Meta Stock ( NASDAQ:META )
According to my theory, Meta’s ( NASDAQ:META ) spending will become more effective in 2023. Although they are being more cautious than they were in 2022, this does not imply they will cease making investments in the metaverse.
The Figures
Although Google ( NASDAQ:GOOGL ) has always generated more revenue than Meta, until 2022, Meta maintained exceptional operating margins. In previous years, despite having significantly lesser revenue than Google, Meta virtually had the same operating profits. This was due to the company’s excellent operating margins.
The fact that Meta’s average revenue per user (ARPU) has temporarily ceased to increase is one of the reasons they need to be more careful with their spending.
Not just Meta had a decline in ARPU in 2022. The ARPU for Snap ( NASDAQ:SNAP ) dropped from $13.64 in 2021 to $12.98 in 2022.
Because a large portion of Snap’s users is in the lucrative North American market, its ARPU is currently very disappointing.
The Year of Efficiency is the theme for 2023, CEO Mark Zuckerberg announced at the beginning of the 4Q22 call. With layoffs and reorganization, Meta ended in 2022. They are currently reducing middle management in order to simplify their organizational structure and reduce capex spending. In 3Q22 and 4Q22 , expenses as a percentage of revenue went out of control, and management is aware that this is a problem.
Operating income decreased from $46.8 billion on $117.9 billion in revenue in 2021 to $2...
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