Meta will report fourth-quarter earnings after the bell on Thursday.
Here’s what analysts surveyed by LSEG, formerly Refinitiv, are expecting:
- Earnings: $4.96 per share
- Revenue: $39.18 billion
Wall Street will also be looking at these key user numbers:
- Daily active users (DAUs): 2.08 billion expected, according to StreetAccount
- Monthly active users (MAUs): 3.06 billion expected, according to StreetAccount
- Average revenue per user (ARPU): $12.81 expected, according to StreetAccount
Meta is projected to report revenue growth of 22% as the online advertising market continues to recover from a brutal 2022, when soaring inflation and rising interest rates forced brands to reel in spending.
CEO Mark Zuckerberg attributes advances in artificial intelligence to improvements in the ad business, which is growing faster than rival Google. In Alphabet‘s earnings report on Tuesday, the company said Google ad revenue increased 11% from a year earlier, slower expansion than analysts were expecting.
Part of Meta’s financial recovery over the past year was driven by Chinese retailers, which have bolstered spending to reach users across the globe. Meta finance chief Susan Li most recently highlighted the significance of business from China in the company’s third-quarter earnings report in October. Li didn’t name specific companies, but fast-growing upstarts Temu and Shein, which originated in China, have been pouring money into ads on Facebook and Instagram.
While Meta has a very diverse base of advertisers, some analysts say the potential for Temu and Shein to pull back spending poses a risk because every point of growth matters for a company that saw revenue shrink for three straight quarters in 2022.
Zuckerberg, along with the top executives at TikTok, X (formerly Twitter), Snap and Discord, faced tough questioning from lawmakers on Wednesday. They accused the Facebook founder of ignoring the severity of child exploitation on the company’s family of apps.
Parents attending the hearing lambasted Meta and other companies for what they allege are insufficient safety and design measures that have caused mental health issues for their children and, in some cases, even resulted in their deaths.
“I’m sorry for everything you’ve all gone through. It’s terrible,” Zuckerberg told the parents in an emotional scene on Capitol Hill. “No one should have to go through the things that your families have suffered.”
Investors will also be looking for signs that Meta’s pivot to the metaverse is bearing fruit. The company has been burning billions of dollars a quarter to build out a virtual world that Zuckerberg has said is the future of computing. In total, the division has lost about $25 billion since the beginning of 2022, shortly after Zuckerberg renamed his company.
Analysts expect Reality Labs to show revenue of $762.8 million for the quarter and an operating loss of $4.26 billion, according to StreetAccount.