META
📈 Meta reported significant beats on both earnings per share ($6.43 vs. $5.25 expected) and revenue ($42.31B vs. $41.38B expected), showcasing strong business performance.
💰 The company demonstrated impressive profitability with a 41% operating margin and substantial growth in net income to $16 billion, despite a surprisingly low 9% tax rate.
🤖 Meta significantly increased its capital expenditure guidance for AI and data centers (from $60-65B to $64-72B), signaling aggressive investment in future growth, particularly in AI infrastructure which benefits companies like Nvidia.
@bernardodegarcia:
“Meta benefits per share $6.43 versus $5.25 expected. Revenue $42.31 billion versus $41.38 billion expected. Nice, nice, nice. We had a very good start to the year. Our community continues to grow, and our business continues to be great, says Zuckerberg. We are making a lot of progress on AI glasses and Meta AI, which now has almost 1 billion active users. Revenue increased 16%. Income from operations shows a 27% margin, at 41%. What a beast. At this cash level, it’s getting a 41% return. Tax rate of 9%. Fantastic. Net income $16 billion. How do you have a 9% tax rate? Earnings per share $6.43. Annualize this, leave it at six. 6 * 4 = 24, multiple of 20 is 480. How much is Meta trading at now? A bit more. But obviously, markets expect it to generate more than $6 per quarter. 6, 6.5. Meta shares aren’t moving much. I suppose there are still fears, some comments surely indicate uncertainty due to tariffs and recession. Daily active people 3.3 billion. Ad impressions up 5% year over year. Average price per ad up 10%. What a beast. Revenue 16%. Costs and expenses 9%. Capex $13.7 billion. You can multiply this by four, but I suppose we’ll see it grow much more. Capital Return Program: We repurchased $13.4 billion in shares. Cash $7.2 billion. Cash flow $24 billion. Free cash flow $10 billion. Headcount increased 11%. We expect Q2 2025 revenue between $42.5B and $45.5B, compared to the current $42.3B, so perhaps a bit flat. Our guidance assumes Forex is a 1% headwind. We expect 2025 Total Expenses between $113B and $118B, lowered from $114-119B. We anticipate Capex between $64B and $72B, raised from $60-65B. What a beast. This outlook reflects more investments in data centers to support artificial intelligence, besides hardware costs. Most of our 2025 CAPEX is still directed towards our core business. We expect a tax rate of 12-15%. The regulatory landscape in the US and Europe could impact our business. Europe decided our subscription model doesn’t comply with the DMA. R&D spending increased significantly, around 30%. G&A costs are falling. Based on historical EPS growth (average 38% over 5 years, even using a conservative 20%) and current P/E multiples (around 22-23x, near 5-year average), the stock appears attractively valued with potential upside to the $630-$650 range.”
Watch the exact part of the video where @bernardodegarcia talks about Meta Platforms here:
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