Meta Platforms (META) 26 Apr 232023 Q1 Earnings call transcript

Good afternoon. My name is Dave, 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 mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. will call This Instructions] be recorded. [Operator very you much. Thank

of Ms. Meta's President Deborah Vice Investor Relations. Crawford,

begin. may You

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

CEO, our Joining to results and Susan are me Li, discuss Mark today CFO. Zuckerberg,

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

financial GAAP release and During this in investor.fb.com. our press at press The call, investor non-GAAP is release. measures to today's we reconciliation both website earnings included an may and GAAP non-GAAP of are measures. on available presentation present accompanying A

turn over the like Mark. to And I'd now to call

a And for thanks right. momentum All Deborah. Thanks, and joining. good This we're our and everyone business. was products quarter in growing seeing

of worldwide. of Our after billion daily daily community million Canada one day. reaching people apps X our reached U.S. the XXX least the the milestone at each milestone that also now quarter billion more than actives actives use X last and Facebook in reached

opportunities difficult us to efficiency in our a make to better the update to that faster, long-term to results work vision. company performance products stronger about first execute and builds space ambitious financial to improve in share us environment our The our the our an moment, I'm a are and technology give goals that the. work efficiency I in I'll But a Now more business want the talk excited on of about. our

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position company rigorously believe that management and our technical, continue Even slowing that and as of structure I while hiring, projects our our enable is I the a remaining term improve the increasing speed will percent more our financial volatile flattening prioritizing work. will a believe stronger to improves, environment, priorities. our that on of to quality also focus position weather us financial longer

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too. work our Our message since clicked grown a XX% business a $XX to has ads of revenue quarter-over-quarter. messaging business rate. messaging quarter the run other last making build is progress I paid by our And shared the number WhatsApp using next businesses on billion business as service pillar out that then, reached of messaging

Our success here other on depends our businesses, scale that have for can delivering macroeconomic at and results effects.

our in our understand concluded average economists ads that a to that on study did on in UC supporting jobs. relying million advertisers our for every We chains with activity dollar supply the the X linked U.S. spent is revenues make. more at That on our services $X.XX to drives they means over impact in recently And economic annually Berkeley than platforms, $XXX billion

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that once agents interest example, For a AI in for support we and messaging, experience. expect nail I of customer lot business will that come

our together. time, to metaverse to code will where to this work easily on objects, tile extend them able more avatars, the will people to and over create worlds much Now be

an let's lead closed help important on open business an about I this, and models we opportunity a part development. then tools this. be I them to All of a models talk to these enable in right, And will are them now think And much help the platform create that ecosystem. to of most have standardize Right the that companies technology industry approach help open next, can improve large of language further. using the training if think that to there's the industry,

edge platforms with product other the products help for as make enable easier our will our integrate to will it at and companies this well. leading stay we And more as So that integrations.

our always our fairly experiment many people with source We Our state-of-the-art approach them. so to been and has models AI open. and can open infrastructure build of

with quite all feedback This quarter Anything, proven larger popular. as and training model those their We've positive of to researchers. billion sourced on groundbreaking parameters models along and DYNOVI-X Segment open outperformed gotten LAMA drawings has we tool, but we've our other X released our llama LOM animated XX and It and weights, models data has some visual also well.

talk couple past asked not major years. and for to the has for AI together let's CapEx. the capacity existing about of infra finally, driver out new support put I to but been well. This also spending ambitious of enough And Now plans teams over A build the years products investment major us. our increased to as couple products has our infrastructure our a this buffer enough of been CapEx main only capacity ago,

our longer have capacity scale. work to the And point, out at Now space at infrastructure. this this building in leading in we contrary, now behind we are do to the no AI

new infrastructure, although new use in continue models cases later have we'll launch. in and we to we'll need products these of continue investing of better the As to scaling, the the once of idea can we're that some a going investment gauge usage year of trajectory

