Meta Platforms (META) 28 Apr 222022 Q1 Earnings call transcript

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 First Quarter Earnings Conference Call. All lines have been placed on you to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. will recorded. call The Instructions] also be [Operator Thank much. you very Ms. Vice of Crawford, you may Deborah Relations, begin. President Investor Meta’s

Thank you. Good first quarter afternoon and welcome earnings call. to conference XXXX Meta Platforms’

CEO; our Joining to Wehner, results Sheryl Sandberg, are CFO. me COO; discuss Mark today Dave and Zuckerberg,

get release, results to to this results Before these from Form as forward-looking contemplated assumptions in the these result a may remind differ update started, opportunity call press include information statements and will filed forward-looking would are remarks Any set on obligation today’s materially that differ our based by of these our annual materially to statements future that as today today this I on SEC. events. could new on are XX-K statements. forward-looking to of report and like that we in take we you statements. cause Factors or make we Actual those forth no with undertake

may to and release. The During non-GAAP accompanying in over now, website press earnings call at of on non-GAAP today’s available Mark. measures release call like is investor.fb.com. both and to are reconciliation A we I’d investor press an GAAP this turn our measures. the included financial present presentation to And GAAP

today All progress continues the our last community to quarter right. been people people. talked us lot this difficult some a the ever I'm joining of Hey of period of made how proud and world during are of priorities, a near-term everyone, use before and what business. has products across our our grow. services and facing serving I challenges about today. quarter our for number We than thanks for people our across a More

for like Some our short-form well over which to we're are Meta, doesn't but the which quite monetize long-term. about as transition now, optimistic video, specific to

had a been some that business. with back, and like macro our industry, humanitarian okay the blocked the we Other changes, operating meaningful level, we'll investments, but the on in and real on iOS in expect navigate to a which which are during thoughts from globally. seen softness like e-commerce want resulting right loss Ukraine, over has saw specific the stop decided trends, war pandemic. in a headwind accepting broader also are business on we step the tragedy is a We've following the after an our technology trajectory effects Russia impact The also Taking war. to Some on globally is we signal time. We've from Apple's acceleration Russian advertisers philosophy. business share start of also ads I our to challenges

trajectory acceleration it's but led think to growth, off. on the e-commerce start last now we're of few the of our over After useful revenue years. COVID, I level-set the that outsized to seeing First, business back trend

are to in Apps segments, of growth Last on off AI accelerate and Reality current investments the our investments year, should based going strong important so we success began our especially revenue planning to saw of his of slow growth some I we the over infrastructure, about our business detail thinking Family term XXXX, and we in However, Reality believe Labs. to our projects a our looking and as how give investments, longer our levels, for of time two platform, at some continue number business we're will multi-year to growth more I share with be Dave margins. commentary. see But through. to business now and pace investments. in Labs. These want I'm kicked them of we also

In comparable Reality time incredibly I the mission On to can believe computing that return deliver , business growth and over new operating never expensive making better been be investments that to we're a important our social rates and we confident am it's and Labs, revenue for margins. I will it's large platform and of are the build Family the sustain Apps to side, next leading something in built I mobile both that's to before this value recognize paradigm it's platforms that for connection. today. high

Labs generate next income operating not goal Apps going the of from growing to to perspective our in fund while of given Unfortunately, the that in goal revenue longer expectation. term over financial So overall headwinds, years but our our profitability. from is the investment sufficient Family several a and our growth is Reality growth that's happen XXXX still to

the Of opportunities prolonged could that remain for shorter off uncertainty possible achieve currently course, building it’s we’re financial while our building force to macroeconomic goals. long-term and priority trade business so against we to this, our us confident plans or term long-term, But in remains our growth.

our Now investment this drive to ads main dive growth: with the I that I on that, want what in and metaverse. deeper priorities of seeing we're three expect Reels, to

Let's There key increasing our are that second, of feeds rather than and of video, first, of seeing social here: short-form driving popularity start the the content. trends just more with and advancement Reels. two we're AI recommendations

in than cameras, text. started the first the makes with as that format quickly website time got time that became that up people that overall types mobile a Reels main way Then use. and is of XX% Facebook, the images up the online. on very networks as Reels years, on makes XX last now main several apps. the and video on We and with people more well. multiple primarily is phones latest gotten spend the Short-form and spend On video since years Instagram. point, In this, Video growing the faster ago, people experience the content of media have of we've started quickly. mobile I Facebook seen people iteration growing shifts XX% is people already it's there

if being increase an or major we're AI, almost or follow in curated the experiencing graph feed more that even also to graph follow. exclusively your of posted short-form social content The by your from while video, a wasn't in someone friend by second seeing now recommended having you a feeds we're point is by shift

from the and lot the being not the from that content content most to and just we for people all friends as their increasingly group video interesting that best photos services people around AI that services, in and of as is includes industry from that support, now have platforms increasingly work posts Engine to a whole universe our reshares you an them, work world's the Social AI-based being turn just differentiated Instagram, able and more. you might that the not will to videos follow set follow the continue content investments amount our our future, as and of also of missed. accurately teach people content all building have valuable, of interests. building apart useful think I large for to Discovery In a video, the them lot show different that people rest content Facebook, Discovery but you attracting links, and the and businesses posts, and AI, video. make the things, don't also entertain across will otherwise interesting the having I types shared includes a on systems. of engaging living our drive ambitious most for folks In this In recommend success. Engines short-form also build of Discovery connect our text to a a vision well that most that post, Overall, who the but AI about directly unlocks system a recommendation creators our share Engine we're but as believe finding and that will to We're program. with I can think you them talented

