Meta's stock drops on earnings miss, light revenue guidance
Meta shares fell after the company reported a revenue forecast that missed analyst expectations and revealed a significant decline in free cash flow due to heavy AI infrastructure spending. CEO Mark Zuckerberg emphasized the company's commitment to aggressive AI investment, including new agentic models.
Why it matters
The market reaction underscores investor anxiety regarding the high capital costs of the current AI arms race and the timeline for realizing returns on these investments.
Meta shares slid in extended trading on Wednesday after the company issued a weaker-than-expected revenue forecast and took a big hit to its cash pile.
Here's how the company did, compared with estimates from analysts polled by LSEG:
Meta said it expects revenue this quarter of between $61 billion and $64 billion, or $62.5 billion at the middle of the range. Analysts were expecting guidance of $63.15 billion, according to LSEG. The company said that the guidance "assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth, based on current exchange rates."
Daily active people, or DAP, came in at 3.6 billion, trailing Wall Street estimates of 3.61 billion, according to StreetAccount. DAP measures the number of users of Meta's family of apps.
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