Now beyond on A from metaverse. narrative focused technology the the away developed somehow AI, wave on we're we're focusing is that moving has the that vision. other Metaverse major

areas years for enabled in accurate. not on focus want what The continue the on upfront also us focusing was to stand-alone Metaverse ship will now, vision and say that's So first both related. I are and Breakthrough just both. two VR to We've device. to AI the been we that, computer

reality the Mixed stack operating Being scale. compelling of an think digital delivering involves to for able procedurally AR of be be blending AI world important technologies on will computing. worlds understanding the experiences that system built generate objects. next physical for And for glasses we AI-centric a is it for with basis and at our the will generation vision

will deliver also well. technologies help as AI Metaverse

project, the to years. made in AI Building Metaverse that remain committed will several embodying agents a it. we've long-term for we advantage the the the but remains the rationale it same, take example, of is For deep over investment avatars last and

device. Meta a last near calling Since term, X billion out. few been hour milestones are with Avatars Quest More than now the number has Now think I of reached in have $XX now than more in worth doubled. of daily created. store their an titles we've year, the than million that in more And using spend the actives Quest least revenue at half

we're new step year. big for this launched a And lots we device of improvements consumer three be show next reality since mixed for almost is The developed world years at later launch that ago that forward that It at to the was this I'm the of very then X excited virtual in a technology point accessible our will Quest gearing point. up milestone and have next-generation VR. to people. all price We really

All right.

I our seeing good business. today. products in what momentum to and that's So want cover We're

our ability ahead exciting that opportunities of our work and to Apps, all execute will of efficiency incredibly in improve Family I'm the Metaverse. on confident AI this. our have We

always, your challenging been grateful grateful being journey all for work the period, proud As of with this that of And doing. I'm on you're for of work. for that but this all know I also I'm our I'm us. you has a teams for

to And now Susan. over

Mark, good Thanks, everyone. afternoon, and

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

QX total XX% expenses were year. to $XX.X compared billion, last up

terms offset expenses charges increased from items, consolidation by headcount-related costs revenue infrastructure-related goods by and of were related driven of our lower sold. driven severance Reality restructuring line increased Reality Labs facilities Labs In by of the Apps segments. cost that R&D cost X%, and partially of primarily to specific costs XX%, and Family

headcount-related decreased and X% increased due lower and expenses and related facilities and primarily G&A expenses. And due sales XX% to expenses. Marketing mainly legal-related restructuring to charges severance marketing to consolidation spend

employees, were by our in no layoffs substantially employees We first still layoffs. with that included XX,XXX fourth headcount. the includes impacted in XX% ended are quarter down as quarter the the quarter Employees March longer the impacted November the from of over by all headcount reported first

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

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

of our Apps I'll Family with segment. to begin Moving results. our segment now

continues the Our across Family of grow. Apps community to

Family in at approximately using least basis one March, time, daily of the of on monthly X a use at a least and our billion we first one people surpassed people Apps For X.X basis. on billion

by strong were active Facebook remains billion, all Facebook MAU continues growing sequentially engagement users XX represented first X% in the the billion users March. X% across or DAUs DAU to and quarter. X.XX compared monthly year. and grow approximately last XX in globally as XX% compared grew up or million year. X.XX daily last active well, of MAUs regions to million with to

up of basis. up QX of or X% revenue was total QX was Apps ad year-over-year, revenue $XX.X Family and $XX.X constant billion, currency Family X% Apps billion, a X% on

contributor health revenue, China other ad commerce commerce year-over-year was and Online markets. Within vertical from followed among benefited and largest spend growth media. reaching in advertisers the entertainment strong in care by to customers the online

and remain However, contributors the challenged being verticals other to with year-over-year negative largest growth. technology financial services verticals

On X%, Pacific Asia followed growth World basis, X%. ad by was at X% revenue a and strongest user at America Europe of geography X%, respectively. Rest and in North declined

revenue Foreign our ad number QX, services decreased of currency all and growth remained served in the XX%. a to headwind total across advertising regions. per increased the average price ad In impressions XX% international

of from and primarily growth, by driven lower services monetizing lower advertising pricing World. Impression driven Rest by growth The in year-over-year especially Pacific was foreign was demand. and decline depreciation currency primarily impression Asia and strong regions,

continuing our improved advertisers. to are to ongoing While remains pressure targeting overall measurement from pricing drive believe factors, we for and ad results improvements under these

was million offset down line our platform was revenue in QX, items. business messaging other as revenue other Apps a decline from X%, more than of $XXX growth business WhatsApp Family in strong by

to continue our of were overall investments In up of majority We our was Apps Family XX% XX% X% representing the infrastructure-related margin. in costs. of QX, restructuring of expenses Apps. operation direct billion, toward billion charges and growth approximately a due Family were Family operating primarily $XX.X to of expenses. development expenses $XX.X of our operating representing Apps Apps of the Family income and

to expenses costs Reality and Labs billion. due loss $X.X XX% Quest to up charges. million, employee-related revenue $X Within X Reality sales. down due billion, mostly QX operating Reality Labs our restructuring Labs XX% lower $XXX was was segment, were

discuss I'll our ongoing monetization Next, work.