but Sheryl let's our in discuss is business want highlight a about Next, There in now. main for this highlight three investment that detail, trends AI right us. ads. to also talk ads large to I this will are more

this feed well XXXX, we into Stories monetize and period didn't but through drag In yet, quarters, it, when and monetization Back leaned revenue growing instead using times today. shift as feed on I well less expect this mobile time. desktop down to First, foundation feed we tough out I mobile feed but type not Similarly, became video that it on as media of improve headwinds transition another the Stories tough our Stories, mentioned. Reels started because still monetizing We've ever. we're yet, stronger the short-form managing than when had or just near-term is from is the XXXX to saw a Stories, that people some from but went before. seen transitioned massively then multiple business of in doubled we feed will came in of we feed, over format but than more

we've it expect this run now. on a of to and some short-term Engine before We're vision, expansion growing Reels we So tailwind Discovery headwind part a this as engagement a at again in the point. major shift that from running we're play to and focused

to sure provide in playing We're also businesses for people we or and understanding also build on infrastructure lot from that's completing targeting interested headwinds investments Instagram, growing and on happening accurate we're businesses people advertisers with whether this apps. loss It when build our of the advanced signal measurement easier in making messaging technologies making AI most out, are While the first-party purchases best even or WhatsApp major it purchases industry. to what a or by means This is enhancing the recently. our within making that to apps, managing in discussed we've the engage Facebook to aren't privacy models Messenger. means

returns two, in increases for drives and for face growth better even Over of the signal hope people, higher the this year next loss. or recommendations advertisers, that our revenue we

that a metaverse. want longer think The technology industry. in over term, advantage sustainable the the large these discuss can today last the competitive is priority provide Over I to I investments others that

the into While it experience, We experiences a focusing starting as needing the the a lot the social version headset. step to web later we our growing launch Horizon of of but is era a I centerpiece on to metaverse more for still we're make from for technology plan today, as biggest of will important it's people social that community. build and out It's that the build build early platforms, foundation will we're The strategy of to year this the with next on challenges to without even next platform focus think be Horizon. easy well. opportunities the

this I best headset platforms augmented making to going available can you especially Quest, and be your Meta will be avatar they will friends where your device you’re Horizon experience put and platform platforms the whatever mean reality an from like ready upcoming to in from you everywhere on embodied in think on and with But your anyone or with moment eventually use. release, Quest interact with your to on right the interact that virtual our want home. on

other building the economy Our for focus Horizon out make and helping a metaverse creators metaverse. living working in is the

this be in should for think as a We others at better platforms develop. space, than meaningfully and our expect we advantage to monetization sustainable that they become

device cases full the bringing contact just world. Later the and hardware the X your tracking can blend We're seamlessly work of It's be to but higher-end to which passthrough We're side, eventually translated the color will laptop use On premium also in building social to to eye Meta make This will be hardware presence. for or Horizon The more in get our We'll setup. down with believe we places ahead a co-workers Horizon whether face and provide executing today or a future here's months facial and And dramatically a more I investors if the Project meeting resolved make have before now, be in focused why which are overnight, headset, physical us your continues release your be want our reality that to work. year, in good automatically us facial this team our eye we've best faced to right addition contact continuing this expressions, tracking ergonomics with physical a Project to eye have you're to so also and get metaverse avatar for as challenges replacing example reality avatar you that also number on experience, will navigate improved it. and game virtual Cambria doubling work, your platforms. this not of future. leading mixed building confident on going on the discussed we hardware but to developing be ready platforms, the sense or headset. these I'm launch face in everyone questions Sheryl. our in so more details we're the Quest Cambria, able our codenamed and your expressions we virtual on we'll important reality work improves for real-time, that who our partners, then we're playing period believe the to about share grateful Workrooms. are we've can for areas to of I'm together. in while invest

Thanks Mark, and hi everyone.

We The last to to revenue QX total ads. saw ago, more moment and saw the the Mark America which ways in growth year businesses North we Our is year-over-year. disruptions challenging advertise Rest significant landscape Despite Click-to-Messaging ad online. a have solid environment many headwinds areas billion, World, described in the video APAC and of ads the growth over but and like in $XX in caused up was meaningful changes X% a Europe. ads

Our that businesses with grow return-on-investment. them their I partners and focused to building over pick And up ours on teams to are we’re about and said help tools get products ads what on this want to so working our long-term. can the strategy. new navigate great continue Mark our they closely environment

video main especially it’s described, One, our video and short-form ads our investing two, he systems machine on three, in more support data like and infrastructure. AI to areas. with monetization, As do to less three focused learning Reels, evolving ad growing

accelerated ads, first video, the on time revenue better source continues we a and monetize over grow also well. lot Facebook and a the get efforts People were big across of video First, short-form time. of Facebook video at as surfaces for video And we Facebook that’s content to opportunity to monetizing quickly, Reels monetization on is spent in-stream in significant improve our of We’ve Instagram. already growing which a ads form quarter. there’s Half longer watch with growth video. eligible Stories the Reels format.

Stories experience Our applicable directly is monetizing here.

