[HN Gopher] Meta Earning Results Q3 2022 [pdf]
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Meta Earning Results Q3 2022 [pdf]
Author : mfiguiere
Score : 121 points
Date : 2022-10-26 20:10 UTC (2 hours ago)
(HTM) web link (s21.q4cdn.com)
(TXT) w3m dump (s21.q4cdn.com)
| jmyeet wrote:
| There is a general principle that applies to markets and
| government policy: things are never as bad as they seem. Likewise
| they are never as good as they seem. Fear and greed. It's why
| markets and governments and even people tend to overreact.
|
| Rewind a few years and people were calling for antitrust actions
| against Facebook for their market dominance. Some still are. This
| never concerned me and I needed no better evidence than
| Instagram. Instagram popped up out of nowhere and was an
| _existential_ threat to Facebook with 13 employees when Facebook
| bought them for $1 billion.
|
| If in the space of a few years something can appear and threaten
| your very existence then you aren't as dominant as people were
| making out. If it happened once, it will happen again. And it
| has: a lot of particularly younger people (a key demographic) use
| Snap. And you can't ignore Tiktok, which is rapidly eating
| Facebook's attention economy.
|
| The big problem for Facebook (sorry, "Meta") is they have no plan
| for the future. Oh, sorry, there's the Metaverse. That ain't it.
| There is absolutely no evidence that VR will ever be anything
| more than a niche. There's the argument that this will eventually
| lead to AR but once AR becomes viable (if it ever does) then Meta
| will be in the same competitive boat as many others because a VR
| headstart is no headstart at all.
|
| So how long can Meta milk the advertising teat before drastic
| change is company strategy is called for? I'd say that's coming
| sooner rather than later.
| Namahanna wrote:
| Take a look at the net losses for Meta's Reality Labs for the
| full years 2019 through 2022: 2019: Net loss of
| $4.5 billion on $501 million in revenue 2020: Net loss of
| $6.62 billion on $1.14 billion in revenue 2021: Net loss
| of $10.19 billion on $2.27 billion in revenue 2022: Net
| loss of $13.21 billion on $1.72 billion in revenue
| ethbr0 wrote:
| They're obviously in it for the long game.
|
| At that rate, they'll have a $17.2 billion net loss on $2
| billion in revenue for 2023...
|
| ... and then everything will be fine.
| zffr wrote:
| I guess the hope is that revenue will eventually grow
| exponentially and outpace growing costs
| anvuong wrote:
| Can't quite wrap my mind around this kind of spending. I mean
| AMD came up with Ryzen and RDNA with much smaller R&D budget,
| and sillicon was hard af to do. What were they doing with this
| amount of money?
| stephc_int13 wrote:
| So, 34.5 Billions!?
|
| I was still on the 10B figure. At this rate they are going to
| reach 50B pretty soon.
|
| What is the limit? 100B?
|
| I understand why this is taking time, R&D and stuff, but I have
| some difficulties to understand how they manage to burn that
| much money.
| nicce wrote:
| When you have too much money, you start forgetting how to
| optimise and control its use.
| skippyboxedhero wrote:
| I wouldn't imagine they even have the capacity to do so.
|
| An ecomm company in the UK went bust today, Made.com. They
| had a decent business, they sold furniture online, but
| their main issue was cost. All obvious, they had hundreds
| of people working in single divisions, it made no sense at
| all.
|
| But they never attempted to cut cost until it was too late.
| I have seen this before, and it isn't "forgetting"...it is
| a physical capacity. You hired the 32-year old guy, he has
| only ever hired people, and you tell him he needs to fire
| 10% next week...he will start ducking you, what do you do?
| You can't fire him now, you need him to fire everyone
| else...most companies can't turn it around in time (Made
| was also run by people like the 32-year old,
| "entrepreneurs", everything will turn around soon).
| stephc_int13 wrote:
| I am pretty sure that many employees and contractors are
| getting rich in the process. Good for them, I guess.
| colinmhayes wrote:
| The only limit is Mark. And he's not showing any signs of
| slowing down, the earnings report even said they're going to
| lose even more money on reality labs next year than they did
| this year.
| labrador wrote:
| I a fan of virtual reality, just not in the hands of Corporations
| and the Chinese Communist Party, whose interests seemed very
| aligned in regards to controlling and policing people. Both have
| thought police in HR departments and bureau of Party
| Functionaries.
|
| Mark Zuckerberg has a $10 billion plan to make it impossible for
| remote workers to hide from their bosses [1]
|
| China believes mass surveillance will help it engineer the
| perfect society [2]
|
| There's no sex in the Metaverse champagne room
|
| [1] https://fortune.com/2022/10/18/mark-zuckerberg-meta-
| avatars-...
|
| (https://archive.ph/i5yJO)
|
| [2] https://www.codastory.com/authoritarian-tech/china-
| surveilla...
| endisneigh wrote:
| I'm shocked meta didn't pivot more into "lifestyle". I mean
| something like meetup, a superior marketplace for selling (no,
| not Facebook marketplace).
|
| There are a lot of cool things you could build on top of a
| verified identity.
|
| Even if VR and AR pan out I doubt apple would lose. They just
| have too much control over the entire stack.
|
| How Microsoft and Google, and Meta allowed Apple to slowly build
| over independent control of their entire ecosystem, from supply
| chain to software is baffling. They're gonna get wrecked.
| threeseed wrote:
| > Even if VR and AR pan out I doubt apple would lose
|
| Apple won't lose but equally they won't dominate.
|
| There will be a space for an open, collaborative market leader
| exactly what Meta is positioning for with their recent
| partnerships e.g. Microsoft.
|
| And if you ignore the metaverse nonsense and extrapolate
| hardware advances over the next few decades AR/VR _could_ be
| compelling. It could replace laptops. It could change what
| travel, concerts, arts events looks like. It could democratise
| education.
|
| I understand Meta is trying to generate hype and attract talent
| but I also hope that we do get far more serious at what AR/VR
| could mean.
| spaceman_2020 wrote:
| I'm also surprised that they haven't focused more on giving
| businesses tools to communicate and sell to customers better
| through WhatsApp and Instagram. Whatsapp is the de-facto
| communication tool in India and LatAm from experience.
| Instagram is the de-facto discovery and social tool in India.