As and primary increasing are two there growing mentioned demand. I monetization, quarter, last levers to supply

building community, and On our engaging priorities. encouraging the ad supply for to side, experiences our continuing our make progress on we're foremost remains product focus on

the in delivering engine discovery are investments Our results.

This engagement and engagement, that because an our demonstrates finding more overall recommendations content added helping In real are people to the to as time them our discover. system. we is are contributing seen services important incremental improve signal become on Feed, we've to continue recommendation from value it we're

structural Reels Beyond a between in and was There between opportunities focus for per view time that, efficiency Feed as the more with reel our on That piece challenging Stories. more mature people are we supply continue and narrowing to gap a Reels or constraints surfaces, the the format monetization monetization further with will than to gap results Feed Stories in make fewer of time efficiency serve ads or in Stories. likely close longer monetization a content, it posts. which it than to

ability Reels of our from be combination drive to determined engagement incremental economics overall the will monetization However, by a per continue growing Reels ability Reels. to on time our of and

seen launching Instagram increase time Reels our Mark on As XX% globally. spent have since from noted, we overall in ranking improvements a

of continue overall to early We Reels that to become expect end or neutral by year. revenue this next will year

which is strong for around believe, advertisers, we monetization The seeing on is per growth of other performance, are with focus lower higher return we cost and action, area investment. continued driving of demand. side driving is growing conversion advertiser One advertiser coupled

on audience for ongoing while These AI develop for tools ads power and also us to to also from right not and focused remain shopping, make their the and our increased through technologies but receive creative. advertisers. Advantage+ feedback products innovative optimize easier to their leveraging deploy AI that ranking it develop advertisers to only gain and positive help continues like improve which find investments build investments and with privacy-enhancing for ad, eventually businesses will automation new We adoption measurement ad continuing

advertisers our today is another demand of work, Southeast by grow in adoption more bring more messages click-to-message is conversions and onto mostly and and part and format used opportunities and businesses of the scale. exciting This one platform. reporting America, at automation to to increased to by larger expand our smaller advertisers in in ahead easily markets measure results is Latin Asia incremental Scaling important continue on-site and investing help manage to ads

financial Before these use long-term given the to will we the maintaining execution operating to working increasing our is significant strong I'd to we philosophy innovating of efficiency We on focus turning a constantly leverage allows to also This invest revenue are the who opportunities for services. outlook, agility ensure us our success. our changes of people our position. and the that AI Metaverse recent our highest to the areas plans. speed organizational to increase projects vital that for enables our It increase scope the including company, about the Narrowing on and the our to investment like in talk longer our term. believe today us while also are

expect also I improve of modestly forward, time our we overall over our capital. evolve look to structure that we As capital will cost

accessing expect or neutral to net do to We time. the while a diversify debt so cash maintaining our through balance funding over markets still positive periodically sources

In addition, we ongoing monitor to continue developments. regulatory

the to its in IDPC user for inquiry May in to a transfers We EU a EEA order such expect transatlantic including data, transfers suspension of issue a Facebook data and previously decision disclosed fine. relating

possibility both ongoing cannot data policymakers proposed transfers, continue on new will privacy framework Our of with we consultations be not but to such the of time. for before in deadline suspension that it the the indicate completed the that be will exclude EU-U.S. fully sides Atlantic implemented

processing evaluate could operations and the what also otherwise impact to force. extent IDPC after is in whether privacy even new data will our We decision a data framework

outlook. now Turning the revenue to

billion to to expect We $XX.X $XX the XXXX revenue billion. total be in quarter second range of

total be guidance rates. current headwinds second less the on revenue Our than quarter year-over-year currency exchange will to X% based assumes in foreign growth

our million to to anticipate restructuring range related $X Turning total costs. XXXX consolidation in outlook includes costs $XX March. facilities to to in full the billion, charges the outlook. and outlook provided $XX personnel other expense and will expenses billion our severance from billion of updated year prior $X This now of We be

