The meta earnings reports of Q4 2021 have been released; in 2022, the focus will be on monetizing Reels and expanding the metaverse.
After Meta (previously Facebook) released its fiscal Q4 earnings, the total excitement resulted in a share price drop of more than 20% in after-hours trading. Although sales were $33.67 billion, barely over the expected $33.4 billion via CNBC, earnings per share fell short of expectations ($3.67 vs. $3.84 according to Refinitic via CNBC).
Meta’s daily and monthly active users also fell short of forecasts, with 1.93 billion DAUs (daily active users) vs. 1.95 billion (according to Street Account via CNBC) and 2.91 billion MAUs (monthly active users) versus 2.95 billion (according to CNBC).
Facebook, Instagram, WhatsApp, and Messenger are among Meta’s Family of Apps, with combined revenue of $32.79 billion and an operating income of $15.89 billion. Meanwhile, its Reality Labs segment (AR/VR R&D and hardware sales of Oculus products and solutions) generated $877 million in revenue but lost $3.3 billion in operating income.
Following Meta’s earnings call, Zuckerberg wrote a Facebook post criticizing the company’s weaknesses and opportunities for development moving ahead. Meta’s concentration on Reels, which continues to have significant interaction on Facebook and Instagram, is the most visible change.
“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly. And this is why our focus on Reels is so important over the long-term. As is our work to make sure our apps are the best services out there for young adults, which I spoke about on our last call.”
Facebook Watch and Stories, according to Zuckerberg, both took longer to monetize as the platforms transitioned to incorporating them into Facebook’s main feed.
“We’ve made these types of transitions before with mobile feed and Stories, where we took on headwinds in the near-term to align with important trends over the long term. And while video has historically been slower to monetize, we believe that over time short-form video is going to monetize more like feed or Stories than like Watch. So I’m optimistic that we’ll get to where we need to be with Reels too.”
Meta intends to make investments in 2022, according to Zuckerberg.
“First is Reels. It’s clear short-form video will be an increasing part of how people consume content moving forward, and Reels is now our fastest growing content format by far. It’s already the biggest contributor to engagement growth on Instagram and it’s growing very quickly on FB too.”
Meta views Discord or Slack as community and organization tools and promises to bring features to Facebook groups, such as Community Chats, for more precise communication within Facebook groups.
“So, we’re going to help people on WhatsApp better organize their group chats and make it easier to find information for the communities they’re part of – like parent groups or neighborhoods. And we’re also building Community Chats on Facebook and Messenger for real-time conversations within those groups and communities.”
Meta’s Shop platform on Instagram has seen a drop in ad income and conversions due to Apple’s iOS privacy updates and tighter user data rules in Europe. It will concentrate on reorganizing its ad infrastructure to overcome the barriers to delivering targeted advertisements.
“Next up is ads. With Apple’s iOS changes and new regulation in Europe, there’s a clear trend where less data is available to deliver personalized ads. But people still want to see relevant ads, and businesses still want to reach the right customers. So we’re rebuilding a lot of our ads infrastructure so we can continue to grow and deliver high-quality personalized ads.”
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