Meta Reports Third Quarter 2023 Results
investor.fb.com
investor.fb.com
Net income is up a whopping 143%, from $4.4B to $11.6B - basically went from a 15% to 34% profit margin (and in line with profit margin numbers from 2021 and prior)
No wonder stock is up 4% after earnings.
Its almost as if that full emotion took over the markets over and switched on to complete fear mode and was a complete nothing to see here in the end showing that the so-called death of Meta Platforms Inc was over exaggerated by the media.
Another earnings beat and it is business as usual, just like before. [0]
Zuck finally got over his bad VR trip. He was spending current FCF on his bad adventure and it was only a matter of time before someone got him to pull back. They can still do a lot in the space without dropping billions/quarter.
Isn't the word "spending" in this case?
Whether the trip was bad or not is up to debate, but what makes you think Zuckerberg is quitting on AR/VR? His recent interviews suggest anything but that.
At what point do you decide that the market just isn't there for the product - or, at least, the market will forever be restricted to fairly serious gamers and sundry small other specialized business applications (eg architectural visualizations)?
I mean, I remember when Wolf3D was first released. Some aspects of it - the low-resolution bitmapped NPCs, for instance - were clearly stopgaps. But the over experience was so amazing you were prepared to ignore that.
With virtual reality, the argument seems to be “if we just polish it a bit more it’ll be a compelling consumer product”. How many more years of polishing is it going to take?
In a lot of VR games you move your character around while you do not and that is what causes a lot of nausea. If games have to be like beat saber for VR/AR to be successful that’s damning.
I still struggle to see a future where VR/AR headsets don’t have 50m users by the end of the decade. I wouldn’t be shocked to see the Quest3 be a sleeper success once the wave of interest generated by Quest2 materializes in the form of new software.
The whole endeavor also comes with a great failure mode: Zuck also gets to own lots of the spatial computing, rendering, and multimedia future. We're getting glimpses of what games and films will look like in a decade or two, and it's nothing like what we're used to experiencing today.
Not to mention the industrial applications of spatial computing.
I think he's a genius for investing in this, even if AR/VR/XR fall completely flat.
So much of computing is still about being chained to a chair and table, using an ill designed keyboard layout, with a pointing device that only really kinda works in 2D. This has had imense repercussions on how we use computers today, it has alienated outsiders for years.
We're at a point where people prefer to search for things rather than using the UI. At some point, certainly, we gotta start questioning how ** stale we are with user interfaces.
I'm sorry for the rant, long day!
Second most is Carnival Cruise Lines.
Not all bets that look crazy pay off. Sometimes they’re just bad.
Future tech like adding legs to ugly avatars?
Bring too early is a problem for sure but you can't time everything.
I know plenty of people who were staunchly against video calls as an alternative to meetings.
The smart money waits by the river until the necessary enabling technology comes floating by, just as Jobs did.
EDIT: I work for Meta as an IC6.
Always best to assume that even if you post attempting to be anonymous and not filling out 'About Me' that one of your 100's of comments on an internet forum may identify you accidentally or intentionally, and that all your comment history may then trace to you.
To make it worse, $META is a public company. Confidential info is even more sensitive for a public company.
Whether you like Meta or not plays no part.
[1] https://www.theverge.com/2023/9/13/23871859/us-army-microsof...
Ideas like the metaverse tap into a lot of established sci-fi, pop-culture concepts which are generally very cool. I genuinely think that people really do want VR worlds to succeed - they do want their own virtual homes, customisable avatars, places to meet and game online in the metaverse, etc.
But instead they got some awkward, low-poly bobbleheads with a side helping of unnecessary crypto crap...
Quest3 is GOOD though and I feel people are sleeping on it. It feels like a properly mature product. It’s the rest of the market that looks a little questionable to me.
Not to sound too much like a VC Bro but I also feel the more VR/AR goggles they can push the more appealing the platform will become for developers and as a social platform. They’re just not shipping quite enough units. It doesn’t feel like meta is doing anything wrong, it’s just going to take time to build up enough users to attract developers and more users to attract more users and developers.
Cost of revenue 6,210 Research and development 9,241 Marketing and sales 2,877 General and administrative. 2,070
$9B in Research and Development. About $3B of that still belongs to Reality Lab.
So even without VR, Facebook still seems to spend relatively a lot of money for their revenue generation. I am surprised by this as I thought their net margin would be quite a bit higher.
As for $9B in research and development - they have 66K employees now. Say 30,000 of them are in engineering, costing the company $300K on average (salary + bonus + benefits + other expenses), that's $9B right there in research.
> Headcount was 66,185 as of September 30, 2023, a decrease of 24% year-over-year.
How to increase profit 101.
This was short lived.
How the hell do they keep pumping their impression numbers like this? Seriously I have stark memories of seeing these 20%+ numbers on last years earnings and thinking it was a big problem since there's no way it's sustainable at their size but here we go again.
Whether this strategy is a level of abusive that leads to atrophy or is sustainable is yet to be determined.
"ad density".
that's how
Maybe that's where the money is coming from?
Which Facebook owns as well, not they actually monetize it though.