We operating continue XXXX. increase to Reality expect year-over-year to in Labs losses

now the to Turning CapEx outlook.

be expect $XX capacity Reels, increased to billion Feed and our ads, support range investment expenditures in reflects billion, initiatives. $XX our to build-out an ongoing AI unchanged of We This with capacity outlook from AI to the of along capital prior estimate. for generative our in

rate tax. On be XXXX XX%. year expect changes our to full U.S. law, to to tax around tax any Absent we percentage

In business. a solid our closing, quarter for was QX

of strengthening Our opportunities operations the on global us our progress on efficiency community of priorities execute financial well the to position ahead. made We up and while improved company important continued to the which grow. company our sets the

let's Dave, the that, call With up open for questions.

you. Thank

now will for Instructions] question-and-answer [Operator Your of line Brian comes Morgan lines We open Nowak with the session. the from first Stanley. question

Your line is open.

for next potentially large long-term Thanks about my advertising? Susan. Mark, on impacting think AI taking your generative models for some more you impacting and and one of one -- models generative two, five Mark, the first advertisers do over deliver two. How business the advertising gen value division language have and The one for how AI questions. I you see three, you ways finding to your for is for and AI years?

Then the one second for Susan.

expectations thinking we're about as for Just beyond. 'XX and hiring

potential your ink how about hiring? been little the to in X% just there's some AI think forward. talk thoughts about X% a about internally in long-term And factor that does Thanks. I you using press hiring Can us to going bit?

the off can generative AI question. by taking I Yeah, start

we that shipping come in I'm more these of there to will as things Although more point, over coming this details aren't months. start at going many of focus this that share the

here. big there's that a I But think opportunity do

to for by more visual on creative. specifically then I to which different and time, But advertisers. engaging the do create I that, help think You of eventually experiences, create have a it. help about there's We advertisers, it's create going bunch making don't more engagement, to opportunities that over asked opportunities advertisers but should think that the creates itself, also tools more side

us do to want strived of now who for the creative of opportunity. could to able those them for we've able able an I to exciting always just and advertiser possible be have being So much what do a tell objective the have work and think, more as there that, us to very their just work as and be be then is to ourselves

acting a be convergence the business successful business I AI of places is chat. see customers. afford questions now, with also in we and lot tens very a answering a you'll are going most interesting in them lot of behalf, obviously, that up businesses people in some a the think businesses places and messaging you ability where once for the way have can of have where lot can people that engaging of someone of for small agents to to their agents afford have there's where to on between messaging, businesses to with engaging more basically light of chat right millions messaging And have AI

that pretty that, I So opportunity, think could big be a too.

just we're the at. looking are a those that So few of things

I said, is literally broad. our ways. multiple is in every touch this products one think think very going of and single to this I I Like services

this it is that's and new whole on just we're working -- So technologies a and wave very set and big company. across available, of the

Hi, Susan. question. Thanks it's the Brian, for

X% to You And I clarifying. the head there. X% was about count growth worth it stat thought that's been were out asking

So increase internal X% in company from a Q&A year-over-year. employee count only Mark to mentioned that had he something X% comes that to expected head recent

excess employees have in the already we've to And May, we to hiring budgets those of resume we in And and as as actually will recruiting layoffs been complete head expect we clarify last allocated. I year. a we previously also X% freeze result was ramp that we speaking What have Mark been in count want a April about our said to as XXXX X% head broad-based half pipelines. count hiring, growth would that in and for is up

you we're the and find been we hiring AI Reality be areas And of on about. internally is focus priority AI it's have more productive, areas we've about. hiring using to some long-term developed that like in workforce how are AI, And have Labs, areas long-term will infrastructure, to more And into our support how make that that generative will productivity as into you'll ads, factors don't yet as the much excited our getting the will But think asked We biggest something talking clarity we across very efficiency. that industry. hiring. also tools resumes, but certainly employee about visibility more on on I our begin enough thoughts enhance

from the comes question Eric with next line Sheridan Sachs. of Your Goldman

open. Your is line

gardens Maybe can. for was there if much intrigued try to Mark, where WebX? source systems I you driver questions. in Can ecosystems. an and open saw are you with respect coming more might the or I in by from what of priority standpoint walled talk so be comment compared taking a off open-ended want two, little what a your lot with investment bit to about a open Obviously, about Thanks to more AI. either we WebX of do, to mobile, we're to and a AI systems

maybe for Susan. And then

the architecture what concept driver data for as about quarter architecture revisiting terms a your of AI mean Is so to think data any the to much. term. last medium or to intensity? how of there introduced over term us capital that center You medium about long center Thanks might update there long in for

