What You Need to Know Before Meta’s Earnings Report

UPDATE – July 26, 2024: This article has been updated to reflect more recent stock price information.

Key conclusions

Meta is scheduled to release its second-quarter financial results report on Wednesday after the close of trading.
Analysts expect the company to report year-over-year revenue and profit growth. Investors will be watching for strength in Meta’s advertising business.
Meta will likely discuss the company’s AI capabilities following the launch of its new open-source AI model, Llama 3.1.

Meta Platforms (META) is set to report its second-quarter earnings after the close of trading on Wednesday. Investors will be looking for growth in advertising revenue and an update on its artificial intelligence (AI) plans following its recent announcement of an AI model.

The parent company of Facebook and Instagram is expected to report revenue of $38.35 billion, according to estimates compiled by Visible Alpha, up about 20% from the same period last year. Net income is forecast to be $12.31 billion, or $4.71 per share, up 58% from the same quarter last year.

	Analysts’ estimates for Q2 2024	Q1 2024	Q2 2023
Income	$38.35 billion	$36.46 billion	$32 billion
Diluted earnings per share	4.71 PLN	4.71 PLN	$2.98
Net income	$12.31 billion	$12.37 billion	$7.79 billion

Key Metrics: Advertising Revenue Growth

Meta will report second-quarter ad revenue, and Citi analysts expect it to grow 20.5% year-over-year to $37.95 billion. Analysts cite an improving ad environment, the launch of Instagram Reels, and new products for advertisers.

Most advertisers plan to increase spend or maintain spend levels on Meta platforms, which could drive strong second-quarter results and put the company on a positive trajectory in the second half of the year, according to a survey by Wedbush analysts. Earlier this year, the tech giant expanded its offering of AI-powered tools for advertisers.

Business Spotlight: AI Potential After Llama 3.1 Launch

Meta this month unveiled its open-source AI model Llama 3.1. JP Morgan analysts said the launch could make Meta AI “the most widely used AI assistant by the end of the year, if not sooner.”

The earnings report will be an opportunity for Meta to reassure investors that its increased spending on AI investments is helping the company capitalize on growth opportunities.

Meta shares have gained nearly a third of their value since the beginning of the year, closing at $465.70 on Friday.