|
| Yet from a business' perspective, the experience is really
| poor. Most have to rely on third party tools to sell and chat
| with customers.
| dillondoyle wrote:
| FB messenger too.
|
| They did seem to make a push for more business API and more
| marketing messaging permissions. I invested some time in
| developing it for political campaigns.
|
| Only for them to yank the more open permissions away.
| homarp wrote:
| isn't that a casualty of the US-centric/SF-centric view of
| the world?
| spacemannoslen wrote:
| I agree with all the above. Nothing to do with the username,
| either.
| dnissley wrote:
| Whatsapp partnered with JioMart to place orders through the
| app in India: https://about.fb.com/news/2022/08/shop-on-
| whatsapp-with-jiom...
|
| Progress is being made on this front, albeit slowly.
| chrisseaton wrote:
| > mean something like meetup, a superior marketplace for
| selling
|
| They've tried these things - you mentioned an example of one
| yourself.
| endisneigh wrote:
| Very poor execution, and from what I hear it's a glorified
| side project internally. Not a serious initiative.
| jefftk wrote:
| Stock is down 12% after hours. If it sticks in the morning (and
| isn't just after hours being low-information) this is dramatic,
| given that the market had already priced in lower expectations
| after similar disappointing results from other companies.
| tester756 wrote:
| Damn, so many stocks recently on discount!
|
| Semicos, Google, Facebook, MSFT
| kuwoze wrote:
| buy the dip doesn't work if you are jumping from a plane
| bingohbangoh wrote:
| Never try to catch a falling knife
| francisofascii wrote:
| Yeah, they took a beating this afternoon.
| yieldcrv wrote:
| or it wasn't priced in at all and nobody can quantify the
| "priced in" concept to begin with.
|
| the concept relies on an idea of aggregate information
| converging to an average best price in advance of the
| information being available to all. it relies on someone
| smarter than everyone else recreating all financial inputs to
| the company and having enough capital, risk profile and time
| horizons to exercise that opinion. When even that stretch of
| the imagination can be undermined by someone richer just
| wanting to get out.
| imnotreallynew wrote:
| Can someone make an argument _against_ buying at this price
| point? It was what, 378 a year ago? It's even cheaper than the
| crash in 2020.
| HarHarVeryFunny wrote:
| The stock's price in the past is irrelevant.
|
| The question you should be asking is what are the company's
| earnings growth prospects going forwards, and how does that
| compare to the stock's current valuation.
| rubiquity wrote:
| There's an old adage for your line of thought:
|
| What do you call a stock that's down 90%? A stock that was
| down 80% and cut in half again.
| fallingfrog wrote:
| Market prices are a reflection of the economy, they are not
| themselves the economy. Trying to use the reflection to
| predict the reflection is self referential- even though lots
| of people do it, which is why the market often behaves like
| it's huffing paint. I think it's better to base assessments
| on base reality.
|
| Example: the share price of K-Mart was 134 dollars in 2007.
| Now it's 15 cents. And people were buying the dip all the way
| down. Think it will come back?
|
| After all, no company lasts forever. Eventually they all go
| to zero and are replaced by some other company. That's why
| buying the dip just because it's a dip is a fool's game.
| jesuscript wrote:
| The argument is all stocks were at all time highs last year
| other than physical Covid related stocks (hotels, etc).
|
| Everything was taken back to pre Covid levels. So if you can
| imagine we are back in 2019, whatever Facebooks price was,
| plus declining user base, and the Apple fuck you, it has room
| to drop.
| noncoml wrote:
| 2000, CSCO was $69. Still hasn't reached those levels since.
| Good enough argument?
| paulpauper wrote:
| it has paid a lot of dividends though
| adam_arthur wrote:
| Well, if your judgment of fair value is driven by relative
| price alone, and not fundamentals, you can believe whatever
| you want about what's cheap or expensive.
|
| If you look at history, everything converges back to
| fundamentals in the long run; as many tech investors are
| starting to find out.
|
| But to answer more directly, the current price is only good
| value if Facebook can grow its earnings over time. Right now
| they're shrinking.
|
| Companies with shrinking earnings tend to get single digit
| multiples
| jsemrau wrote:
| [1] Due to macroeconomic condition marketing spend by
| companies is decreasing -> Lower revenue [2] New entrants in
| the social ad-tech market (Apple, Uber, Netflix, Youtube,
| etc) take a slice of a shrinking market [3] Privacy
| regulations shrink market further
|
| So while they are still insanely profitable for their core
| business the growth story is over.
| senko wrote:
| Yes.
|
| VR strategy fails, acquisitions stop due to regulatory
| issues, loses ad marketshare to Apple, TikTok continue to eat
| its lunch. As a result, stock gets even lower.
|
| There you have it. Is this a very strong argument? Probably
| not, no, but it's a possibility.
| threeseed wrote:
| > TikTok continue to eat its lunch
|
| Is it though because the data doesn't suggest that.
|
| It suggests that TikTok is dominating amongst younger
| audiences and that short form video content is a specific
| segment.
| zepppotemkin wrote:
| Just from seeing what people watch while on the train
| these days I'd say it is, I get that it's not the best
| indicator
| ethbr0 wrote:
| + Recession causes Facebook's primary ad customers to slash
| advertising spending to save money.
| colinmhayes wrote:
| Facebook's revenue could cut in half and they could
| easily make more profit than they did this quarter just
| by getting rid of reality labs. The only thing holding
| the stock back at this point is Mark and I guess the fear
| that no one will use facebook 20 years from now.
| lostdog wrote:
| For the past 7+ years Facebook has continually made its
| product worse for its users. They are making the same type of
| product decisions today, so they will continue to bleed
| users.
| [deleted]
| nemothekid wrote:
| > _Can someone make an argument against buying at this price
| point?_
|
| The only way I see them recovering is regulatory action,
| either:
|
| 1. The White House bans tiktok, (hopefully, in FB's case)
| shifting TikTok's eyeballs to Instagram.
|
| 2. The White House forces Apple to undo informed tracking
| consent.
|
| Personally, I believe Facebook was digging their own grave in
| 2010 and handled the privacy problem incredibly poorly. While
| consumers were unlikely to stop using Facebook, it left them
| wide open for Apple to kneecap them and now Zuckerberg's,
| likely correct, concerns that Apple doesn't really care about
| privacy falls completely on deaf ears.