Sorry.

ads ads advertisers are with Stories We’re for learned perform we a to leveraging easy have and format, for that what to create native create. well, Reels

closely the is with the great opportunity and help experimenting them of working video, partners to our that of March Stories, make formats most with with with multiple new types example video utilize We’re campaigns A like ads. to range virtual in-stream restaurant formats U.S. first across consumers chain Worlds. in of Madness to Wendy’s. a driving campaign, They the Wendy’s restaurant the video and used Horizon feed, Reels promote their

with with across Wendy’s people worked itself, the Horizon virtual a metrics. promote to Wendyverse. directing big We XX also they them message campaign a million in awareness and campaign brand reaching was what success, screen Worlds the people, improving number The to welcome a of called and

evolving Second, ads system. our

new the over help while and landscape, improve era ad the paving there’s on for long-term. of our the and is working the focus medium and personalized evolve navigate next advertisers In we’re Our work doing way advertising, to with solutions. them near-term, near, the closely we’re we

with able to to faster API understand we’re to certain the API Meta. can we’re with them with data connection introduced direct, privacy-safe easier advertisers our with way One Conversions encouraging aggregate This to integrate way conversion a conversions. when see and a reliable, help is marketing performance, For SMBs we’re not conversions between partners create called data campaign Gateway. for and and even insights it and get their we’ve And helping measurement or integrate better example, less recently modeling.

brand’s chat In in usual a on Deichmann, to click-through fully onsite onsite Facebook. link you Shoe on which It’s commerce the through for with an Lead ads. ads, or with click think medium-term, Direct it digit we incremental ads, promoted businesses storefront Facebook is Shop WhatsApp. recommendations, a They make compelling grow objective like had you but personalized people in a onsite an also which improve It’s XX% footwear double a or opportunity still with direct we with shops grow to Europe’s opens to already Messenger, to customers great Instagram. business, in than retailer. largest we early year-over-year advertisers is dollar our conversion This to digital for purchases healthy products multi-billion growth Facebook ads a ads, directly generate and commerce for very Click-to-Messenger driving A leads, ads. Instagram your automated data through built more to an helping rate more their easier Click-to-Message can give Instagram and Assistant QX. continue ad example footwear business products it businesses feed the tools. Shop on and like as XX% other virtual saw and They be it and or We’re conversions see connect customers where

us we privacy-enhancing allowing of Over people performance these developing us also collaborating amount technologies will advertising. personalized advertisers. ads the across and process, that which support of run, minimize still And measure our will era on other we’re longer this help relevant information the we’re next personal for and industry to show standards while

Third, which ads are time AI and our and components crucial improvements over of technologies will to learning, these machine drive privacy-enhancing capabilities. measurement ranking and

learning investment the is towards our large AI increasing going and this this across portion significantly of ads. and year a company We’re machine in

these investments in innovate individual better to will do level performing that data. ads processing general, order continue We deliver help to in and less while us

ad range it and improve tools their advertisers We campaigns. of for easier make manage create, also to performance the a have of automated to

and to make to working advertisers them improve use. tools constantly these We’re for simpler

help think get solutions results the and term. over of can range our longer together, better Taken now we advertisers

to measurable advertisers people for the the to future. reach our get confident We’re long into they places outcomes apps continue will be best where

our are you say working thank results to deliver teams to As great for who ever, businesses so and our large to to small. everywhere. hard partners, And I want

Now, here’s Dave.

and Sheryl afternoon everyone. good Thanks,

total Let’s or was last total been XX% of up compared Had to All were year, on begin basis on about X% million unless up expenses with otherwise remained $XX.X foreign consolidated $XX.X last our have a constant are currency QX QX XX% would year. constant total with year-over-year noted. billion, billion, basis. higher. results. revenue comparisons exchange revenue rates a $XXX QX

the content-related XX%, support Cost infrastructure by and sales hiring partners Apps mainly increased of increased items: and mainly of revenue of and driven to marketing lastly, driven terms by added core In over the primarily specific employee-related increased compared And investments, to and Labs. driven Reality increased to driven majority QX, payments spend. R&D net Marketing XX%, legal-related Family We costs. and functions. by XX%, XX%, hiring hires full-time by costs. employees, up XX% G&A year. XX,XXX with quarter in We in last mainly new costs the X,XXX over technical line ended

representing income margin. operating quarter XX% First $X.X operating was billion, a

Our of on billion, was share. Free tax cash income $X.XX in XX%. quarter in Capital billion. quarter cash leases $X.X expenditures, by office payments data with servers, centers, stock common the including finance A rate in $X.X billion marketable billion Net flow was We investments Class the was were infrastructure network principal and our per or $XX.X we ended $X.X billion driven and first facilities. $X.X repurchased securities. and

as region. Russia the the revenue as demand grown in already we to our challenges Ukraine, fourth constant Europe the as from introduced reduction of both We expected to $XX.X and within or eCommerce an basis. the segment slowdown variety up up further vertical, measurement believe X% Ukraine the growth landscape to and the total We Apps macroeconomic of Apps of Family COVID-XX moving spend. following the results. Growth due the faced $XX in war billion, I’ll billion, segment. in war a which with a related as a was begin volatility quarter online start in a to Family of pandemic impacting for quickly into Family ad the to deceleration headwinds the advertising war of QX in decelerated during Now loss our targeting advertising well advertisers. X%. well on had experienced uncertain Apps factors. was of outside revenue XX% revenue due Prior QX further continued ongoing currency

