Meta Insights (Facebook): The Cold Shower

(AOF) – Meta, parent company of Facebook, collapsed by 20% yesterday after the stock market, sanctioned for its disappointing results and outlook. The social network is penalized more than expected by the competition and the functionality of iOS 14, which limits the use of user data for advertising targeting. It restricts the personalization of marketing campaigns and therefore their effectiveness, which leads to reduced demand from advertisers. This is the first results release since the group’s name change to Meta.

In the fourth quarter, turnover increased by 20% to 33.67 billion dollars, emerging above the Bloomberg consensus amounting to 33.43 billion. Advertising sales amounted to 32.64 billion dollars, an increase of 20%, a marked slowdown compared to the previous quarter (+33%) and the second quarter (56%).

On the other hand, profits fell short of expectations. Meta saw its net profit drop 8% to $10.285 billion, or $3.67 per share. The consensus is higher at $3.84 per share.

The Reality Labs division, which brings together products, software and content related to augmented and virtual reality, generated $877 million (+22.3%) in revenue and generated an operating loss of $3.3 billion. . The details of this activity have been revealed for the first time.

The business outlook also turned out to be disappointing. Revenue for the current quarter is expected to grow 3% to 11%, or between $27 billion and $29 billion. Wall Street was more bullish, targeting $30.3 billion.

Meta is suffering from competition from other social networks, like TikTok, but also from a shift in engagement within its apps to video formats like Reels, which are monetizing at lower rates than Feed and Stories.

The changes in terms of data protection for their use in advertising targeting by Apple will also continue to weigh on activity. During the conference call with analysts, Chief Financial Officer Dave Wehner put the negative impact at around $10 billion in 2022.

As headwinds, Dave Wehner also cited the impact of inflation and supply chain disruptions on advertising budgets and

exchange rates.

In total, the group had 2.91 billion monthly users at the end of the fourth quarter, up 4%. Growth that has slowed compared to the third quarter, when it was +6%. The number of daily users for its part stood at 1.93 billion, up 5%. It had increased by 6% the previous quarter.

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