| r00fus wrote:
| There has been a lot of discussion and bipartisan political
| will to force Bytedance to sell TikTok to a US company.
|
| Zuck needs to push his lobbying minions to make that the
| full-court press on Capitol Hill.
| mhoad wrote:
| Wasn't that just some random Trump brainfart that went
| nowhere and was officially taken off the table?
| Jerrrry wrote:
| Just like when Trump brainfart'ed and told Germany that
| Russia was going to wield its energy dependency as a
| realpolitik ploy, and was called a idiotic shill for it?
|
| And that's exactly what happened...?
|
| The president, orange or grey, is privy to information we
| are not.
|
| Tiktok is a national security threat; orange-man-bad
| isn't a staple in any useful political discourse.
| rr888 wrote:
| > argument against buying at this price point?
|
| Do you know anyone who uses Facebook any more? How many
| Instagram users you know look at the ads?
| skippyboxedhero wrote:
| Zuckerberg runs it.
|
| In no other company would a CEO be allowed to essentially go
| rogue like this. All companies with dual-class shares will
| eventually trade at a discount, this is FB's time.
|
| I don't even think the Metaverse is a bad idea, but applying
| the SV mentality of: we just need to lose more money than
| anyone else won't work, that isn't how the real world works
| unless you have someone even dumber to pay you off (i.e.
| stupider VC fund, IPO)...FB is top of the food chain, no-one
| else is coming in on this.
|
| They either need to slow the cash burn (the numbers are just
| ludicrous) or spin the company (not possible).
|
| This kind of thing happens and the discount can last
| literally decades. With dual-class share, there is no way to
| close it and most investors know this so they are just
| selling.
|
| I will say it again: dual-share class isn't smart, the market
| isn't dumb, investors aren't stupid, it will go wrong
| eventually and everyone else is paying the price for
| Zuckerberg's own desire for self-aggrandizement.
| [deleted]
| pardesi wrote:
| Agree. I am not going to invest into dual-class share
| companies anymore. Learnt hard lesson with FB
| noncoml wrote:
| I don't think past price is part of a stock's fundamentals
| kuwoze wrote:
| The smartest comment of this thread. If they would only
| listen...
| xboxnolifes wrote:
| Argument: The price is low because it's not expected to go
| back up (soon).
|
| Why do you believe it'll go back up from this price point
| instead of dropping another 50%+?
| gigel82 wrote:
| > Headcount was 87,314 as of September 30, 2022, an increase of
| 28% year-over-year
|
| Oh wow, that was misguided. Other companies have been slowing
| down hiring significantly (especially after the war started in
| February). I don't see how they'd get out of this without layoffs
| (which is generally bad for the whole industry).
| spaceman_2020 wrote:
| Revenue down 4%, costs up 19%.
|
| Yikes!
| Aqua_Geek wrote:
| Stock is getting hammered after-hours. Down 11% currently.
| colinmhayes wrote:
| Honestly I would be pretty unsurprised if Mark is fine with
| the stock getting hammered since it makes buybacks cheaper,
| he's certainly taken advantage of the discount this year.
| Tell everyone you're going to lose money for the next decade,
| wait for your stock to get hammered, buy it back for 50 cents
| on the dollar, and start making money again. Works for mark
| since he can't be fired.
| qbasic_forever wrote:
| Legs will surely fix this situation.
| faitswulff wrote:
| Legs are old news, certainly there must be other body parts
| that can generate revenue...?!
| qbasic_forever wrote:
| Meta announces tails!
| philosopher1234 wrote:
| There are... might make the board room a bit awkward
| though.
| svnt wrote:
| Free cashflow at zero, down from $9.5B in the year-ago quarter.
| They can would've-could've all they want about currency
| exchange rates but there's no escaping cashflow.
| threeseed wrote:
| Revenue increased by 2% on a constant currency basis.
|
| And yes costs are up but they are having to do hardware R&D
| that they have never done before.
| loeg wrote:
| > Revenue increased by 2% on a constant currency basis.
|
| Yeah, but flat isn't much better.
| marvel_boy wrote:
| Not a good sign, even they live on a mountain of cash the trend
| is no good.
| [deleted]
| Cwizard wrote:
| After almost 20 years of doing business isn't it about time that
| Facebook starts to position itself as a value company rather than
| a growth company?
|
| Realistically they had one big growth avenue and that was
| acquisitions but the regulatory (or rather political) environment
| doesn't allow for it.
|
| I get that it is hard to let go of that growth mindset after 20
| years of crazy growth but at some point the journey ends and you
| have to reorient the business (imo). I am not saying stop
| investing but scale it down a notch, set realistic budgets, pay a
| dividend or buyback stock. Maybe if they had shifted their
| mindset away from growth at all cost earlier they wouldn't have
| gotten such a bad rep.
|
| I feel the same about Google. I wonder how much money their non-
| ad, non-cloud stuff made of its life time and if it has been
| profitable.
|
| In the end the goal of a company (whether you agree with it our
| not) is not to get as big as possible but to generate as much
| cash for its shareholders as possible. And I think Facebook over
| extended with going all in on Meta.
|
| But perhaps I am looking at this with too much hindsight.
| khuey wrote:
| > In the end the goal of a company (whether you agree with it
| our not) is not to get as big as possible but to generate as
| much cash for its shareholders as possible.
|
| Facebook's goal is to do whatever Zuckerberg wants, since he
| still controls a majority of the votes. It's a fascinating test
| of the value of corporate governance rights.
| yieldcrv wrote:
| Exchanges have listing standards related to share composition
| and size of float
|
| They can extend that to these voting class shares imbalances
| and start a cascade of changes
| modeless wrote:
| S&P 500 already prohibited multiple share classes. Meta and
| Google are grandfathered in.
| subsubzero wrote:
| Also would like to add that once you go this route(being a
| value company) rightly or wrongly you just died a little(many
| perceive this) and recruiting and talent retention becomes
| alot harder as who wants to work for the tech equivalent of a
| proctor and gamble or coca cola. Apple did do the dividend a
| few years back, so maybe a slow pivot could work. But a
| growth company can only grow so far as all the people who
| want to use FB's services have used them so its a natural
| progression for any company like FB.
| mathattack wrote:
| It is, though the currency he lays his employees with is
| equity. That's the challenge that Big Tech has to confront.