I take Yeah, the one. first can

of distinction there's an to products the especially I write and we software offer infrastructure, think that between the technical support that. that we a important the lot

anything not code open built, it's open that have just an our even open of done sourcing core -- whether a infrastructure we've lot infrastructure that products sourced of products or we've open that -- for like are themselves the that. though we compute the the a we're project source we've historically obviously historically, And lot or the

do And we're the that some not why to try a infrastructure other keep this the software the companies computing in where think building reason of I we unlike selling the we're we different cloud space, that why is proprietary. service

if better the use the of us, Open that using. in tools tools benefit those of on we can, And way which business make make basic cases, from For can down our it's others those Compute, therefore, others and things, costs some drive like efficient, we're that more too. the industry standardizes the improvements

on a the than or companies just degree, to Google So game infrastructure different I us. Amazon, or playing incentives like think creates and we're some that Microsoft for different

going overall, So terms we with specific to of do. I to going is product that's and work to that, open the us a tools. of more some in the course, But be sourcing models of of think work integrated the itself and lot do lower-level things lead that

think to creates it's I be do that terms to that in to models, open be the helping a open. an developed here, going important. basic would is unique in needs of think I of to Obviously, our everything be not that's build and be something expect value I But way for us So we this a which bunch out products. going pushing to is ecosystem

Hi, Eric, so X had I think parts. your question

year The update but architecture center the progressing there, that we're data future quarter. data last on first was And an construction centers the for building capacity. new announced with we that we're are really intended

online won't come for a years. few So they

that much share is that, too there, except have to So work ongoing. we more don't

your think second intensity might I And was capital AI about the question over really, the how of next few part years. drive

CapEx having really investment as X So about can think our you buckets. broad

support talked an storage the of We become time. about is compute existing capital this and much area continuing in much but do more to before, we've The so compute first, have needs and intensity we've ongoing to over efficient general do are business, very terms where focused non-AI needs. on

spend. the and core and future will our of AI drive good those today, AI of content, we investment of about is ads, that The and area that's there, our focused ranking in plans feel making the investments, return spend measuring on of discovery organic our investments of unconnected sure AI really that engine, supporting most that second the ROI ranking which is we're really and the in our building core terms

going bucket in understanding third now the significant earlier an use And it's the then think this is and stages work this early And AI. done. the investments represent investment overall possible to little of say that opportunity term. a And And this intensity various is to a for us I still that to too do capital applications AI is emerging beginning around near the return in impact opportunity We're us. support our relative for is to other really curve we've may CapEx on gen the cases. of the some how

that to more CapEx our the we focused between power out But building we So emphasize striking on I this capacity and remain the to AI that in to in future, we work. the overall being it want near mostly the efficient right I with spend balance extent spend. CapEx need to expect be

with line Your comes question Shmulik Bernstein. from next the Mark of

line is open. Your

advertising? this Mark, kind one's where Yeah. is A of digital but technical certainly of you competitive think way. In world, type the of the questions. today these doesn't prevailing AI we of all couple compare privacy I of view bit it level But that field, how the pre-IDFA a is Meta playing because relative seem position if and tools do that will cookie-application more in see integrations philosophical. light

then And outlook second, we've there the U.S. of and revenue But been in light you. commentary additional kind quarter-to-date strengths guidance. is I the color on weaknesses of you're trading about seeing any share effectively appreciate certainly where down, Thank for can the about of some you Susan, and hearing consumers beyond?

go take can Thanks, Mark. ahead those. of I both and

the about was positioned. question post and we're how first your ATT So landscape

environment I just making impact deal, changes. that ads business, great online progress of this our But direct in advertising is in mitigating ATT's a really, In terms about of really the We're we've reality we're think, this the platform years. over last of few course, now. the certainly the talked from

current the our on-site performance API, in And mitigations enhanced then that on second our of sort not with of introduce well talked past, new think, focused we've the we've landscape the our that in features ads including but things of volume us direct across both now ads and to all, AI the conversions for about we're and like investments have the really, increasing enable I ad signals really, with as improving performance investments, think of I invested objectives; as with only tools advertisers. in

terms here I well in So we're on-site quite of think positioned conversions.

