Meta Platforms (META) 24 Apr 242024 Q1 Earnings call transcript

Good afternoon. My name is Krista, 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. [Operator Instructions] This call will be recorded. Thank you very much.

of you Director begin. Meda's Dorell, Investor may Relations, Ken

Meta and Quarter Thank afternoon, to Platform's you. Good Call. welcome First Conference XXXX Earnings

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

started, forth get cause you forward-looking Actual set statements. by materially today's remind results remarks opportunity our differ these materially press differ release we to from are take with I Before that forward-looking include these could the results this earnings will to Factors today in on in may that to like annual our statements. Form contemplated would those filed SEC. XX-K and report

statements Any future this today, as call of forward-looking new as events. on no of make and assumptions that statements are we based these obligation a information we result or on undertake update to

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

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

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here is now And Susan.

Mark, and everyone. afternoon, Thanks, good

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

Sachs. of Sheridan from first And from Goldman Eric line question Instructions] [Operator your comes the

guidance been you length investors but respect today, more cycles you're a giving Labs Mark, you've and using Maybe analogies, I products about this think mixed long-term with the around and reality. depth I'll investment through two-parter. AI and either not Reels. broadly ask Stories the other should analogy those of to how used like and/or investments of know Reality

watching the to or utility tracking And you investment the about along terms talked AI on that What know for in ecosystem. advertising with the on is are you adoption cycle? is impact side both adoption of the AI having consumer

Yes.

main we little reach timing, it's on to that a In more, see on I just of much And we I think us building the usually out at much thing the and could years, focus because cycles. focus couple the previous from terms take, less somewhat that extrapolate we improve it's of scaling are to could for monetization I of be before But difficult a areas until guess the be know, don't they will on scale. other that don't like products so new products. to new things these scale higher typically significant leverage is monetization

Stories of seen we enter a Reels basically, there's think and is where the this we've mobile that we the and for then build I with all period and and inventory things, And and time think monetize revenue materializes. even investors scaling I you it. with kind monetizable before these opportunity first where the there period to So shift out that the with see clear that smart a of product

other it's case the other And revenue that case scaling, we're money time, be not sometimes often during thing. from from that can it's It it making that things. that displaces just the not when actually

So a I profitable. scaled like before for and as it was profitable became was us not mean, with it was you Reels, there scaling where saw it it period

on I think I'm analogy more So that's the that making this.

to should meaningful that's scale, year be kind don't is should those good launched the in of the really hard engagement next going is growing say thing a and of AI scale, any Meta on have have we that the so it's and all focused products main them. the for And to I AI then quite year all they're stats bit I'd this for that that is products I think way track businesses. consumer we on But I'm the that other up being are confidence as period that suggests -- very But a a on think of next large what on what probably share just that. end we to if around product and lot focused a

that's main was point So make the that there. I to trying

next Morgan Your Brian line Nowak question comes the from from Stanley. of

The model us of give first you're to improvements is unpack or about using? Where you Can use of the a for recommendation even, of increase further examples you you're here? you Susan, the are of where one little sort basis on areas engine the relevance and running not of talked us? signal the opportunities that opportunities from for just sort still in improved when data a see suboptimal models. bit improvement or Could the you capture

advertisers factors then you you you've second to test one, that main And adoption of encountered gating 'XX about of these do the how the get think sort tools incremental tools? about talk and throughout of 'XX? what driving some are addressing when for of And to AI advertisers, sort