| If the stock value falls too much, Zuck won't be able to
| convince engineers to join him for the ride.
| sangnoir wrote:
| The way RSUs are calculated (dollar amount to shares at
| time of hiring) he'll be able to convince new joiners just
| fine. Holding onto current employees would be the challenge
| - assuming he wants to hold onto them in the first place.
| bagels wrote:
| Only if they think the stock won't continue the decline.
| urthor wrote:
| ^^^ have to emphasize.
|
| 60-80% of the cost base in many F500s is bullshit (exceptions
| exist. FMCG, any industry where physical products make up
| their balance sheet. Not salaries). Any excuse to avoid
| returning money to shareholders.
|
| Everyone quietly acknowledges. If say, Visa, really tried,
| they could cut the cost base by 50% and achieve the same
| output.
|
| Carl Icahn style shareholder activists have a point.
|
| Forget tech companies. Most public companies are a conspiracy
| by VPs/C-suite/board.
|
| The difference with tech companies is Google feather-beds its
| EMPLOYEES with free food.
|
| From a pure capitalist standpoint. You could run Facebook's
| business on 20 billion USD in costs. Their cost base is
| enormous because Z has ZERO interest in cutting costs.
|
| He's in it for the ego/vanity. Same as every other F500
| CEO/Chairman.
|
| Ego is the driver, not the balance sheet.
| mi_lk wrote:
| there's one quote in Ben Thompson's recent Meta article
| that I really buy. If you look from this angle many Meta's
| moves make sense
|
| > What is clear is that Zuckerberg in particular seems more
| committed to VR than ever. It may be the case that he is
| seen as the founding father of the Metaverse, even as Meta
| is a potential casualty.
|
| https://stratechery.com/2022/meta-meets-microsoft/
| r00fus wrote:
| So Zuck is bought into metaverse, but can they
| transition?
|
| My guess is this is going to be a really rough winter /
| several quarters for Facebook until they reconsider.
| munk-a wrote:
| They're throwing loads of technical resources at that -
| so they should be able to build it - but the problem is
| the "and they will come part". VR Gaming is awesome,
| BeatSaber is a wonderful game to engage in... for about
| an hour or so max - you'll want to shift gears and get
| your head out of the headset just to relax your eyes.
|
| Zuckerberg seems to envision matrix-style VR where it's
| 24/7 immersive and nobody outside a very small fringe
| group is at all interested in that proposition. I just
| fail to see the value proposition of VR socialization
| over video and even voice calls. If you'll recall even
| video calls have only really caught on since the pandemic
| - skype did business pre-pandemic, but it was still a
| fringe tool for social purposes and much more likely to
| see use in a work setting. It might be that VR can break
| into the workplace - but I have my skepticism.
| skippyboxedhero wrote:
| The only reason FMCG is an exception was after 3G. The
| sector used to be a totally bloated mess, then 3G acquired
| Heinz, fired whole teams of people, and it made no
| difference to results at all (obv, it all went a bit wrong
| after but I don't think anyone believes that was due to
| cost). After that, almost every FMCG started looking at
| costs (ofc, it also helped that revenue stopped growing).
|
| Carl Icahn story about cutting costs:
| https://www.youtube.com/watch?v=WSatPoD2W-o - fired a
| building full of people, never heard about it again.
|
| Most companies are run as bureaucracies, dual share classes
| haven't helped. There is no difference between your average
| Google employee and a civil servant.
|
| Unfortunately, this is a pretty raw deal for shareholders.
| You cash out insiders, the bureaucrats move in, the amount
| of cost extends to the revenue base, eventually revenue
| slows down (bureaucrats don't tend to be good stewards of
| capital), the rats all leave the ship, you find out the
| cost base could have been 50% smaller all along, and you
| are left with a stock on its way to bankruptcy.
| [deleted]
| klintcho wrote:
| I don't necessarily disagree with this. However wouldn't
| this imply a couple of world changing things:
|
| - We should go for something akin to universal basic
| income? Given we could produce a bunch of output with very
| few people (I guess at that point it's more and ideological
| question of if these few people that get to stay +
| shareholders are going to get all that value rather than
| someone else) - People that are talking about "productivity
| growth" has declined the past 20 - 40 years, are probably
| wrong and we have seen productivity growth, we've just
| filled it up with useless stuff and made up jobs? - It also
| sort of implies that some of the projects that Google and
| Meta has taken on even though not financially sound right
| now haven't produced any value for humanity (and I fully
| understand that in a capitalist society; profits are the
| way we value things). I think they have and a lot do (like
| long tail stuff like producing knowledge, producing open
| source tech, driving tech that while not mature now, will
| explode in the future, VR + self driving comes to mind)
|
| Another thing that comes to mind when it comes to founder
| driven companies doing whatever they want is all the Elon
| Musk companies. He has also made a bunch of crazy bets that
| "value"-companies would def not have made.
| givemeethekeys wrote:
| > The difference with tech companies is Google feather-beds
| its EMPLOYEES with free food.
|
| as part of an already very good compensation package.
| altdataseller wrote:
| They did buy back stock in the past few years
| brentm wrote:
| That isn't really something a publicly traded company can do
| without putting even more pressure on it's share price. Mark's
| also still very young, if he wanted to ride off into the sunset
| he could have done that a long time ago. I give him a lot of
| credit for staying in the drivers seat given the political
| pressure they've been under since 2016 and now this period. It
| would have been a lot easier for him to just checkout and hang
| out on a mega yacht all day.
| mccorrinall wrote:
| Mark doesn't give a shit about share price, otherwise there
| would be buybacks right now. Meta still has a donkey which
| shits gold: even facebook still had 4% DAU growth yoy, while
| people make fun about fb using users to tiktok.
|
| No, Mark wants a war chest and will increase investments for
| his meta verse.
|
| But I would never bet against Mark.
| colinmhayes wrote:
| meta has bought back 5% of its shares this year. Not sure
| where you got the idea that buybacks aren't happening. They
| even took long term debt for what I understand to be the
| first time in order to facilitate more buybacks.
| __MatrixMan__ wrote:
| The only people I've met who care at all about the
| metaverse are terrified of it (giving an advertiser live
| access to metrics like pupil dilation is creepy), or
| appreciate the opportunities that it creates to make fun of
| Zuckerberg. Are there people out there who intend to use
| it?