flat year. by million Facebook Europe and MAUs block billion loss or the users last impacted of were X% country. X.XX $XX.X and of services monthly DAUs were at On XX%, the and of games. X.X to expenses, geography of least strongest growth monthly billion basis, XX world in Asia infrastructure March, negatively one the MAUs Family a by was following total exchange estimate pricing from decreased primarily by per at price in in also Russia Family and increased Pacific Foreign Impression on of offset basis. XX% employee-related approximately DAUs user Apps rest income users in legal decline X.XX Apps year. Asia-Pacific $XX.X in impressions that people number of people XX% lower The ad billion, compared X% XX% decline rates and the at the challenged war expenses last North earned Europe X%. billion, was was America X% grew X.X users of We In Apps X% that served costs. the in and a revenue other the growth driven respectively. and the declined regions were year-over-year. of margin. ongoing was a grew of up growth used a used was in primarily costs XX% impressions the year-over-year towards government’s average ad daily our on operating approximately mix rates. XX Europe to rest by daily related ad WhatsApp Family the headwind and or world. in sequentially revenue by was in million, our XX% driven ad to representing disproportionately billion, Family quarter. driven $XXX the a and Ukraine. operating active advertising represented mainly of growth at active revenue by in across up Facebook that up revenue were basis year-over-year was QX, compared least and million revenue approximately Business factors monetize of surfaces as shift to one payments-related a billion from API March. Apps

expect Labs X up this were down XX%, Reality to continue segment, $X.X operating expenses costs, revenue Reality in second Labs likely was by to will cause up quarter. the We QX was billion quarter Quest sequentially. the our driven Within MAU this be Global million, flat to and trend $XXX Reality sold. in loss sales. driven expenses billion, of XX%, by employee-related goods R&D operating cost Labs $X and first

Turning now to the outlook.

quarter in We the impacting to first to total XXXX quarter Ukraine. of outlook in the $XX with the in This expect war continuation second a revenue billion. first that including be $XX revenue the the half billion back trends of in range the coincided reflects quarter, of softness growth

guidance approximately based X% on year-over-year in headwind current to currency be Our second growth quarter, a will exchange assumes rates. foreign the

on as a operations, addition, our on and previous the viability pleased potential European calls, noted to are progress on we In with transatlantic we impact data their political and transfers monitor of continue agreement. the developments regarding

Turning the expense now to outlook.

We in our the of billion billion. expect $XX XXXX billion be total to billion, range of $XX lowered prior from outlook to expenses $XX $XX to

We Reality Labs. growth segment, be primarily followed the by driven of Apps expense Family expect XXXX by to

from our $XX brought any XXXX range rate while of landscape the changes In year law, by expect our new macroeconomic leases, capital U.S. tax complex unchanged set on be teens. principal payments XXXX estimate. billion, advertising of to billion including our expect about to QX challenges. full $XX the a navigating Absent to recent and in a adjusting We mobile above are be prior expenditures, to digital finance high to the platform advertisers in changes rate tax we closing,

expense adjusted headwinds, growth plans resulting Given for our revenue year. have hiring the this and we

lot open see to ensuring let’s appropriately opportunity calibrated our across questions. capital additional the up operating plans to to that, environment. for investment the towards committed are dedicating these talent priorities continue With call of a investment while areas remain our and We and France,

Stanley. Instructions] ahead. Brian is Morgan the you. Thank And of Nowak our with first from go line [Operator Please question

my taking questions. I for two. Thanks have

The of the this to there’s I on ask Appreciate in to you first incrementality time. about is on we a multi-year should Reels overall this as to it what little you total capital the a about you’re how the this I of CapEx the Reels. on et ask core business seeing Dave, it’s through color talk one spent bit moving going is wanted Reels And AI basis? seeing of strong engagement sort time you’re to time Instagram user Thanks. percentage U.S., can then one-time-ish, investments machine of that second Facebook, about engagement. as wanted Maybe base. going the much about not as CapEx. well about one, Understanding they think persist just may and of How think better the in really as is higher intensity it on forward? structurally Or year the through both the learning, cetera. maybe year’s could us be

both any take those. he at color I’ll if wants. Mark And crack Brian, of add then a can

other it’s surfaces, engagement. products from terms time pull like And additive with other believe does In that the Reels seen we’ve but away of cannibalization, we Stories. past to do in overall

And similar there. a seeing pattern so we’re

remain in pre-pandemic in and true back, U.S. look But and Instagram, the the Facebook that’s of both overall kind looking and terms for of and the In above through for engagement both levels COVID there’s Instagram, of engagement both complexity if different to a because peaks with period globally and lot were they lot engagement. create of Facebook that you troughs a of tends at

with pleased we’re think I So that.

and address power for It’s and feed. ranking me sort let are recommendations things front, investing and overall of CapEx learning true like the investments ramp. On we just to the significantly Ads, Reels machine in AI

to add growth. top there on is the business. capacity does machine in additional that as intensity make business so just and And of the AI additional And investments intensity think we the learning we CapEx capital do significant of of

outlook beyond an sharing you France, point. can XXXX not next go at the We’re this to Go ahead. question.

