Meta Platforms, Inc. Q2 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Key Financial Highlights

  • Total revenue was $28.8 billion, down 1% year-over-year. On a constant currency basis, revenue would have grown 3%, highlighting FX as a major headwind (primarily euro depreciation vs. USD).
  • Operating income was $8.4 billion, with a 29% operating margin, down from 43% in Q2 2021.
  • Net income was $6.7 billion ($2.46 EPS), reflecting revenue declines and increased investment.
  • Total costs and expenses rose 22%, driven by R&D (+43%), G&A (+53% largely due to legal and personnel), and Sales & Marketing (+10%).
  • CapEx was $7.7 billion (+server investments, especially for AI infrastructure).
  • Free cash flow: $4.5 billion.
  • Share repurchases: $5.1 billion; cash and marketable securities at quarter end: $40.5 billion.

User and Engagement Trends

  • Facebook DAUs: 1.97 billion (+3% YoY); MAUs: 2.93 billion (+1% YoY).
  • Family daily active people: 2.9 billion; monthly active people: 3.6 billion.
  • Europe DAUs/MAUs declined sequentially due to user losses in Russia and Ukraine tied to the war.
  • Reels engagement grew more than 30% quarter-over-quarter; Reels now contributes 20%+ of time spent on Instagram.
  • AI-driven content recommendations now account for ~15% of Facebook feed content and slightly more for Instagram; Meta expects this to more than double by end of 2023.

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Operator: Good afternoon. My name is France, and I will be your conference operator today. At this time, I would like to welcome everyone to the Meta's second quarter earnings conference call. [Operator Instructions] This call will be recorded. Thank you very much. Ms. Deborah Crawford, Meta's Vice President of Investor Relations, you may begin. Deborah Crawford: Thank you. Good afternoon, and welcome to Meta Platform's Second Quarter 2022 Earnings Conference Call. Joining me today to discuss our results are Mark Zuckerberg, CEO; Sheryl Sandberg, COO; and Dave Wehner, CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's press release and in our quarterly report on Form 10-Q filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The press release and an accompanying investor presentation are available on our website at investor.fb.com. And now I'd like to turn the call over to

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