|
| I remember when Facebook was invite-only. It was cool.
| Everybody wanted in. This... I think this is grounds to bet
| against Mark.
| reducesuffering wrote:
| > Mark doesn't give a shit about share price, otherwise
| there would be buybacks right now.
|
| You didn't read TFA, the earnings report explicitly saying
| the significant amount of buybacks they did.
| anonu wrote:
| I don't think there's a time limit on growth. Growth is also
| market perception based on what P/E multiple the market pays
| for your share. Value stocks are usually utilities, both
| actually and figuratively. We all know that Facebook is not a
| utility nor a necessity. They need growth.
| impulser_ wrote:
| You can see how much Google spends and makes on everything
| outside ads and cloud. They report it as "Other bets" on their
| financial reports.
|
| Last Q they made 209m in revenue on other bets, and lost 1.6b
| on those bets.
|
| The only profitable business for Google is Ads.
|
| Cloud, and other bets burn about 3b dollars every Q.
| kypro wrote:
| The distinction between "value" and "growth" isn't clear. You
| can be both a growing company and trading at a value-like
| multiple.
|
| META more than other big tech companies has been scaling back
| significantly this year and were one of the first to do so.
|
| They're also buying back a ton of stock and with operating
| margins in excess of 80% it's almost insane how conservative
| they've been with spending money over the years. This is hardly
| a "growth at all costs" company. This is one of the most
| profitable companies ever.
|
| META also isn't going "all in" on the Metaverse. They're
| investing a portion of their cashflows on AR/VR technology. The
| media is so focused on the headset that I think people are
| missing the fact that in a lot of ways META is inventing the
| wheel that will support the AR/VR products of the future. Even
| if they don't make a success of their Metaverse, their
| technology will still have real value to the ever increasing
| number of companies operating in this space.
|
| TL;DR: META is trading as a value stock, they are cutting back,
| they are returning a ton of profits to shareholders, and
| they're not going all in on growth or the Metaverse.
| adam_arthur wrote:
| Their expenses are up significantly, there is no cutting back
| up to this point. A few FAANGs gave lip service to being more
| frugal, but their earnings releases and operating costs show
| they were anything but.
|
| Part of the reason Meta is crashing is because they are being
| even more aggressive/spending more on metaverse next year
| than they previously stated.
|
| 19% growth in costs while having -4% revenue over the year
| ago quarter.
|
| https://investor.fb.com/investor-news/press-release-
| details/...
| missedthecue wrote:
| META share buybacks last four quarters
|
| June 30, 2022: $5.233B
|
| March 31, 2022: $9.506B
|
| December 31, 2021: $20.06B
|
| September 30, 2021: $13.46B
| rr888 wrote:
| That video of the life of a 23 year old Meta PM was really bad
| timing. Looks like they need some screws to tighten.
| endisneigh wrote:
| I saw the video - didn't see any problem. What did you think
| the problem was?
|
| Metas real problem is TikTok, Apple and the cultural zeitgeist
| dleslie wrote:
| Yah, she even mentioned working during appropriate times; the
| video just showed the morning, lunch, and evening highlights.
|
| I can't help but conclude that the problem is that it's
| presented by a young woman.
| [deleted]
| threeseed wrote:
| > that it's presented by a young woman
|
| With a hint of ignorance and jealousy.
| jibe wrote:
| I'm jealous, I'm grinding away for 8 hours at desk, not
| chilling on a roof, eating and dancing. I'd take that
| fake job. Plz...
| chrisseaton wrote:
| Well why don't you apply then?
|
| If you think you can get through the infamous Meta
| interview like she has then go for it. I probably
| couldn't pass that interview myself so she's better than
| I am.
| sixothree wrote:
| I've often heard about how hard Google's hiring process
| is. And I like to think I have a really good knack at
| getting an idea of someone's proficiency.
|
| I have a distant relative who was working in javascript
| as his main job. But he didn't know what typescript,
| coffeescript, or web assembly were; even though he was
| working with javascript as his primary language. Nothing
| he described or talked to me about gave me the impression
| that he was able to do any programming whatsoever.
|
| But, he was 100% a "total frat bro". And of course he
| landed a job at Google. As a programmer. Am I jealous?
| Sure. Do I think he is capable of creating intricate
| things? Absolutely not. Do I think he will survive at
| Google for a long time? Definitely.
| chrisseaton wrote:
| > Nothing he described or talked to me about gave me the
| impression that he was able to do any programming
| whatsoever.
|
| Maybe he's just good at the job even if it isn't his
| whole personality?
|
| Like how do you think someone would get through Google's
| interview without being able to program? You have to be
| the very top of your field to pass that interview.
| threeseed wrote:
| Maybe you should find another job and grow out of this
| 1950s mindset.
|
| Because you can be productive working outside, on a roof
| top, on a beach etc.
|
| And making the time to eat well and look after your
| mental health has been proven to increase productivity.
| ChuckNorris89 wrote:
| I think you misunderstood his comment. There's no reason
| to lash out at him for his job situation. Many people
| don't have that many options of great jobs where you
| chill all the time.
|
| Most jobs out there are sitting nearly 8h at a desk, with
| breaks of course, even in Europe. Not everyone has a hot
| jobs market where you get to set your terms.
|
| Dicking around all day without doing much work is
| something I've never seen at any tech company I worked
| here but only in YouTube videos on life at top tech US
| companies.
|
| Maybe I was born in the wrong county/continent.
| kick_in_the_dor wrote:
| Surely it's not giving impression that employees don't
| actually work at the company, but sexism, right?
| m00dy wrote:
| She will be unemployed within the next 6 months. Same
| applies to young shopify entrepreneurs (dropshipping)... I
| don't think it is about gender.
| jibe wrote:
| More like the complete lack of anything resembling work.
| derekdahmer wrote:
| She got there well before her 8am meeting and and stayed
| through to what looks like a happy hour at the end of the
| day. Meanwhile even working from home I feel good if I
| start working by 9am.
| chrisseaton wrote:
| She says repeatedly that she was working between the
| things she showed. What do you want? Her literally
| staring at some code for four hours between breakfast and
| lunch?
| jibe wrote:
| She said it was a day in the life of a Meta PM, and I
| take it at face value. Looks like a day in the life is
| pretty cushy.