offerings growing of We for have well been have a us. lot that very

business what we've talked terms and and about that for ads has opportunities. new business of meant a think I growth click-to-messaging lot driving our in

think, AI different conversions to working well and introduction ads, of to lead just ad there. our performing modeling we're there improve support ad AI-powered formats and of then really on and in And products. I been, ranking, including time long Other formats have are terms ads, that shops using in we've new that been are again, our so investing for tools improve a the systems, measurement on-site

that is seeing time the work So work environment, I think us relative in that Again, conjunction think, pay we in for long our feel off. just that, to this good quite macro a been about some with I we've see has enabled doing stabilization position.

revenue second strengths And well then in performance of the sort your was about as weaknesses in outlook. and QX question our as

seen advertisers. in FX QX saw In which in advertisers demand, among in to terms began was believe war, performance certainly which there in of the markets, as revenue easing saw including and for dropping Ukraine lockdowns play impact relative costs of And you've China we due, to QX, part, the users then stronger targeting the lapping well. we those QX part acceleration we COVID a shipping And acceleration XXXX. of and in the particular, other

a quarter we of QX the demand also revenue than from there of be in to first half Looking there XXXX. year, back currency certainly QX relative growth quarter. terms it first QX headwind is and that expect Russia And going forward of a comparison without tailwinds it's the less the to was in in as to period moving easier weaker and full then into the year-over-year certainly coming compare lapping the to an are

visibility With And that with year volatile the environment. last of our captured The rates, advertising inflation, cetera. developments new And and banking reflects remains that markets it it have broad et outlook. a absorbed hard the rest to said, QX and year. perfect it's will of there's how market interest the stability, over has we macro for dynamics broader in in of the the on a lot expectations range economy and specifically a higher feel those for QX impact

regulatory challenging a environment. continues also be It to

again, we for that hand, investments lapping end have we the we're expect to monitor Core comps. revenue pleased year next And a by those we're Reels we're advertisers or remain neutral continuing strong. will on paid with and off. closely. FX Again, engagement how that that's will revenue So expect the But been the performance relatively And today we've be trends tailwind. is other delivering early year. a of headwind softer become the something

So we as lots and beyond. QX -- beyond look and of into puts takes as look we

from next the comes question Your line Anmuth of with JPMorgan. Doug

line open. is Your

for long-term Thanks of building the taking muscle about financial questions. Susan, discipline. you've goal talked for the

this environment, so the you what given durable muscle? Metaverse? restructuring that it's far, and in in you macro we've AI far the ahead sustainable are and term given the especially how Just across work gives And even all the building on a business along that better confidence long seen the

Thanks, Doug.

of and year, are this work I couple A financial imperative, components is operational really undertaking of this. of but efficiency. of with increasing that think not the there solely we've lot driven especially sort this to by a efficiency focus been

and think, I been a of the has the architected been, foremost that's So around work of goals, one that. lot

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really of that products to and investors And areas we quality focusing to we've continue be We're as faster. efficiency work, sort layoffs like including developers in other the we going going sorry, increase the streamlining we're get product forward, to including the in person of might increasing also collaborative across make we'll or that the and continue that to tax quality velocity and cross-functional development. frequency faster. helping build focused of restructuring down in relationships process build slow where ship helping work, time can on and done of move development out us direct on the things And the sure the -- implementing and we're or been investing in tooling organization processes

very think all to to be is come. I expect us I this in this -- the years for much ongoing So all

of Lynch. Merrill of question Bank line Post the Justin America comes Your next from with

open. Your line is

be for thank or Hi, Mark. This could Susan you.

think went how XX% Facebook Instagram really wondering on site? interesting time user stat gave. usage I Obviously, the health DAUs and you to up the quarter. But the you'd characterize the just base of this on

kind here seeing flat I a saw well was what the is real or you really there catch-up could But usage of with of spend And Facebook stepping certainly think as area just helping could content there Asia there? you think are strong. I is as that an Instagram. down. where out, But time be

Just wondering core the And you're you. on seeing what thoughts what there. your Facebook. Thank

Thanks, Justin.

from that of a benefited engagement the note with benefit Facebook quarter in user growth. should terms But been community of strong product engagement for execution. some seeing. I pleased strong and core particular, think has In we've growth so we've the growth, QX that growth I that DAU the QX, also quarter-over-quarter is seasonally of trends terms in In been us,

investments and -- and engagement broadly there Reels sort content more of I well. is of in incremental mentioned and as what You is think also Facebook made work discovery or driving is it's is on expansive beyond for the on driving the sort ranking I engine is whether of what the connected growth Facebook, would certainly that say work in Instagram, a driving us we've part

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you. Thank Yeah.

