Comment by chollida1 | Hacker News Reader

Comment by chollida1 | Hacker News Reader

Numbers:

- Q4 add revenue of $31B Est of $30B

- $40B share bye back, far better than spending on the meta verse and an admission growth is over

- note to above, check out their existing cash on hand

- VR lost $4.2B, come on guys on revenue of $700M, again, come on guys get someone who knows what they are doing running this area

- 86,500 employees, I'm guessing alot of these are in recruitment, content moderation, etc

- laid off/fired 13% of workforce so far this running year

- daily users of more than 2B, wow, growth of 5% yoy, that is good

- shares up 15% probably alot to do with the Fed and tax loss selling holding period being over, so people putting this trade back on

- Total restructuring charges recorded under our FoA segment were $3.76 billion and RL segment were $440 million during the fourth quarter of 202 (FOA is family of applications and RL is reality lab). not sure what those charges are for, look into this.

- on adds, from Bloomberg reporting "Ad impressions increased by 18% while average price per ad decreased by 16% for 2022."

- So the add number they can game went up and the one affected by market force went down.

Thoughts:

- attempting to come back form Q2 and Q3 yoy decrease in revenue

- watch ad revenue, snap was down on large ad revenue declines. FB should be the same given they are in the same ad markets

- how often is tiktok mentioned by FB, or will they continue to pretend they have no competitors?

- Fed announced a small rate hike that the market loved so FB could rip if they perform even moderately well

- as always check out what shares of SNAP, Pinterest and GOOG do on Meta results, especially if add revenue is up, well maybe not SNAP as the market has given up on that company, GOOG and PINS are up, heck so is SNAP

- one other thing to watch closely is what Susan Li, the CFO says in the call, like what google did with Ruth Porat, they hired a numbers person to be the "adult" in the room to cut costs where possible.

Will the CFO talk about cutting costs or growign the company.

* note* I guess a huge $40B buy back indicates that FB's growth is over and Mark is capitulating to wall street here by handign back cash, rather than burning it on VR

> - 86,500 employees, I'm guessing alot of these are in recruitment, content moderation, etc

Headcount was 86,482 as of December 31, 2022, an increase of 20% year-over-year. Our reported headcount includes a substantial majority of the approximately 11,000 employees impacted by the layoff we announced in November 2022, who will no longer be reflected in our headcount by the end of the first quarter of 2023.

Wow so with the 10 billion total loss on VR last earnings, are they now up to 14 billion spent on VR and metaverse? That's unbelievable for how little there is to show of it.

> That's unbelievable for how little there is to show of it

They multiplied the size of the market by an order of magnitude and they dominate the entire VR industry now?

Is it really a market when you created it by burning $6 for every dollar you make?

Unless you have a way to separate out what is attributable to forward investment vs current operating expense / revenue I don't think you can tell. Zuckerberg himself has painted a 10 year timeline on the investments they are making now.

To take it to a silly extreme, Apple has probably burned $14bn and hasn't released anything yet. So they have burned $infinity for every dollar they made. Does it make it a failure?

This is a good point, but I don’t think it’s as strong an indicator as, say, Uber selling rides below cost. I have a Quest headset which I now play a single game on, and I don’t generally game. I’ve shown an interest in the overall market.

It’s not as though it’s an obvious deal for me to use, like ride sharing or food deliver.

I would love to know where this money is going. $700M isn't bad revenue at all, that's probably more than all VR competitors combined and certainly enough to run the division off of. They canceled all the really promising/expensive R&D efforts like their own SoC and their own OS, so they're once more dependent on Android (eh) and Qualcomm (nooo). They haven't launched any major software and the hardware has stayed the same except for the massively underwhelming Quest Pro, which they're having to sell for $400 off right now.

Either the Quest 3 reveal is going to be stunning or bureaucratic bloat has grown to the point it's sinking the division.

When you say they haven't launched any major software do you just mean they haven't launched a killer app? The platform has had lots of incremental updates and continues to.

They haven't launched much of anything - incremental updates are well and good, but the Quest Pro software page is unchanged from when it launched. The top selling software page is the same stuff it's been for years, largely the same as the Steam VR page since the launch of the Vive. Their biggest software release in 2022 was "Among Us VR." Richie's Plank Experience, an app from 2017 where you walk on a board, is still in the top sellers. To me these are not signs of a healthy ecosystem.