| chrisseaton wrote:
| > Looks like a day in the life is pretty cushy.
|
| Because she's allowed to take a break for lunch and she
| can work from an outside space? Your standards are too
| low.
| zerohp wrote:
| Posting a video that shows your work would get you fired
| at any big tech company. Even if your work isn't that
| interesting. You can't risk it.
|
| That's why all of these big tech TikTok videos only show
| cafes.
| arrrg wrote:
| Work is boring bullshit. That's exactly the correct
| mindset as an employee. She showed the parts of her day
| that actually matter. No reason to assume she doesn't
| work, it's just boring.
| skippyboxedhero wrote:
| I am just giving my opinion as someone who has worked as an
| investor and now works in tech: almost none of these people
| will be working in tech in five years, and most companies
| won't have PMs.
|
| You saw this kind of thing at investment banks pre-08,
| people who did literally nothing, created no revenue, they
| were just a $200k/year plant pot, left the industry in 08
| and never came back.
|
| From what I have seen, the situation in tech is worse...I
| am not even in the US, and have interviewed at places where
| cost is obviously out of control but they hired this guy
| with a CS degree who has literally no idea how to run a
| business (one place I interviewed at, the unit built the
| front-end for a savings product, iirc they had five sprint
| teams, each team had 3 business analysts, 1 PM, 1 test dev,
| 2 devs...it was madness, and the guy interviewing me was
| maybe 30, no business experience, had worked as a "senior
| dev" at Wipro or some other consultancy place, this guy
| couldn't even get people back into the office, no-one would
| go).
|
| I think people have been in the machine so long they forget
| what reality is. Reality is here now, everyone is getting
| fired, the free money machine has been turned off.
| dleslie wrote:
| > this guy couldn't even get people back into the office,
| no-one would go
|
| What does this have to do with anything else you brought
| up?
|
| Most programmers I know would sooner quit than return to
| the office; that doesn't mean they aren't productive.
| skippyboxedhero wrote:
| What does that have to do with anything else you brought
| up?
|
| My point is: the guy has no management experience, and is
| unable to lead his team. That is why he is running a
| bloated mess that will get everyone fired.
| rr888 wrote:
| > Metas real problem is TikTok
|
| Yeah it was particularly funny that it was posted on Tiktok
| not Instagram.
| abeppu wrote:
| I have no idea what she works on ... but surely at least
| some of Meta's product staff _ought_ to be regularly using
| TikTok both as consumers and creators, right? How could
| they attempt to compete without making an effort to
| understand why TikTok has been eating their lunch?
| lkramer wrote:
| There has to be a balance though. I remember hearing
| (probably a HN comment) that all the UI designers in the
| Windows team at MS use Macs, which blew my mind, but also
| explained so much.
|
| If you have people working on designing and improving a
| product who are ultimately not even willing to use it as
| a their daily driver, you get the kinda of disconnected
| mess that is that UI in Windows and the sometimes
| baffling decisions made.
| amaks wrote:
| Meta's real problem is Zuck.
| paganel wrote:
| > What did you think the problem was?
|
| She was sharing it on TikTok, that's the problem. If Meta
| product people have already stopped eating their own dog-food
| then something is very amiss.
| Cwizard wrote:
| Do you have a link?
| windsok wrote:
| https://twitter.com/anothercohen/status/1584636815281033216
| cjonas wrote:
| I'm choosing to believe this is satire... The alternative
| makes me depressed
| [deleted]
| [deleted]
| swores wrote:
| Having wasted my time watching that I hope this comment can
| encourage others to not make the same mistake. Urgh.
| pea wrote:
| The most baffling part of this is eating broccoli for
| breakfast. WTF?
| Jcowell wrote:
| It's a vegetable... you can eat those an any time of the
| day...
| mxuribe wrote:
| This started out as hilariously funny...until it faded into
| jealousy. Times like these, i almost wish society was
| organized into equal pay and benefits for everyone. Yes,
| yes, i know i sound like communist/socilaist (n othing
| wrong with that by the way)...But honestly, i felt like
| things were not fair *before* seeing that video...But now,
| i feel worse. /sigh
| Jcowell wrote:
| Why equal pay? Why not just interview for Meta and pass
| like she did ?
| Firebrand wrote:
| I've seen Twitter uproars against Google and LinkedIn employees
| who have uploaded similar content:
|
| https://twitter.com/coldhealing/status/1561022408206729216
|
| A lot of the lavish perks they've showed have been part of
| these companies since these two young women were toddlers. It's
| privilege discourse meeting the cringey nature of TikTok.
| spaceman_2020 wrote:
| You should have shorted Meta the day this video dropped. Not
| because it showed lazy workers, but because the worker shared
| it on TikTok, not a Meta-owned property.
| dnissley wrote:
| Went viral on Twitter though, so maybe Musk will be having
| the last laugh after all
| smileysteve wrote:
| I work from home, my in my day also consists of working out
| at the [home] gym, making coffee [in the kitchen], sometimes
| getting a view from my deck while working, walking the dog to
| the park, dinner and a movie with my wife and dog.
| qbasic_forever wrote:
| These things are just recruitment videos. They're made to get
| lots of views by being a little controversial. Their HR
| departments want people to see the free coffee, fancy office,
| etc.
| alphabetting wrote:
| These videos are more a tiktok trend for flexing than an HR
| thing. They attract a lot of negative attention, most
| unjustified IMO. I don't think ideal candidates for big
| tech would find these videos that appealing anyway.
| globalreset wrote:
| Seriously? Do these companies really need to market their
| cozy do-nothing earn-lot middle management positions?
| aninteger wrote:
| It was comedy though, right? Making fun of "Day in the life
| of..." videos.
| snoopy_telex wrote:
| She was 100% at the Meta offices on SLU, so she's a Meta
| employee posting a video about Meta life. Even if it's
| comedy, it's unlikely the company would agree IMHO.
| Scoundreller wrote:
| Yeah, I perceived it and others as an overdubbed mashup of
| other short videos.
|
| Nothing new on the internet.
|
| People even take entire movies and mix clips around to change
| the storyline entirely.
| [deleted]
| [deleted]
| loeg wrote:
| Note Reality Labs revenue is down _50%_ YoY -- not a rosy picture
| for the Metaverse. $285M revenue on $4B in expenses and:
|
| > We do anticipate that Reality Labs operating losses in 2023
| will grow significantly year-over-year.