Your (and your friends) experience may not be representative of everyone.
All 3 of them would have been ok with a place/team that some people might describe as "tech bro" though--we are talking much worse than whatever you mean by that lol
Technical teams: There are some pressure-cooker teams where there are micromangers obsessed with counting diff revisions and maximum project impact, a smattering of individuals who are overconfident big fish in small ponds. Most technical teams are normal and helpful. Some are even loosey-goosey and casual. There are a few teams who have no customer service skills or professionalism at all, but those aren't many.
Nontechnical teams: I've observed multiple IRL collections of people who literally go to work to socialize... and do so loudly and not in a conference room. Maybe they do work, but I didn't see any sign of it. Slacking-tolerant areas must have a reporting structure that doesn't have a lot of hard accountability, may not have to produce quantitive impact, and are able to hide in a megacorp when there is sufficient complexity and opacity.
One other thing that ticked me off about IRL Metamates: most volunteers for a home building nonprofit left without coordinating with the site manager, leaving them understaffed for the work and cleanup tasks. It really shows the personal ethics of people who pose for photos for their personal brand but then don't care enough to actually do the work.
Why does HN always do this, comment up from their moral high horse? Someone works in big tech then they must be a sell out doing it for the money. Also, if big tech is off limits then by that logic I assume so are big banks, big pharma, big oil etc etc. Almost feels like only start ups qualify as employment opportunities then perhaps, but even they most likely are using frameworks/tech by big tech (is that ok or is that selling out too). Where does one work then? Is it that hard to fathom that people have different moral codes and care about different stuff. Such comments almost feel like sour-grapes.
Always good to remember that we are on HN; a lot of entrepreneurs are somewhat frustrated that they have to compete with Big "wtv" for talent.
Big tech is a blessing in a market that would further take advantage of tech talent if they could.
i think a lot of us were introduced to tech as an extremely liberating thing. the dreams were obvious if you spent time building things as a kid: complete creative direction over your built environment, digital _and_ physical.
and then you reach working age and realize that very, very few people _employed_ in tech share those dreams. the people working to actually make tech liberating are largely the people _not_ being paid to do it (maybe a carveout for grant work there), and a large part of paid tech work is explicitly counter to those liberating ideas: taking a general purpose technology and restricting what the user can do with it (Apple), surveilling the user everywhere (Google, Facebook).
> Where does one work then? Is it that hard to fathom that people have different moral codes and care about different stuff.
not hard to fathom. at the same time, if i told you "my moral code leads me to discredit the idea that anyone can have a private property right to unused shelter" and lived out of your garage while you're out of town, would you really not take issue with that? is "we have different moral codes" really a get-out-of-jail free card? i see the future you're manifesting (via the work your comment suggests that you do) as one which makes my own future more difficult to realize. that puts us in conflict. my future would apparently be better without you in it, but maybe you're offsetting things elsewhere, and i'm not _that_ self-centered anyway. so what would you have me do? i think the most reasonable thing to do is to let it be known to you that this is the case.
Your example of "my moral code leads me to discredit the idea that anyone can have a private property right to unused shelter" is not a moral code, its trespassing and illegal. However, you could always do as you please with your own property and personally, I won't judge you and imply that I am better than you for disagreeing with me.
matt_s: devs working for Meta must be sacrificing their values in exchange for money. eilnvlrn: why do HNers always speak from a moral high horse, rather than accept that others operate with other moral codes? colinsane: our different moral codes here do put us in conflict: vocalizing our values is the least destructive way for us to come to terms. eilnvlrn: so long as i act within the law then you're wrong to consider us in conflict.
> don't worry I wont judge you for it.
i don't care if you judge me. if i speak from a "moral high-horse" i don't do it to rub it in your face, or to self-aggrandize, or anything like that. i would do it to make known that your actions are an impediment to the aims i have for my own life -- and hope that you might be compassionate enough to consider such things.
literally just erase every occurrence of "moral" from this thread if it makes it easier to see through to the content. i'm trying to build my own future: it's made difficult by every variant of anti-competitive "moat building", "vendor lockin", "embrace extend extinguish", dragnet surveillance, and so on which is core to the business model of the company (companies) in question.
_forget about morals_: i call that thing out because when you work for this kind of company you are an aggressor to me. if i camped out on the sidewalk in front of your house and watched every action you made, you would find it hard to live a peaceful life. you would call me a stalker and see me as an adversary. yet when i instead design and sell Ring cameras to all your neighbors to achieve that exact same end without a physical human on your sidewalk, suddenly you wouldn't see me as an adversary? that's nonsense. for real though, because some are quick to dismiss it: do you understand how nonsense that type of thinking is?
and yes, i get the nuance about distance. that going way upstream and working for TSMC doesn't erase the link between your work and the harmful end result. but that doesn't mean proximity is irrelevant. a lateral move from Amazon's Ring team to a GoPro team would surely put us in less conflict. an upstream move to some vendor which supplies both Amazon and GoPro puts you closer to the midpoint. just about _any_ move away from the companies in question puts us in less conflict, hence why the heat is focused more specifically on them.
There are industries out there other than ad-tech that have a better mission.