next Eric with is Please Goldman go ahead. question Sachs. Our Sheridan

do you the when of last more with picture so to one that on you most in you’re physical don’t cycle the the know privacy quarter, us versus when Metaverse an update Maybe second, hardware, QX. solve Apple from longer question. is content term, the years the you over medium to Mark, taking one investors the Metaverse iOS to hardware the much headwind for cycle worse long-term? both creating question. whether future-proofed I the I you you might how last called on to think the where monetization ecosystem? get much. changes, questions and Thank and or not, about we on somewhat so how think make side continue in QX about evolve? changes big couple the think micro Apple it the it those think the the versus of trying the on investment but over And the go headwinds if you about think creator might need get the distribution cycle Thanks layer one And you I that built for missed for than I future against was what you Can out in give have and

question. Dave one, I some context can give can and second Yes, the on first speak then to the

growth I and the be going think cycle profitable long. that revenue to near very or meaningful between is investment enough to here be

Reality all for we’ve ramped a on of useful that success software pieces I traditional hardware, future now plans you longer future. product that we’re figuring into of that the And two and think about teams multiyear that X, is with Quest to Because think context building these the building our we’ve a basically out or kind with lot we’ve may be to go into funding three you’re to so if products, bit expenses it’s for versions – why are much just when the going going designing than that. you’re Labs be especially built. seen of the that are be

ramp driven to and reality doing So multiple seeing now we up. teams as we’re for up. we spun have we’re the augmented that that success in sort as parallel ready really feel goes markets the of This is we’ve is like and in the be and sort that technology of work starting the by other well to VR

a reasons is and mean, something over growth you on have hit teams be point, think ends it’s big not then But those see expenses weigh until in high, a today. more profit few at future all expenses, think one experiencing and revenue product teams rates some that period. fully we’re contributor the been the to and those products market of have some a staffed we for this meaningful investing being really So and will will to we’ll versions the big and results and scale growth the going I market having or those way those But I will this rates that be the down. there operating I business. into is come up so the why continue the

is this I computing So – like past what later us groundwork on when established right? as primary this for the exciting when color expect calls laying that’s I given to to platform be Maybe primarily, be this why of that the point. is I’ve at a expect that this sort decade, more XXXXs the is very

that But this that, that think I results do going too. will the is way think longer a be I along for to cycle. there be

the that’s what the that think roll do there kind number with a of I a that will be everyone platforms we’re we have near-term things monetize. that. that Metaverse But doing of cycles Some goes. on I think, will overall, and across to context in have to opportunities resemble how have shorter the think we’ll used to of see apps. Certainly, that I might Horizon And can we’re little will, bit out want I software of parts what all that will there more

second had. – you that the take question I’ll second part the Eric,

headwinds them. factored expected privacy ATT incremental that we’ve regulatory and changes, ongoing – all continues demand are like war from iOS our from again, we outlook. on the things those headwinds we’re be other Ukraine. in factored seeing impact XX into see seeing to the and into QX to headwind, we continue More QX but from Those a of the changes. headwinds specifically, outlook, we’re expect along also And with We obviously our iOS

any write their platform in the themselves course, policies. how part on Of outlook and they and on depends headwinds enforce platforms

our term, what technologies. to those doing in Medium well. put to toward sort look those clients current that mitigate privacy-enhanced at I’d you caveat on opportunity and as more working conversions. When improvements Sheryl we So near-term, we’re see some to we’re like about of of the on-site solutions move talked

in Click-to-Messaging machine our with then effective to rebuilding longer-term, and AI stack of lot And like at employ then more a nascent more to less ads learning seeing ads things more be success We’re and ads, lead data. gen ads in we’re Ads. effort Shop

response building So new optimistic the a the environment, we’re future. we’ve we and we’re that about think got into

Justin is America. Please of next Our from with go question Bank ahead. Post

on. Great. maybe can Dave, follow I Thanks.

You and there the lap a changes gave QX, to you and progress? potential $XX anything that fair can to you Apple companies have you’re concern – how an the about year. this Thank past, wondering in in lot outlook or social future headwind for if out you with addresses decent if changes? of then say And is In call Is of factors. other QX headwinds. potential you. when able see XX thinking think for could XX Apple future, you’ve about IP I’m that potential assume chunk on been the maybe billion I a it iOS In you

sure. Yes,

we that’s it. well. second On the year the – a order on sense not ATT ATT our expected – order of last half quarter magnitude that a we update estimated It’s billion from of a it’s impact. the an magnitude, in not it’s estimate $XX There impact don’t precise not plan was be on worth last billion a give still to the and as noting, of of $XX to Also believe impact, we it’s lapping. point impact to and shared

we – an have beyond Justin, the ATT, And think other that’s about to you and from Also at also, don’t I then not last So I a There anything year. expect in targeting into our in implies higher first as ATT uncertainty QX, to in QX would half, second lapping a the there’s obviously share quarter since XX impact the to rate be changes. half regulatory think iOS increment. rate uncertainty point QX in but was the all the additional will baked well. outlook, XX. impact the see we of this growth and measurement headwinds expect sort full of we asked about modestly we and second be QX that of lot than

JPMorgan. Doug with ahead. next Our from question is Please Anmuth go

Thanks for taking the questions.

curious the monetization terms be the some as talk changes needs hoping of you over do well the timing AI on turning experience to the in perhaps Mark, happen user in for Reels, to long-term? was for I just curation And how of content for could then that then Thanks. cues, will about from First happen? you second, and product about And of think to what what more? biggest as social takes ads

Yes.

