Shulou(Shulou.com)11/24 Report--

In the early morning of October 27, Beijing time, Facebook parent company Meta today released its unaudited financial results for the third quarter of fiscal year 2022 ended September 30. According to the report, Meta's third-quarter revenue was $27.714 billion, down 4% from $29.01 billion in the same period last year; net profit was $4.395 billion, down 52% from $9.194 billion in the same period last year; and diluted earnings per share were $1.64, down 49% from $3.22 in the same period last year.

After the announcement, senior executives including Mark Zuckerberg, chief executive of Meta, David Wehner, chief financial officer, Susan Li, vice president of finance, and Marne Levine, chief business officer, held analyst conference calls to answer questions about the business.

The following is a transcript of the conference call:

Morgan Stanley analyst Brian Nowak: my first question is about capital expenditure and return on investment. The guidelines show that capital expenditure is higher than investors expect. Mark, could you give me an example of how these new AI investment projects are different from those in the past? When are investors expected to see returns?

The second question is about user participation. You mentioned in your briefing that the usage time of Reels users has increased. Could you please share with us the changing trend of Reels users in the United States? What are the changes?

David Weiner: I'll answer the question about how long users use it first, and then Susan will read you the questions about capital expenditure.

In terms of the duration of users, we are very satisfied with the current state. As Mark mentioned earlier, we see an increase in the number of Reels users. In addition, the total amount of time users spend on Instagram and Facebook is rising year-on-year in the United States and around the world. Although we do not deliberately optimize the duration of user use, but the current trend is positive and positive. The reason why there is no effort to optimize the duration of user use is because it may distract us, and we prefer to focus on short videos and other content.

Susan Lee: David also mentioned in the briefing that we expect capital expenditure in 2023 to be between $34 billion and $39 billion, with incremental spending mainly coming from investment in AI. We are very concerned about the return on investment (ROI) of AI investment, which is closely related to the usage trend of our future users. At present, the AI recommendation algorithm does have a positive impact on us. In the conference call in the second quarter, we shared with you that only by extending and upgrading the AI recommendation model, the usage time of Facebook Reels users has increased by 15%. We also believe that this trend will continue to improve with the iterative upgrading of the AI algorithm. In terms of advertising, we plan to further upgrade the AI algorithm for advertising products, and the early results are very exciting.

All in all, we will pay close attention to the above developments. At present, the company is still in the early stage of AI investment, and the related capital expenditure depends on the return on investment brought by AI investment. If the effect is good and the return is high, we will increase our investment; on the contrary, we will slow down the pace of investment.

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