Brian. Thanks,

where So our for leverage drive opportunities engagement. models to first us are more there to question, and recommendations to improve your

say products, including recommendation One things of recommendations, is, et of their has cetera, had historically, each in-feed AI own I our model. the Reels, would

watch it power increases X% deploying to we aim model multiple XX% meaningful partially Reels. new started model And for Facebook gains, by with been we've in using to recently, the time it as We recommendations last developing power products. performance And architecture this. validating year a of result to saw a this

the we're not year, to model This singular planning across also architecture tab Facebook recommend content but actually just as to well. Facebook's Reels, video extend

will optimistic results, the still that recommendations using relevant specific we'll And successful, power recommendations. too to increasingly time. to share model explore over it's architecture while it's So video early we're new other if it unlock

what a better I exists, can consolidates the side. deployed that driven performance last models Instagram as larger we on and and it of new say, architecture ad at year multiple course into that multiple to feed Meda We've the we about performance analog characteristics talked like the smaller deployed objectives across And ad types model specialized that Latis the time. multiple models learn and more improved and improve and little of bit would support Facebook XXXX over services, Reels same that's ads ad across objectives. at And

and And to course even further app web [indiscernible]. model for performance enhance over we the of objectives and XXXX, expect more support like and include

in, -- work engagement both a ads we're performance underlying going investing deliver there's architecture lot to expect the and in to time. organic that model increasing that So of continue ads we over for is

seeing asked near-term second this. of The is test we're it's into the you There early, our question tools. sizes. advertiser The adopt getting advertisers ads are features GenAI tools. flavors and verticals X around to put we ad version more that was features have of but around adoption creation GenAI these And creative across and different

remain I for expect will adoption But XXXX, area with outputs businesses, this focus us the a and enhance the big improvements our that to small underlying expansion for at outsized that will ads image of and we're to support continuing scale. seen generation, new personalized models features of variations, those text work supporting make we've are features generated and of particular, and to quality image In foundation more advertisers in more performance we map. and right road on have expansion background the to create now,

longer-term around The is AIs. business here piece

that We or messaging a for to supporting asking AIs availability. ability its on more businesses product chats represent by shopping for people starting to information business such customers set responding them as for have cases use been in the up testing with

the consumers this saying time well. have as of -- these also while customer that to learning early. been very Messenger AIs a saved more very, over and hearing a more tests timely testing is we're feedback businesses them this with handful So these from on And times. We've businesses with response performant WhatsApp, significant lot time make good and AIs we're noted

coming So we'll and tests broadly it it be here months, make over expanding available. we'll our take the time continue more get to we these before to right

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

growth of kind do think leg and that Reels as of particular, here? about the or the back time to from monetize, of there of back next playbook that of Facebook, kind kind such shopping here? kind of Instagram monetization on platform of guess just I to a how now road on large we beyond spent about kind a talked insertion from with any on map we times, get we In kind share color ways ad product few other of to

you And is heard of a that Susan, could ad how in particular, on about Any market, there kind trending? spend advertiser Chinese-based previously, of just contribution. then, the lot color we've kind share on

Thanks, Mark. Sure.

grow through and Reels So improvements. increased Facebook that's Reels we Instagram and as ranking don't we've revenue ad be our quantifying impact and and continued performance continue but overall on to And both growing in before, delivery there expect revenue. going the remains are -- positive across improving we we engagement and by contributor going higher to efficiency monetization And that supply. mentioned opportunities us QX, forward, to driven it plan a from for to

DR to to are to native in performance. optimizing interact more experiences, And ads improvements. we easier continuing to actions intuitive which especially important like On performance the are for with investing through call make ongoing also feel post-click more optimizing and ads ranking Reels. to improvements, We're we're work and

Instagram feed we're we GenAI small Reels and image businesses. seeing, rolled Facebook outsized tools QX, adoption across with out having introduced Instagram to again, and QX, In expansion after our it in

though even the basis and per ads it time performant. has excited Stories. making continue we're year, a on And Reel more to lower remains than ad opportunities loads Feed over increased last about So both the these

formats future structural So more format to and to ways being we're Reels video-heavy, we ads putting of will really constraints to thoughtfully they're ad personalizing the opportunities to grow experiences sure think with front creative including make going higher increasingly it engaged people to in we're most density in the that for when look loads, the address likely supply continue and interested invest and which them. in and of be

at was in year-over-year by in advertisers Pacific Asia strong and segment, asked spend you QX. question This gaming, around Growth XX% second it's Advertisers remained from which our China. The in driven reflected commerce online the fastest-growing remained QX. China was in region and

