second quarter of 2023. Unfavorable forex is expected to hurt year-over-year top-line growth by less than 1%.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $30.84 billion, indicating an increase of 7.01% from the year-ago quarter’s reported figure.
The consensus mark for earnings stands at $2.85 per share, up by a cent over the past 30 days, suggesting growth of 15.85% from the figure reported in the year-ago quarter.
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Meta’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, the average surprise being 15.46%.
Meta had a terrific second quarter of 2023, outperforming the Zacks Internet Software industry. While the shares of the social media giant have returned 35.4%, the industry has risen 16.3%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Meta’s second-quarter top line is expected to have benefited from Facebook’s expanding user base (more than 3 billion daily active users) and growing adoption of reels. Higher engagement level is helping to steady its user growth across all regions, particularly Asia Pacific.
Our model estimate for Asia Pacific Daily Active Users (DAUs) in the second quarter is pegged at 883 million, indicating 5.6% year-over-year growth, the fastest among the regions followed by the Rest of World, which we expect to grow 3.3% to 652 million DAUs.
In terms of Monthly Active Users (MAUs), our estimate for Asia Pacific is pegged at 1.339 billion, suggesting 2.6% year-over-year growth. The Rest of World MAUs is expected to grow 2.4% to 982 million MAUs.
Increased engagement for Meta’s offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. Effective usage of artificial intelligence has been helping the company keep its users engaged.
Our model estimate for Meta’s worldwide DAU is pegged at 2.034 billion, indicating 3.4% growth year over year. MAU is pegged at 2.985 billion, indicating a 1.7% increase year over year.
Nevertheless, Meta’s top line is expected to reflect the negative impact of the challenging macroeconomic environment and high inflation that is anticipated to have kept ad spending budgets under pressure. This is likely to have weighed on ad revenues in the to-be-reported quarter.
The company’s ad revenue business is facing a decline in growth due to ad targeting-related headwinds created by Apple’s (AAPL - Free Report) iOS changes.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. However, measuring these outcomes is tough.
In the first quarter of 2023, Meta’s ad revenues represented 98.1% of total revenues, which increased 4.2% year over year to $31.25 billion.
Our estimate for second-quarter 2023 ad revenues is pegged at $28.95 billion, indicating 2.8% year-over-year growth.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.
Meta has an Earnings ESP of +5.89% and currently has a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these too have the right combination of elements to beat on earnings in their upcoming releases:
Tyler Technologies (TYL - Free Report) has an Earnings ESP of +0.54% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tyler shares have gained 25.3% year to date. TYL is set to report its second-quarter 2023 results on Jul 27.
Cadence Design Systems (CDNS - Free Report) has an Earnings ESP of +0.67% and a Zacks Rank #1.
Cadence Design shares have gained 48.6% year to date. CDNS is set to report its second-quarter 2023 results on Jul 24.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.