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passive has total sort last issued XXXX the in two especially that coming we question, guidance of So sort sort -- guidance trend since for your expectations next three years. first how first our in how downward QX the our much beyond year, expense or has of impacted down, the of

lay the we that expense for that are building So that's we to a longer our certainly years. regard shared going But undergo the our we're haven't as ourselves on the lot translate working long frankly, exercise. to of that muscle guidance term something run think into out efficiency And map. with I planning do we internally is we as long-term road

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of coming years. So again, to ethos on efficiency but guidance we much have very out do a part I be to overall the don't the the yet share years, expect

the our transatlantic On your second potential is on to business of the question data rule. European impact transfer what

want the which to terms if would that, comes new be variables would in final last, the a that order U.S. privacy hopeful and I important before a of suspension. for But first, specifics to emphasize, we it lot framework the be know continue don't be So will overall to EU of deadline how there's a a suspension in impact. that we order long determining implemented

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ISI. with comes Evercore Mark question from next Your line of Mahaney the

Your line open. is

restructuring to billion questions. $X see that still billion QX Two $X or you Did about? Are QX? Thanks. there talked we much charges Okay. any that in that Susan, had, pretty be of beyond to in all

opportunity click-to-message. around And could I wonder if just then I to the broader back secondly, get

but -- seems always really has messaging but of just some two The these undermonetized started that change. with assets, numbers off becoming sort to or had leading other You've Facebook to three the It's are material. really assets, have of now some had versus quite assets leading wonderful for time. WhatsApp

of there's in will, cultural the opportunity you shifts, is messaging? embracing just of -- real that really kind to a mentioned take much. How you what more? and anything out and really power advertisers you it the differentiated take You there marketers there is alley can get given How -- blow America you terms to in realize kind do are Thanks, can product of towards a steps really Southeast Latin Asia. if more very

Thanks, Mark.

restructuring in about are $X.X $X range then restructuring range gave we $X billion charges, charges the of QX of billion year. and for a full So billion, on the to your first question

year. the So throughout charges will be we do restructuring expect that we recognizing further

scale continued on businesses Instagram people And of click in WhatsApp, opportunity and the easier I then and direct area invested is This to connect. -- investing for continue And to question those making that click-to-message, we're in WhatsApp few We very look an does ads and sort a of mean, We've a what earlier excited to there? it to in opportunity growth particularly the opportunity click-to-messaging are area. about Both like lot. second see particularly the the we the we're in curve. about. areas

First, to make ads. we're trying it really investing in easier to create

a ad creation native manager, ads invested we've in in WhatsApp. experience So last in also directly We're in the partners. experiences scaling revamped year,

API, cloud-hosted our ecosystem Messenger for now so good best-in-class WhatsApp, that the have developers and build businesses. can across Instagram of solutions with So help we hosted experiences API

down also more making And more on we're ads further these driving action performance then funnel. working by

other introduce like new ranking payments from these on outcomes. working and we're conversion We've better introduced tools. and features So optimization to to commerce new in-thread ways drive ads and yield

this a And So Canada, We're the Southeast for performance. But here we're a way with but for to already hopeful their and prospects. strong we engage We're beyond that also growth excited experience engage the messaging Latin think see it's in to is Asia for earlier just common other growth customers also every U.S. big and here. to today. easier, of markets make as we're businesses businesses to customers America, see and that more trying and part the better advertisers, core and opportunity we'll markets. there's in off customer with take in seeing there where

Your next question comes Barclays. from the line Sandler with of Ross

Your open. line is

and the One AI. more on infrastructure generative Mark the open of Yeah, for models for sourcing hey.