VR experiences continue to have accessibility issues that make them seem more like the next 3D TVs than the next iPhone. But who knows.

What do you mean by accessibility? Content aside, I'd say the number 1 problem is friction. The headsets are still too heavy, too buggy, too isolating, too ugly for mass adoption, even though all those things have improved a lot since the beginning. The potential is so high I can't see them entirely vanishing like 3d TVs-I maintain that AR glasses the size and shape of Ray-Bans would be a 100 billion dollar industry. But it might take another VR winter to get there.

A nontrivial amount of people get violently ill when using VR. That's a heck of a lot of friction to overcome.

I don't think it's enough to matter. At least, I've demoed to a lot of people and never encountered one. I've seen artificial motion cause often, but never just using VR.

>When you say they haven't launched any major software do you just mean they haven't launched a killer app? The platform has had lots of incremental updates and continues to.

They renamed the entire company from Facebook to Meta least year, and then nothing really happened. No big software or hardware release. If anything it seems the rate of change as slowed down in that year. The Quest Pro finally came out a full year later. And the Pro feels like a VR devkit to experiment with face tracking and color passthrough - a product to play around with and hope a developer hits on a killer app - not to rebrand your company around.

Even just in gaming there's not much. Resident Evil 4 is still probably the only thing close to an AAA release and it's a port of a GameCube game. (Porting games of that era is a great idea though, hope they do a lot more it.)

Ironically I'm very close to buying a Pro as a PC VR only headset. A feature Meta barely even mentions. The other features don't matter to me but the Pro lens clarity is unbeatable. It feels so good to never have to strain to keep your eyes in the perfect spot where the entire lens is clear edge to edge.

> - laid off/fired 13% of workforce so far this running year

I wish it was acceptable/normal for companies to reveal how much more of their workforce (if any) they plan to layoff in the coming quarters

It's almost as if there's a need for headcount projections.

> daily users of more than 2B, wow, growth of 5% yoy, that is good

eh, i always feel like this is dishonest for them. if a daily user is on whatsapp and they never see an ad, isn't that user just an expense for them? instagram users scrolling ads: revenue. facebook user scrolling ads: revenue. me talking to my family on whatsapp? unless they're benefiting from scanning the chat and delivering me ads on it (is this what they do? is it legal?) isn't it kind of like... they're paying the bandwidth/storage costs and getting very little out of it?

> on adds, from Bloomberg reporting "Ad impressions increased by 18% while average price per ad decreased by 16% for 2022."

is this left over from "apple's privacy changes made our ad targeting less effective so we need to display more, lower quality ads that are worth less to get as many conversions as we used to previouly"?

2B is the daily active users for Facebook specifically.

For the entire family of apps it’s 2.96 billion DAU (i.e. people who used one or several of FB/Insta/WhatsApp during the day).

would you agree with the statement that a WhatsApp user is most likely the least profitable compared to FB/Insta or do you think that statement is missing some kind of information?

I believe they’ve talked about this on earnings before, as an area with very significant potential for increasing monetization.

The whole lure with Whatsapp was that it was cheaper than sms. And now sms cost nothing extra.

You were talking about WhatsApp in context of the 2 billion number which doesn’t include WhatsApp users.

Is that including WhatsApp Business accounts (revenue positive) and the so-far limited roll out of WhatsApp payments in Brazil and India (revenue positive)?

In their last earnings transcript (3 months ago) they do talk a lot about Reels competing with TikTok and making a lot of traction.

They say that Reels growth is very high, but they haven’t built the tools yet for SMBs to advertise well with it, so revenue was relatively low but a focus for them going forward.

Haven’t read yesterday’s transcript yet but I’d assume more of the same.

Re: Susan Li

Unlike Google, they did not hire the former EVP & CFO of Morgan Stanley, and next in line for Head of Treasury before she withdrew (making too much money at ms to move).

I think Susan seems great from afar (i am but a lowly swe), but it's hard to see them similar in any way. Susan Li joined FB in 2008 after her first job as an analyst for ~3 years at, you guessed it, Morgan Stanley.

They’re budgeting $30 billion on capex next year so I don’t think your stock buyback comments are accurate.

What about my comment do you think is inaccurate?

I verified the number it’s correct and they bought back $21B last year and has now been buying back stock since 2017.

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