I about someone I So to on mean, recommendations engine in maybe can I the and then context give talk discovery too, ads jump can part. else can And the start AI-driven and some there.

and ranking the bigger. But Maybe feed order rank be, of businesses is now to follow. few built biggest at was more used to number those that pages in posts that are on a It thousand order here we feed to people, show a be candidates are potential of day you the person’s the you here just X,XXX a friends the that content way would optimal. or show interesting I was it challenge shift the the think a that most help okay, or are to we a here of fundamentally, is or universe ones news show of that could the that that the could small posts relatively system top. in

will are people more built show being what there. people understand system, AI, so understanding lot unique could of we’re our pieces long-form gets social your videos, a about, content that able links, through still more valuable interesting more candidates that which to, friends, in, now a person. of of as to much content I open-ended better across that And content. in show of in the of a content short-form you’ll and basically it’s now what everything different people. photos, lot and it content lot millions means from videos, be types, There of Now are addition The that, match content other the text, continue we think just thing. better have potentially most all with interested content the to our will understanding a But is a there’s to

should be a in more there’s of in interact stuff engagement make it I mean will parts both over Reels, which that mean? and overall, will It So with, that it and that services this what contribute more – does I this the are think will have think will Facebook in about of quite consume of to The some need that which to of specific the monetization – as – the And Instagram, to interesting. interesting we in questions already I naturally. ramp feed, kind that monetize are about to we’re a just should where that Facebook starting to see up actually parts experience. going part But and format. ramp-up think something we’re content showing Instagram time. this, better that’s

show point going about Reels, and the get way the ads with that important as we’re the up formats, ads news the to main for we of where a right? pacing all more just not all mean, It is, I It’s we’re monetization we a more but these of the effective and better this. our when doing more basically is we kind probably in talk some better that so the took ramps think Stories. do pain – been that as them. I side, quality the that gets it which And content same of ads to to across the here takes question of as also time like bit optimize improving show experience, ads jump see And big they show thing why the user to this create started I Stories, for time creative, little to about I were we And think for should for just And there’s really Sheryl way feed. content that’s has the Reels for different had going match to On some the this, designed advertisers Reels. think for business. them mean, cycle, the willing be we’re in

anything sure add there’s Sheryl. though, So want on I’m you else if that, not to

something think optimistic important because about. I about No, very it’s thing a to we’re think it’s really

We have great consumer engagement on Reels.

And ads have We rolling engagement we of the is to be advertisers content. that as of going kind for it’s This Stories, ads And taking about playbook into format growth. one fast that helping said, Mark like it’s the create journey experience. optimistic out but we’re and consumer the about. multiyear a very have a matches

reach the the we the is the automate is and and direct-to-consumer placement unique to Now results it, experience the we the audience more our using a the promising and think is completion. really help more example. usual are they we their results. A/B we going form more and ads we lower better at an adding the day, Stories and return video for applicable. they’re Prose create are campaign, a Reels I’ll And But for XX% have advertisers. advertisers what ad advertisers to investment. get monetizes putting a we’ve care end of is a they off we’re creative them seeing a can while help the are tested optimistic can really they share their where Stories, target, learned on are, a directly we at lower other feed who saw cost And hair Xx can great it purchase, still this chasing reason ROI, more advertisers, rate them higher we versus brand, go over this do per time higher the XX%

the lot format in the a we says think board this but just advertiser, this what hearing years. adopt from and advertisers that for we this can So of this help across is not coming many we’re works that

Youssef from next Securities. Truist Squali Our is question from ahead. go Please

the Great. Thank you have taking for two. I questions.

U.S. antitrust to looks front, data regulatory pretty more getting interoperability, are on positive. regulators aligned European Mark, First, transatlantic address like seems the it the and news like issues on on transfers and proceed to how the

being that looking more particularly environment European favorable this and Facebook? and this be as to or back do stepping regulators, And new between maybe see Dave. seems Just formed, for the U.S. then at to you is less favorable

you talk in can retention current employee much, maybe comp and With cash you the environment? Thank you. versus how think the comp stock-based stock about so down about

I’ll regulatory question. take the

regulation governing because Now interesting are rules rewritten, is Europe the a being and around in our industry are the in really increasingly critical that for time certainly but and Internet world. rethought the

about the spoke DMA. You

significant challenges We for our industry. to DMA have expect

for has our think well We’re up not largely we working with were regulators But and this working European expecting, challenging the overall, we be rules. things not – but a environment our this to technology details industry. will data. One, significantly regulators are us, these set text to meet just been to on we with of but closely They on our is a like we time, matter. are technologies what continue can industry. and range across regulatory the in to the But doing final privacy-enhancing real expect released in this for yet, whole do the challenge less to with be more

Yes. And Youssef, it’s Dave.

this I’d hires I retention quarter. on front, say net as success demonstrated continue the X,XXX new we mean, and by So to in the recruiting recruiting have

broadly attrition, is had pre-pandemic. still levels with ability seen what So the we're Also do really stepped to front, has our that. since retention on consistent with during we pleased which we experienced the pandemic up that

is obviously, and with tracking in the So it's expectations. definitely trends price but relatively that we're are that we watch, something line something the stock

we're okay. sense, that like doing we feel from So

question from the line Please of next Mark Our go Shmulik ahead. Bernstein. is with

taking Yes. the for questions. Hi. Thanks

strength of gave some of less the quarter, just that second kind Mark, last something and color? World, for the new And exposure users priorities Is the or APAC the of you share over the you on it that macro? else? Is then you just the Rest question, first, your year. in can saw The to kind us

the intensity little a the some bit, affected near-term longer-term Metaverse initiatives of of like on of how can perhaps Any stuff like color Thank share kind the you With you. down spending that's prioritization? some operating in guidance versus changes the any on expense business messaging?