to of ultimately do that view like you call for an do of thoughts plug help think Or of APIs it, kind come on that types and any partnerships? engagement there in to other, that? could of out be revenue other that models business developers improve you on So Just Apps? Family opportunity your as

on time Reels in question incredible. ranking. content increase And back -- the spent from and second is Instagram then Pretty XX% the to

other time of increasing you're Any and discovery apps Is that? at Thank you some doing the layer how benchmark was increase you in spent? Or it of that engine that? engagement you is And right much from much there think how XX%-XX%? recouping? for now now, to you're kind thoughts about TikTok across on that more look So how runway like lost do folks you. blue like when you have as

then can second Sure. the take one. one, take and the I'll first Susan

industry across of different things have using we're folks for internally. bunch we've if the AI you right? of standard lot become at is a tool the is has tools for industry now developers we are generally PyTorch, also been use, very in generally tools, to that -- it's So because who space the look are On models what done history all a valuable example, of us best that the and that building that provide using in the which AI here, with a

tool the the So same. chain is

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really innovation incorporate number Open us are an models. infrastructure. Compute and PyTorch is own another just in example, a worked There model has scale of as both well I gave for efficiency into our that way, this to both

there's aligned basically this moving direction. incentives, So are towards our in -- I think,

that getting I will present themselves. be those quite the The early hope you can't opportunities. said, a mean do I be are asked going things to with we that other So This developed. to come the in all there's Now all what lot work, out, might to figure think, is opportunities, foundational so. now. I speak right? and if I better there more

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So way we'll that. to need to figure out do a

time is Instagram Ross and of spent Reels how in part a about And your driving -- on the an really much question, I see. second question which we runway think increase second sorry, was there

very far. platform kind So but we've so expected quantifying engagement seen pleased with of we growth, of we're Reels drive the certainly to the in what engagement the aren't terms incremental

to And we're how has the that something growth pleased and the not continued as over we're engagement, that's very Reels, focused ranking trends increasing incrementality but absolute on that's we've we've time, only seeing. with about improve where talked on the incremental grown and been very because we've the of important

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of terms is incremental discovery broadly engine more the then across in And the platform. how driving engagement

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one for question. time Operator, have last we

from Certainly. will That Thank line Michael the Nathanson come of with you. MoffettNathanson.

open. is line Your

so you much. I have hear me. Thank if you can two,

headwind ROAS forward. giving from Anything confidence confidence a the a to appreciate that Reels share can Susan, down to can about the on first neutral points a you going I what's the is, monetization tailwind The you line? about you But a bit adoption? or share data it goes

to on basically being marketers that? to quickly, -- hear. And the And regain helped then by adoption how anything really you Do Messenger how marketers' loss just the retarget also were of is ability So think Thanks. on Signal? messaging are and driven improve post-IDFA? updates Signal does all messaging great loss you maybe

Thanks, Michael.

that through have revenue -- on Feed we're of I growth have the factors is And platform lower to cannibalizing a the down the the balancing versus that ad relative to efficiency we which the spent Feed shared Reels headwind think, from some it to incremental Stories Reels on for, engagement Reels surfaces, been which more and time the working basically, driving we're engagement of while is we is monetization two Stories. working and mature cannibalizes. Reels, the our here, that on now So degree

early would on is overall two really track economics determined the thing by I next The I structurally it's to of we're year. neutral so to that ultimately, Reels And call Feed of and Stories. of that combination to revenue end -- or do to think But be is important going becoming by different -- Reels those things. we're year while Reels the out from

we from And we structural parity current those Stories we expected soon it expect with we its monetization have line anytime continue incremental will monetization so time sight because don't and drives getting differences. or of Reels continue of to -- because we of improve will engagement, to levels. per But Feed

or it by despite get year things expect monetize those of to us combination and efficiently. that to as will beyond revenue the positive of neutral doesn't this So revenue early that we end next,

marketer question face your retarget was messaging messaging loss. and part improve signal how a does updates of and The on second ability to

a really click-to-messaging of of important strategy terms in are objectives. on-site So part ad our ads overall

part data it big a first-party of of And so playbook. the is sort

we to a is ads behavior offerings it has create for robust from us important first-party a that really with course, which sort businesses over in a time. And for communication think -- with And then, for our of broader avenues is which format, data directly perspective, broaden of happening platform hope so landscape business us. think that's on of signal-challenged I it's both both consumers way and to monetize messaging messaging their I

the that with progress have have going the opportunity shown there. click-to-messaging that excited really We're we excited. very forward we're ads So business and

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

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

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