Meta to report second-quarter earnings after the bell

Meta will report second-quarter earnings after market close on Wednesday.

Here are the key numbers to watch:

• Earnings: $2.91 per share expected, according to Refinitiv
• Revenue: $31.12 billion expected, according to Refinitiv
• Daily Active Users (DAUs):  2.04 billion expected, according to StreetAccount.
• Monthly Active Users (MAUs): 3 billion expected, according to StreetAccount.
• Average Revenue per User (ARPU): $10.22 expected, according to StreetAccount.

In April, Meta put an end to three straight quarterly revenue declines, reporting modest sales growth for the first quarter. Investors will be looking to see whether Mark Zuckerberg’s company is seeing longer-term indications of a recovery in the digital advertising market.

Revenue growth in the second quarter is expected to climb to about 8% and then pop up into the double digits in the second half of the year, based on analysts’ estimates.

Meta’s online ad business has been hurt by a confluence of factors, including the ongoing Ukraine war, a shaky economy and the lasting impact of Apple’s 2021 iOS privacy change. That update made it more difficult for companies like Meta, Snap and Twitter to track users across the web, limiting the effectiveness of many of their customers’ ad campaigns.

On Tuesday, Snap issued second-quarter guidance that missed analysts’ expectations, sending the shares down almost 20% in extended trading and underscoring the company’s continuing struggle to overcome Apple’s update. Meanwhile, Alphabet reported better-than-expected second-quarter results, driven by the company’s cloud-computing business. Google’s ad revenue only rose 3.3% from a year earlier.

Meta’s attempts to improve its ad system following the iOS privacy change appears to be showing some signs of success. The company’s recently released Advantage+ service, for example, is finding increased interest among retailers looking to spend more money on Meta in the hopes that their online advertising campaigns can be more effective.  

A recent survey from William Blair showed that companies are considering increasing their online marketing budgets, albeit modestly, for the rest of the year.

Brad Erickson, an analyst at RBC Capital Markets, told CNBC last week that, based on his recent industry channel checks, small businesses remain concerned about the economy and are generally more reluctant than big companies to increase digital ad spending. That’s a potential concern for Meta, which derives much of its overall sales from smaller and medium-sized businesses.

Company executives will discuss the results with analysts on a call starting at 5 p.m. ET.

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