the sort in growth. of first of regional So take the terms I'll question,

pricing off-site headwinds, by relatively objectives. Europe regions. the to due America, headwind In of regions exposure all in obviously, a meaningfully, international headwinds the higher slowed were the very obviously the was have in effects North to compounded decelerated all we and a growth war. existing So currency Ukraine

and more. growth challenges note in So that continue the to down targeting year-over-year impact in I'd that Also, impressions America, were region measurement North in QX.

year-over-year, from impressions QX. the down improved ad So were though rate

that's ads. at strong When regions. APAC of demand the Click-to-Messaging World, we Macro look primarily In the – benefiting a products APAC, the benefited in decelerated Rest conditions good in Rest XXXX. after tailwinds was of out bit half I'd growth. from it impression in broad-based, a improved second And call and was World, was like of Brazil from of in in it pretty So least strength demand-driven softness growth India of terms and but then strength all in relative deceleration. supply particular it

Yes.

on areas In lot it's terms a of focused so the the I've priorities, – company, I'll of particularly the our on been broadly year, the last outlined a call. basic consistent most I've calls, few that of beginning priorities about talk focus the earnings on. was what whereas are with It areas I outlined for

the these energy company high-priority areas, pacing I across from we're But away each more think importantly, think of areas. toward areas. bulk of investments the we're other inside the the shifting some those I of

about on people during cultural lot that attrition of to because a didn't commentary I we always as of the about what going to of just making staying company, didn't that social and day-to-day all and do the people companies here that care which we're A direct that that reprioritizing really disciplined who point. had we the decisions doing, a our always awesome on to big we're relying that sure and to just as just would were were teams is sort trying levels a companies. on compared were are that lead saw company the people we adding recruiting we lot on talented people about sure at and meant One that for I probably the there who already from So a basis don't that face and have more make are than of question just have we're outside. to I volatility mean much the I'm company outside, to wanted. of And we to sure the at this from internally. you that who which right as to what the a think jobs, doing down new way not get rather add future a I bit lot want make it more positioning unhealthy new lot, recruiting getting the make Metaverse. COVID, we this keep is building the want are the thing just want premier the attrition the a at we're lot want people company company people go for new have we a in ourselves of is interaction people how It's where at

about I here. If you care those things, best the getting we're work come people think to

that a doing and continue I but that AI on to people of lot of the problem. here, you know businesses think that. the believe types discovery that's formats, about of If across And that's seeing in place see that And we're are doing and them too. for drives ads care all the value I to it we're I work world. grow, want stuff people the And different attract like awesome talent. people around great only who critical want a lot engine, just of sometimes model, a of that the And these

think So yes, over attrition I up I down mean, and time. see we'll go

as going it's and bit periods actually little don't be like I the where Dave a where but a doing we're to now, more we're to we're prioritizing necessarily think over us I company. okay better is this, focusing unhealthy make growing think says, that I think going long-term.

next with go Our is from question MoffettNathanson. ahead. Please Nathanson Michael

two-part past, one Thanks. I problem, targeting. measurement that and clear is and have the Dave. Sheryl one you've in IDFA pretty a been Sheryl, for for

not consortiums are Can an term maybe measurement the you from before? of can the a been the just how us then clear So think AI on any Reels give close solution sense you then are that questions. up? closing on And the Thanks. you – can do a rate quantification, give quickly revenue from speed quickly update Dave, monetizing traditional updates feed on you a or you which you said where targeting, can issue, of is speed it's Reels, gap News how longer of you So you've And Stories? at us about? on were that us on could, product give talking not more huge you same assumption. the impact a having those but of And it's my and if from some

challenges talked advertisers. better performance. the measuring what are mentioned, both mitigations because on interconnected So for targeting I've timeline, challenge mitigation both. measurement before which talked about through and they're on you We're iOS, from the we've leads is and targeting two a better and multifaceted to They key working before

best first, systems will and and target data. on it as working and test the and automating improving learn we we're less better we supporting to On advertisers our we do with advertisers tools with have are help that practices

to close. particularly for more close able anonymous gap measurement, have have businesses, to to underreporting them. is part of with the of rest advertisers, work aggregated but good shared This the with the and On us a challenge with take small that more and data. a to do because longer big will We gap we've been we

longer work obviously, more a way. We with in have tail to and resource-intensive them

can Yes. the And I address question. Reels

few touched it on we've think times. a I

that's of meaningful So that portion stat time Mark have the people's additive, XX% over whole lot it's I now people's a if time I Instagram. know Instagram. on a gave but up on it of makes don't

ramp So going to said, multiyear opportunity terms very to journey. that in Reels. Sheryl ads speaks good that be, in a in we going a Reels, it's days being it's of there But ads – as take as but it's being said, to early

we last we at look mentioned monetizing in time XXXX. was Stories, And Stories, year, you at a in similar Stories of rate that feed. of as If end on ramping the began really basis a at per markets, sort developed

good us be that for gap close take to spending people But it a will it a time that time Reels, time for many to period. a work gap. that it's across amount Reels are close us in good over for to opportunity, that of that But given is to going there's opportunity on done So years also that took and the be but world front. that still is similar

