.png){kind=logo}
Analysts predict that the company is likely to generate $44.71 billion in revenue, representing a 14% increase compared to the previous year, with earnings per share (EPS) estimated at $5.85. Additionally, adjusted net income is expected to be around $19.92 billion, positioning Meta ahead of its peers during this earnings season.
The company's Advantage+ platform, which uses artificial intelligence to optimize ad placements and factor into return on ad spend (ROAS), has been providing strong results.
According to Deutsche Bank analysts, they saw approximately sequential growth in ad revenue in Q2 23 and expected stronger results in Q3 23. This rebound follows earlier headwinds, including temporary declines in Chinese e-commerce ad spending caused by trade tensions. However, US-China relations were beginning to thaw by mid-May, and ad revenues began to recover.
Analysts are also looking at the new WhatsApp monetization model introduced this quarter. According to Evercore, WhatsApp could have more than $10 billion in annual ad revenue in 2028, which would be a meaningful contribution to Meta's portfolio.
Meta's Family of Apps, Facebook, Instagram, Threads, and WhatsApp, continue to exceed product engagement expectations across the portfolio. Threads has had a 13% increase in user engagement since its inception, and Facebook and Instagram continue to report strong global session counts.
At the same time, another one of Meta’s apps, Meta AI, launched in April, already has over 11 million downloads globally, demonstrating great initial success when it comes to consumer-facing AI tools in early launch stages.
Also Read: Will Meta Smartwatch Outperform Apple and Samsung? Reality Labs Holds the Key
While the Reality Labs division remains unprofitable, Meta's AI-integrated smart glasses have surprisingly taken the number one position in the VR/AR space, beating Apple in terms of consumer adoption.
At the same time, Meta’s AI investments have also turned aggressive. The company announced plans to invest $100 billion in next-gen data centers and announced $14 billion for Scale AI. CEO Mark Zuckerberg has also prioritized hiring the best talent in the field, suggesting there are long-term enterprise-level artificial intelligence infrastructure ambitions.
Meta's shares have risen almost 20% year to date, outperforming the market as a whole. As the company prepares to announce Q2 results, investors will be looking for signals that Meta’s advertising growth stays strong, that its AI initiatives are gaining traction, and that the growing suite of apps holds some strategic value.
With the busiest part of the tech earnings season upon us, the report from Meta will play a large role in the trajectory of the sector for the foreseeable future.
