Meta’s stock drops on light revenue guidance, dwindling free cash flow
Meta said legal and severance charges lifted expenses 55% as shares fell 4.2% after it forecast revenue below analyst estimates.
- On Wednesday, Meta Platforms reported revenue grew 28% to $60.8 billion for the April-June period, though profit fell 14% to $15.85 billion, or $6.18 per share, missing Wall Street expectations.
- Total expenses surged 55% to $42.03 billion, driven by $2.40 billion in legal charges and $1.18 billion in severance costs for roughly 8,000 workers laid off in May.
- The Menlo Park, California-based company saw daily active users on its "family of apps"—Facebook, Messenger, Instagram, and WhatsApp—grow 3% from a year earlier to 3.6 billion.
- Meta shares fell $24.76, or 4.2%, to $560.85 in after-hours trading, as investors responded to the profit decline and rising operational costs.
- For the current quarter, Meta forecasts revenue between $61 billion and $64 billion, below the $63.14 billion Analysts expected, though CEO Mark Zuckerberg stated AI is "accelerating our core business.
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The company led by Mark Zuckerberg recorded a strong decline in its shares, after presenting the results of the last quarter
Meta shocks investors with weak quarterly figures and a cautious outlook. The ambitious investments in artificial intelligence have so far brought little return and put the business model under pressure.
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