Barclays. Ross with Our next question Sandler go ahead. is from Please

Yes.

for follow-up one Sheryl related Just question. last kind of to that

So this interesting targeting kind privacy-centric of like where around targeting seems for now new of the like that kicking There techniques. use or IDs we're in or a no there's lot targeting. world industry one can other cohort-based around ID-free, mobile contextual ideas

some a them new and revenue meaningful techniques I the the my you up Facebook how And data that way? the expect have, first-party to So size is, So you here are revenue? do you given going to all kind in of that to Or forward, able maybe of question these think opportunity a competitive lot. new the of asking rest to perform of billion some techniques? show Thanks relative industry? these more might to do of be when of you looking more I'm thought even to you with Facebook advantage, is and broader on lost ad open claw what your up back guess is, the do $XX dollars Any think that?

mitigate back of on challenges, that some One, of we Dave about to couple we what have how about. are Sorry, When can solutions the going there's a are site. forth. think I things and think you and be these

we'll point least our ads loop, a example the to are the as of commerce to of Click-to-Messaging things at like Click-to-Messaging some products using develop we as people ads, good So close service. are over able to directly are efforts connecting you're term, our that on service. successful where customer, a on our with the happens loop commerce longer directly close If be end our

this privacy The other that think, able you're interesting question advantage was to is but in very data, safe competitive highly very been I in efficiently. thing use space is comparative about a have that that right your a and relative we

Some some over once headwinds that and long they to the advertisers on run, for settles going causing near-term of that's the But the relied get data go us. has challenges return. changed we've out, are where best

on industry. are solutions is without also that working the highly we very on have platforms, we first-party have that and data things So to important able We're still we engaged working target. we're use to measurement

So have we advantage long the and think offline challenging, these you advertise across a while opportunities times over online. do when advertisers are look run, we very to have strong competitive both the

from Please Brent next is Thill Jefferies. with ahead. Our question go

just far Reels it's repurpose And early taken from there that Or but Reels incremental seeing learnings early we Stories and then feeds know spend? I to Reels? is second on Are you've and question are that on get learned the advertisers Thanks. budgets. are you they away could monetization, overall into you share? so

can I those. take

couple it we first, process that that product we a enjoying, So that are which described, that into true. able consumers on things is of are the if advertisers there's consumer know the I've if are product a is move to

both talked into text, a the importantly is of the is front for Reels, which already fits the all ads of done on the is front. the format format is but which great because video, us Mark the on things we've consumer ads well, those about, product. which pictures, are format short-form As

the ads help to that create we we and properties. we to are compelling our of format offer place and need help different the to advertisers across create Then them ads able to need So advertisers.

can have place a ads. you We places lot of

lot we've a possible. experience a in are we a but automated of things, ramp, ramp. as this, as have and learned on We it make It is multiyear

for on for to rather create goals ad, that will the end On it to perfect what For give of try fit over advertisers advertisers the ask the and then components better. and targeting end ad are you real time. figure out than that example, the we you ask them, create the more work suggest Things those can the advertisers' products can goals.

And message to you, get you're across part you to you're tell tell of us compelling our trying if Reels that. put get us So a different you conversions you or can offerings. placements people to to is very ad then on-site trying into we

teams, we it's of clients, just product, our global returns to will goal have we we where monetize roll time, are of who I budget our are think and SMBs, and it's always are we as can there large compared industry out budgets when delivering And incremental partially, is And budgets, that with budgets. because we're some what parts Instagram an it's do continue they being new or those a great products same It new grow. reallocated them roll their off can online Facebook have the way. to our there's the from both. of incrementality budgets, street, get or win to the on own we over largest and and out sell working budget and feet time, Meta leading other our platform to to show our When with always working is as advertisers on On which those people ability really a our a platform, the and ROI the long grow our of that grow budgets. Over budget.

have Great. one Operator, question. time last we for

Very good.

Our last open. your Loop question with go Please Alan is Please Gould, then ahead. will ahead. line Gould the be go Capital. Mr. from

questions. you. Two be And you competitive about you you Dave, be you the seemed – Any were can say on TikTok taking quantifying you confirm, to impacting MAUs way question. Mark, now. issues down impacting TikTok, the open sequentially quite you industry quarter, spoke Thank Facebook? Thank in would whole did of for just how the last is which XQ? much think

because overall in I MAUs that it feed loss over the expect think be we will that to in Europe. And think decline down. into to Russia, users of of tip to Alan, global because will in a sequential be flat we Yes, do there

Facebook reminder, on restrictions access a March. government through as early in implemented Just Russia February in were late

Russian some during service calculation. as still were on our users QX users So active our

the So quarter. way the is the calculate just we last of month part that of MAUs

QX. into spill to going that's so over And

Obviously, with efforts video industry short-form other strong about broadly, and market. time massive very Reels to that we're we Reels got like is making the and pleased us but with grow the share the we've competitors important the clear opportunity and offering for have a to offerings we're – we're are have it's that for for think and the with that compete product. pleased I in that TikTok, opportunity what

appreciate everybody, look you, you We Thank Great. for to speaking today. joining us again. your with we time, forward and

conference today's you us. Thank joining call. for concludes This

now your may disconnect lines. You