Meta achieves $12.369bn BNA, ad revenue rises, but guidance looks sluggish

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Bankinter: 1Q2024 results good, but guidance weak. The stock falls 15% in the aftermarket. Key figures vs. consensus (Bloomberg): Revenues $36.455M (up 27% year-on-year) vs. $36.125M consensus estimate and $34.500M/$37.000M by the Company, EBIT $13.818M (up 91%) vs. $13.400M and EBITDA $12.369M (up 117%) vs. $12.070M estimate. Daily active users reached 3,240M (up 7% year-on-year) vs. 3,190M in the previous quarter and 2,114M estimated. Average revenue per ad up 6% vs. up 2.0% in the previous quarter and up 5.9% estimated. Number of ads up 20% vs. up 21.0% last quarter and up 17.1% estimated.

Assessment: The figures for the quarter are positive and beat consensus estimates. Economic growth is holding up better than estimated and favours investment in advertising. However, revenue guidance for Q2 is below estimates. Specifically, the company anticipates revenues of $36,500M/$39,000M, which is an average of $37,750M vs. $38,250M estimated. In addition, it revises its annual cost estimate upwards to $96bn/$99bn vs. $94bn/$99bn and its capex forecast to $30bn/$4bn from $35bn/$37bn.

As a result, the value falls -15% in the aftermarket. The market fears that the costs associated with artificial intelligence will end up being higher than initially estimated while its monetisation is still a long way off. In fact, Meta does not offer guidance beyond 2024, but hints that the resources it will have to devote to this development will still be high next year.

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