X-point acceleration a including North revenue well, in as geographies other growth total across strength from see did America we advertisers. Now

we the aren't would ad over I QX we XXXX of and strong are we lapping from China-based of XXXX from their contribution say in forward-looking given prior recovery share to the course China-based say expectations I but headwinds. periods the have demand that quarterly So quantifying on advertisers of will don't revenue, increasingly pandemic-driven China, that

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

talk investment most is cautious ago? AI the in there opportunity changed And what's months in in requiring X therefore, market? than about just bigger, in more And Can the business is expected? now anything about and the the just your ad opportunity even view versus you're more and revenue you

few ad And big comment then, over a of base as ability next rates growth Susan, can that off you sustain the dollars? to you also quarters how thinking tougher about on just you're face comps

the Yes, I can to first speak one.

I think we've ambitious optimistic gotten on AI. more and

model very I and previously, our valuable when mean -- were was were this integrated be going released we that able be a last X, thought to to when excited the the So build you at looking that number think about that to social things into I were basis that products. our Llama of that, year, we work in

think But now pretty place. in a I we're different

going that ones and leading opportunities social obvious latest leading just be commerce think So up where we're can place a the we've the the of shown company some new in are and opens that in products. are I the to not be for ones good we building building And lot models, that most of us. that a capable just models AI AI with actually world. additional good beyond models we're build

what do refer to view together with this So AI the the we that we've and way have success scale the the that opening ability -- have just and where I Meta come data validation to my as infrastructure leading was Lama remarks I that here. talent, X real to seen work in trying that's is the technically a to

AI And Meta with are AI which I is Meta assistant AI, we I be and most in best be our the think world, to think used on that to going enormously valuable. path the having

to at to leading we're me investing that make edge So basically of stay all sure of encourages the that this.

that before making when doing scaling money. product at we're the it also time we're the is And

at some look to those making which that cycles the gone But the I before. through that's we've was if of before, think is you what So fundamentally, of is I team able analogy our an facts and produce, is have just up being optimism and our I this to ambition of quite us. just just grown that end quite bit, for -- I it think products a think going important set

going already was it So to be.

think to be the important. potential it even I has Now more

that Doug. second And I question, take can

our things predict conditions revenue including be further aren't out by many guidance. macro full harder And XXXX the year we factors, year for are that will the giving go. obviously, influenced full and you So to

course, made make the strong our of across also the to increasing see lapping our gains to we course ongoing to our that by will effective said, will more drive be driven XXXX, growing continue sort expect video of value we opportunities advertisers. investments continue good over ads we we performance demand. expect content ads also and of And AI-based of products, continue With recommendations, And deliver engagement periods that and in to work. increasingly we

One faster I'd actually we conversions grew a is the impressions this thing for that course than over we at share, rate quarter. grew of example,

performant. we the in -- grade suggests are expecting one is our becoming -- ways are which our conversion is to we're growing ads of and which more basically So that

continue So more and us, ads for organic I to and driving the a better continuing lot there's growth with for to -- engagement feel opportunity with of both advertisers. our and with results like make

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

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Securities. from Your next Squali question comes from the line Truist of Youssef

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from of Fargo. the comes question from next Gawrelski Your Ken line Wells

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

and Google search citations. AI Great. Bing Mark, with partnered Meta for you organic

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on question creators. you and that businesses mentioned second you then for is, the guys tools AI are And working building

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one question. time Krista, last we for have

And the that question from Citi. from line comes of Ron Josey

up question AI. of just Mark, that in I innovations Meta you're the that quite investments and want grown all a seeing making. to bit a prior few follow internally and optimism you days improvements on we're a has for And experience the mentioned with

those months, on as along cetera, vision to So call might becomes the So $XXX greater Meta or how maybe think model lines? on talk it, you focus can et the longer maybe term? messaging billion a experience next, over us evolve change just things you things just how parameter years a might just the

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

today's your concludes for conference Thank now This may you participation, call. you and disconnect.