The 4th picture will show you what their EPS would look like if we take out reality labs. I will however go through the other 3 pictures to explain the current situation
Meta analysis 1
Meta revenue came in -4.5% lower than the sept 2021 same quarter. As you can see, in 2021, for every 1 dollar of revenue, 64 cents was going to costs. In 2022, for every 1 dollar of revenue, 80 cents is going to cost. We’re seeing a 45.66% decline in operating income. Also they are paying 21.18% in taxes which we will use later in our picture 4 calculation.
Meta analysis 2
In the 2021 quarter, eps came in at 3.22 and in the 2022 quarter, eps came in at 1.64. That is essentially a 49% drop. If we’re looking at diluted shares outstanding, the number declined by 6% meaning they are outpacing stock based compensation with their buyback program. Their total share based comp expense has increased 31.74% which is understandable given they are growing a new revenue segment
Meta Analysis 3
The information here shows the revenue segments and as we can see, from the 2021 quarter to the 2022 quarter, reality labs revenue dropped by 48.92% and the family of apps revenue dropped by 3.6%. Given that reality labs is the segment they are pouring money into, this is highly unwelcoming news. This quarters loss on the reality labs segment also came in significantly higher and compared to 2021 quarter, was 39.57% higher.
Meta Analysis 4
Now if we remove reality labs, EPS would come in around 2.71 versus the 1.64 we got. That is a 65.24% increase on EPS. Keep in mind that there are shared expenses and getting rid of a segment may not be as oversimplified as I have shown here.
Hope you enjoyed the post and would love to hear any additional insight.
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