|
| Yikes.
| dnissley wrote:
| 2021 was first full year of Quest 2 sales (released Sept.
| 2020). No new headset in 2021, so that's probably why revenue
| slipped.
| threeseed wrote:
| It's a multi-decade R&D project that happens to occasionally
| ship products.
|
| Not sure why anybody is expecting it to be profitable at this
| stage in its lifecycle.
| stephc_int13 wrote:
| I don't think profitability is what matters here.
|
| They simply are burning way too much money for an R&D phase.
|
| Are they building giant factories or something?
| asadlionpk wrote:
| You have to agree the tech involved is complex.
| stephc_int13 wrote:
| Sure.
|
| But to put things in perspective, the entire R&D budget
| for the first iPhone was $250M, and I don't think it was
| highly optimized for cost.
|
| 10B is 40x higher. And this is an average year, for an
| unfinished product that did not even start from scratch
| (they started with the Occulus Rift, a pretty advanced
| prototype)
| asadlionpk wrote:
| in my mind, amazing R&D product is either
|
| = low budget + passionate people + toxic environment to
| work in longterm
|
| OR
|
| = high budget + leetcoders + cushy working environment
| threeseed wrote:
| They have acquired quite a number of VR studios. And they
| were pretty far down the road in building their own SOCs
| before deciding to double down on their partnership with
| Qualcomm.
|
| I don't think it's fair to compare Meta against companies
| like Apple when they have up until now been almost entirely
| a software company.
| colinmhayes wrote:
| > They simply are burning way too much money for an R&D
| phase.
|
| I mean they're still making money. Mark doesn't give a shit
| about short term stock movement, why would he care about
| the division that he believes is the future of the company
| and maybe society losing money?
| jstx1 wrote:
| > we expect headcount at the end of 2023 will be approximately
| in-line with third quarter 2022 levels.
|
| > We do anticipate that Reality Labs operating losses in 2023
| will grow significantly year-over-year.
|
| Interesting.
| givemeethekeys wrote:
| Reducing Facebook / Whatsapp headcount to bet bigger on the
| Metaverse?
| gavinray wrote:
| Hot diggity, I don't know anything about money, but if you look
| at "free cash flow" at the end: > FREE CASH FLOW
| > > 3MO 2022 3MO 2021 9MO 2022 9MO 2021
| > > $ 173 $ 9,547 $ 13,151 $
| 25,876
|
| Does this mean they went from 13k * 1M to 173M in free cash in
| the last year?
| rahulgoel wrote:
| Yep, seems to be driven by 9.3B in purchases of property, plant
| and equipment in Q3 22 (up +116% from 4.3B in Q3 21). I think
| it's due to "investments in data centers, servers, and network
| infrastructure. An increase in AI capacity is driving
| substantially all of our capital expenditure growth in 2023."
| greenknight wrote:
| Q2 report... June 30 was 4,450M
|
| Q1 was 8,528
|
| and 9 months ago it was 13,151
|
| Now its 173.
|
| Approximately 4,000 per quarter for the past 3 quarters.....
| Pretty crazy.
| adam_arthur wrote:
| FCF isn't a great metric for tech companies due to how many
| shares they issue through employee comp. FCF calculation
| typically doesn't include this cost.
|
| But yeah, it's down bigly. So is their net income.
| pavlov wrote:
| My Quest Pro arrived yesterday. It's the coolest new computer
| I've used since the iPad. They're getting close to nailing the
| mixed reality form factor.
|
| At the same time it feels like the Apple Lisa. Expensive hardware
| that's clearly still not quite the end state, shipping with
| first-party software that's barely past demo quality. There's
| simply not very much to do on the Quest Pro so far, and the
| HoloLens trajectory suggests that real apps will be slow to
| arrive.
|
| Still, it's an entirely new style of computing and Meta has
| subsidized it by tens of billions of dollars already. I'll try to
| enjoy it while it lasts.
| moneycantbuy wrote:
| jjulius wrote:
| Their profile suggests that that company was bought by FB and
| that they now work elsewhere. Assume good intentions. Maybe
| put the keyboard down, take a walk and get some deep breaths
| in.
| awestroke wrote:
| > There's simply not very much to do on the Quest Pro so far,
| and the HoloLens trajectory suggests that real apps will be
| slow to arrive.
|
| Can't you play Quest 2 games on it?
| pavlov wrote:
| Yes, but I'm not really interested in games. This device
| feels like a novel type of computer with no apps.
| cableshaft wrote:
| It's at least backwards compatible with existing Quest 2 apps,
| and I've already started seeing "Quest Pro Update" on a few
| Quest Store apps, so hopefully you'll start seeing some
| software that targets it better soon.
| umeshunni wrote:
| > Expensive hardware that's clearly still not quite the end
| state, shipping with first-party software that's barely past
| demo quality.
|
| "Built for a Future That Still Isn't Here" is a headline I saw
| somewhere that resonates well with your comment.
| spaceman_2020 wrote:
| "Built for a future that no one even wants or asked for"
| colinmhayes wrote:
| I want metaverse content. Still waiting for the matrix.
| hbn wrote:
| > It's the coolest new computer I've used since the iPad.
|
| It doesn't inspire much confidence in me to compare it to the
| product that everyone thought was cool when it came out but
| over a decade later, even the company making it still doesn't
| know exactly what it's for outside of a few niche use-cases.
| threeseed wrote:
| > still doesn't know exactly what it's for
|
| It's a $30 billion a year business.
|
| Maybe they know a little more than you think.
| _jal wrote:
| I understand the hardware manufacturer's business.
|
| I just don't understand why humans buy them. Sure, they're
| neat, but there are a lot of neat things at that price
| point.
| fuckstick wrote:
| Because they serve the role of what used to often times
| filled by PCs. Turns out not everyone needs a PC and they
| also don't want have to do everything on a tiny
| touchscreen. If they didn't exist I think the alternative
| for many would be the Air.
|
| This shouldn't be hard to understand.
| [deleted]
| lumenwrites wrote:
| I don't know about other people, but it's the 2nd most
| useful device I own (after my laptop), and it is the
| device I use the most by far (if you look at the time I'm
| using it).