They do a lot of it. And honestly? They seem quite more open about it.
* Groups are about 1000x better in quality and organic posts than Reddit
- Number of Facebook users in the world (monthly active users): 2.989 billion (April 2023)
- Number of people who use Facebook each day (DAU): 2.037 billion (April 2023)
- Size of Facebook's global advertising audience: 2.249 billion* (April 2023)
- These latest figures indicate that roughly 37.2% of all the people on Earth use Facebook today
Even if Facebook is losing active users, it has 2 BILLION users.
> Number of people who use Facebook each day (DAU): 2.037 billion (April 2023)
If you estimate ~8bn people in the world, then a quarter of every human on earth use Facebook _daily_.
Yet if you just followed HN threads, you would believe that it's a ghost town and that everyone needs to follow whatever teens are doing.
Looking at the Philippines, it says they have 91.9 million active users. That's for a population of 113.9 million people (estimate, their latest 2020 census only had 109 million). That means 80% of the TOTAL population of the Philippines is active on Facebook?
Then when you look at the population pyramid you have 30% of that 113 million under 14 years old (around 34 million).
Something does not add up here... But then again, I don't know too many Filipino people, so who am I to say that every person in the Philippines capable of holding a phone is not actually an active Facebook user?
That country literally runs on Facebook. Also, they just elected a dictator's son, which may be related.
Mobile ad CPMS and CPS are insanely high. companies shelling out big bucks for traffic on Meta, Instagram.
Guess there’s your answer — advertisers is the group that actually pays Meta its money.
I think people are just so addicted to it, but in secret, if you're not an addict, it's confusing.
Huge for a single year.
I should have held the stock, but it seems after the initial panic, it was like trying to catch a falling knife.
oct 25, 2023 - $307.77
would need to be $424.91 "to keep up with inflation"
https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=378.69&year1=2...
I think the most important wisdom in all of quantitative finance is that the expected future value of a stock it it's current value plus the value from the "risk-free" rate.
It happened that Meta did (for now) come back from it's exaggerated death, but just look at Google which took a major hit today.
Point is, hindsight is always 20/20.
Specifically the pass through.
Zuck monetizes the social network and makes billions. Critics: he's managing the business quarter-to-quarter with no vision for the future. Pretty soon it'll be milked dry!
Zuck invests billions in potential future hit technology. Critics: he's lost his mind and should focus on the day-to-day!
Maybe by this time next year it will have lost a bunch of money…
https://about.fb.com/news/2023/09/new-ray-ban-meta-smart-gla...
So is the Metaverse fever dream truly dead?
The question of "metaverse" is: 1. Do we need a head strapped device? Does it add enough to the experience to justify it? 2. Do we need those experiences be more connected and owned by one rent collecting platform?
My answer to both is a firm no, both make it strictly worse. But it's a personal answer, we'll see. ¯\_(ツ)_/¯
(Meta obviously wants it to be double "yes" to sell those head strapped devices and collect this rent. But this doesn't make it true)
Now, I don't know if metaverse is equal to a head strapped device but I think one part of this umbrella term is some compatibility between games or worlds like a character that could be useful in different games by different vendors with some features embedded.
Regarding VR, I tried the technologies, liked them for "a few minutes", feel the dizziness but mainly the issue I found is a lack of apps. The hardware there is incredible and will be more in the future. But, again, my point is the future, and in the future probably you will just connect it to your brain. Don't know when.
The latter hasn't panned out, but we're seeing the former happen more and more: it's just not as centralized as fantasy versions were.
Fortnite is probably the most successful metaverse at this point, but you see things like Call of Duty placing limited release EVs from GM and famous anime characters being sold as DLC.
Now Prime Video has characters showing up Mortal Kombat as paid extra content, and you're sure to see more and more of these crossovers as brands start to accept the legitimacy of fully immersing their brands in virtual worlds instead of settling for the typical "in-game billboard reference".
He still owns almost all of the Class B shares, and so has ~61% of the voting power[2].
[1] https://www.vox.com/technology/2018/11/19/18099011/mark-zuck... [2] https://materials.proxyvote.com/Approved/30303M/20230406/NPS...
"Outsize control given to corporate executives isn’t unique to Facebook. As Pisani at CNBC pointed out, Rupert Murdoch and his family have all the voting power at News Corp. At Google, there are three classes of stock, but the B shares controlled by Larry Page, Sergey Brin, and Eric Schmidt account for some 60 percent of voting shares.
Borrus, from CII, told me that about 10 percent of publicly listed companies have a multi-class share setup, but the proportion is growing among newly public companies, especially in tech. Last year, 19 percent of companies that went public on US exchanges had at least two classes of stock with differential voting rights. In 2005, it was just 1 percent, Borrus said. (Snapchat parent Snap was a highly publicized case because the shares it made public didn’t have any voting rights at all.)"
Then the shares had been priced so high that ordinary purchasers got a better price a couple months after the IPO, than high-powered financial types got in the IPO itself. Financial types hate it when they do not get a better price than the ordinary investor. I'm not particularly a fan of FB or MZ, but I do have to admit to admiring his behavior during that whole episode.