Meta (META) is set to report its Q4 2022 earnings today after the bell, capping off a tough year for the Facebook parent.
Here's what analysts are expecting to see from Meta as it ties up its 2022:
Q4 Revenue – $31.65 billion expected
Advertising Revenue – $30.86 billion expected
Adjusted Earnings Per Share (EPS) – $2.26 expected
Facebook Daily Active Users (DAUs) – 1.98 billion expected
Family of Apps Daily Active Users (DAUs) – 2.92 billion expected
Reality Labs Operating Loss – -$3.99 billion expected
Meta, which also owns Instagram and WhatsApp, is coming off an exceptionally difficult year. In 2022, the company's stock declined approximately 63% as the social media giant battled growing competition from TikTok, high inflation, and a muted digital advertising market.
Slowed ad spending is going to be a particular pain point, as "digital advertising remains under pressure with some signs of stabilization," Wedbush analyst Dan Ives wrote in a Jan. 29 note to investors. This week,
Rival Snap (SNAP) reported earnings yesterday, and the read-through doesn't look great for Meta. Snap barely met Wall Street's expectations on revenue and DAUs and hinted at a likely revenue decline in Q1 2023. Snap's stock plunged about 13% following the report.
Meta's got a lot of moving parts
Meta, quite simply, has a lot going on right now. For one, the company changed its name in 2021 from Facebook to signify its commitment to the metaverse, an effort that's proven expensive and increasingly difficult to justify as the broader macro economy's taken a dive.
Additionally, the company laid off 11,000 workers in November and more job jobs are reportedly on the table even now. Moreover, the company's C-suite re-shuffled substantially through last year, with longtime COO Sheryl Sandberg officially leaving the company in September.
The company is simultaneously in the midst of defending its proposed acquisition of VR developer Within, which makes fitness app Supernatural, in an antitrust lawsuit brought by the Federal Trade Commission (FTC) in July. The $440 million deal was announced in October 2021, just a day after the company's name change.
Though acquisitions have fueled Meta for years – Instagram and WhatsApp chief among them – the company's in a new era in which getting those big-ticket deals done is going to be hard. Meta CTO Andrew Bosworth of Within that "if this deal doesn’t close in a timely matter, we’ll probably just walk away.”