|
| To me, an iPad is a notebook that's always with me, where
| I write down all my thoughts in my journal, practice
| writing and screenwriting, do task management and
| planning (most of that in Obsidian). I also watch video
| courses, listen to music, browse the internet, all the
| stuff everyone uses their mobile devices for.
|
| Smartphone is too small for typing, and not as
| convenient, no other tablet is anywhere near as
| convenient to use. iPad mini is the perfect form factor
| for me.
| impulser_ wrote:
| I think they are probably very popular with old people,
| due to them being way easier to use and closer to a
| smartphone which they are probably most use too.
|
| My parents have completely given up on laptop and own
| three iPads because they are easier to use and maintain.
| They don't break or have bugs are often which required
| them call me and having me come over to fix lol.
| sankumsek wrote:
| Anecdotally, my whole family has them for digital
| reading/browsing without the clunkiness of a laptop or
| the small screen of a phone. Mind you, iPad power users
| in my family are children or elderly folks who otherwise
| wouldn't be using a computer.
| fshbbdssbbgdd wrote:
| I use an iPad as my main personal computer. It's like what
| Google wants you to use a Chromebook for, but without the
| janky framerates. It's the most pleasant web browsing device
| I've come across.
| mr_sturd wrote:
| Did Apple and Microsoft know exactly what the PC was for in
| its early days? They certainly had their own ideas for it,
| but it was down to the rest of the world to decide that,
| ultimately.
| nytesky wrote:
| Pretty sure the killer app was spreadsheets. IBM was
| international business machines after all, and PC were IBM
| clones.
|
| Also word processing/publishing. Very clear applications
| with an existing market.
| [deleted]
| tomjakubowski wrote:
| Apple sold more than 500 million iPads over the product's
| first decade.
| hbn wrote:
| I never said it was a failure. But it's certainly a
| supplementary device for most people.
|
| If all iPads disappeared off the face of the earth
| tomorrow, it wouldn't be nearly as big of a deal compared
| to if that happened with smartphones or laptops or PCs,
| etc.
|
| Meta has a big hurdle to overcome to make success out of a
| device with no real practical use so far, and one that you
| have to strap to your face.
| tomjakubowski wrote:
| For many people, and maybe most younger people, PCs are a
| supplemental device. I know a few folks who have an iPad
| and a smartphone but no personal laptop. To your point,
| though, I think more do get by with just the phone.
| silverlake wrote:
| For most of my family the iPad replaced their computer.
| Thankfully I no longer have to do tech support.
| micah94 wrote:
| I second this. The ipad has _become_ the computer for
| several in my family as well.
| smilebot wrote:
| Your username is a game I love playing on my Quest 2. Streamed
| from my beefy PC ofc. CS 1.6 on VR. What a time to be alive!
| urthor wrote:
| Note almost the entirety of the lost revenue is from Europe,
| quarter on quarter year on year.
|
| Considering Meta's business is _advertising_.
|
| The fact advertising revenue is flat in the Americas & Asia is a
| strong signal companies are not cutting advertising. Ergo, no
| massive collapse in consumer confidence is predicted.
|
| It's just Europe that looks dire.
|
| Or at least that's what Meta wants you to think.
| onlyrealcuzzo wrote:
| Revenue is flat in the US - yet dollars are down ~8% - so
| adjusted for inflation - revenue is down considerably.
| NovemberWhiskey wrote:
| That's not how anyone reports on this; you don't deflate your
| revenues for changes in the value of money.
| acchow wrote:
| Don't they report earnings in constant dollars?
| onlyrealcuzzo wrote:
| No.
| jsemrau wrote:
| Not sure what "constant dollars" are, but I did Board
| Reporting for a Fortune 25 company and we used a 3 month
| average to limit the impact of sudden fluctuations.
| ssl232 wrote:
| Apart from $/EUR being down, could this also have something to
| do with the GDPR starting to get enforced, biting into
| Facebook's ability to make targeted advertisements? In the past
| 6 months or so I've noticed cookie permission popups mostly no
| longer have all their tracking options enabled by default.
| spaceman_2020 wrote:
| I wonder how much of this is the "spite spending" effect. We've
| barely had 6 months of normalcy. People are sitting on some
| savings. Many haven't left the house or traveled freely for 2
| years. Maybe that's why they're okay spending more than they
| usually would - just a "f*ck it" after 2 years of isolation.
|
| Certainly was the case for me. I certainly overpaid for a lot
| of things recently. But we had our big festival here this week
| and now I'm tapped out. Next year will be a year of sobriety -
| at least for me.
| CleverLikeAnOx wrote:
| I think for every spite spender there is at least one other
| person who is habitually cautious now. I have found it harder
| to get some people to go out and do things.
| spaceman_2020 wrote:
| Happening more and more with me. Food prices are
| legitimately too high. I could justify it earlier in my
| head because I'd been saving for two years. But now...I'm
| tapped out.
| darth_avocado wrote:
| What most people don't realize is that revenue in Europe is
| down not because spending is down, but because dollar is
| stronger. They don't explain this here, but they did in Tesla
| earnings. Expect multinational companies to have a lower
| European business this quarter.
| NovemberWhiskey wrote:
| > _They don 't explain this here, but they did in Tesla
| earnings_
|
| It's in the first bullet point on page 2:
|
| _Revenue was $27.71 billion, a decrease of 4% year-over-
| year, and an increase of 2% year-over-year on a constant
| currency basis. Had foreign exchange rates remained constant
| with the third quarter of 2021, revenue would have been $1.79
| billion higher._
|
| EDIT: who thinks there would still be explanatory wording
| added here if forex rates had moved the other way and
| revenues had gone up ... ?
| DeRock wrote:
| The real story is how much expenses rose. As a percentage of
| revenue, expenses went from 70% last quarter, to 80% this
| quarter. Even if their revenue was flat (it wasn't), that alone
| would represent a third of their net income disappearing.
| colinmhayes wrote:
| number of ads shown up 17%, price per ad down 18%. Seems to me
| that advertising is being cut and meta is making up for it by
| showing more ads per user per time.
| pardesi wrote:
| How will zuckerberg make his employees work hard when the stock
| market keeps killing their motivation? Or those 70K+ are
| mercenaries of his madness? I think he should be replaced by a
| mature CEO who can balance growth & value (like other tech
| companies)
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