Facebook Q3 results meeting minutes: metaverse, ios14, snap

The metaverse will not bring commercial profit in the near future, but will the metaverse still have to be renamed? What impact does the change in Apple's iOS 14 privacy policy have and how to deal with it? Let's take a look$Meta Platforms (META.US)$How did executives respond at the Q3 results meeting

[Key points]

1. Attitudes: Management sees Apple's changes as the biggest obstacle.2021 was a year of unusually strong revenue growth, but there was some uncertainty about the fourth quarter and 2022.It's facing intense competition from TikTok and Snapchat.

2. Target: The number of employees in the company increased by more than 20% compared to the third quarter. The company also expects growth to slow in 2022 and profit margins to be lower than in 2021.The North Star indicator for business is to help 1 billion people use the metaverse and support hundreds of billions of dollars in digital commerce by the end of this decade.

3. Investments:The metaverse will not be profitable anytime soon.Investments include new platforms, virtual reality product lines, and augmented reality product lines.

[QA Q & A]

Q1: You've talked about your long-term focus on the metaverse, and I hope you can help us review 1, 3, and 5 years of wishes from a product perspective.

A1: So over the next 1-3 years, you'll see us put more of the basics in place.This is not an investment that will be profitable for us in the near future, but we basically believe that the metaverse will be the successor to the mobile internetIt will enable the ultimate form of expression we're trying to build, a social experience where people can truly feel the presence of the people they care about, no matter where they are.

So next, I'm not going to focus on the commercial results of the products and infrastructure we're deploying. There are new platforms, hardware components, the entire virtual reality product line, and the augmented reality product line. We're starting to put these parts in place.Our business's North Star is our hope that by the end of the decade, we can help 1 billion people use the metaverse and support hundreds of billions of dollars in digital commerce. I think if we can do that, it'll be a great investment in the long run.

Q2: Regarding iOS changes, can you say this is the main downside you've seen in Q3 and expect to see in Q4?

A2: Right from the start, you really have to consider what personalized ads are. We think they're better for individuals and businesses, and especially important for small businesses. They can also be done in a very private and secure manner. We're developing privacy-enhancing technology to minimize the amount of personal information we know and use more aggregated or anonymised data, while still allowing us to display relevant personalized ads and measure effectiveness.

In terms of adverse factors in the third quarter, changes in Apple's platform were the biggest factor.This is indeed the first full quarterly impact. Had this not been the case, we could have expected a month-on-month increase from the second quarter to the third quarter.

Q3: How will it be a permanent and temporary driver of operating expenses and capital expenses over the next few years?

A3: Regarding the 2022 spending outlook, it is still too early, but we would like to give a preliminary outlook on the scope of our anticipated spending. We have many priorities in advertising, artificial intelligence, commerce, and privacy. So when you put all of these things together, we have a really big spending plan for next year.The main driver will be the accelerated growth in the number of employees in 2022.As a result, you'll see that the number of employees this quarter will exceed 20%. And we also expect that once more employees return to the office in 2022, office operations and travel will be more expensive. Currently, we have not provided a breakdown of this part of the cost.

Q4: In terms of spending in 2022 alone, the growth rate was around 29% to 38%. So what are your thoughts on revenue growth in 2022?

A4: At this point, we haven't provided a specific revenue outlook for 2022. We will continue to see opportunities for growth in the number of ads and prices next year. Obviously, 2021 will be an incredibly strong year of revenue growth, so we expect growth in 2022 to slow down compared to 2021. Also, there is some uncertainty implied in our fourth quarter revenue range, and I think this also applies to the outlook for 2022.

Given the fee growth we've outlined, anticipating around 30%, we don't expect revenue to grow to that level. Therefore,We expect profit margins in 2022 to be lower than in 2021.

Q5: Can you talk about current trends in the engagement of millennials and young audiences on Facebook and Instagram?

A5:Our products are widely used by teenagers, but we face intense competition from the likes of TikTok, and Snapchat in particular.Obviously, we're focused on continuing to innovate and launch products such as Reels to attract a younger crowd and retain a younger base for our products. That's why we continue to build and invest in these areas.

For more information, please click to watch Facebook's 2021Q3 earnings call

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