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FB Meta Platforms

Participants
Deborah Crawford Vice President of Investor Relations
Mark Zuckerberg Chief Executive Officer
Sheryl Sandberg Chief Operating Officer
Dave Wehner Chief Financial Officer
Brian Nowak Morgan Stanley
Justin Post Bank of America
Douglas Anmuth JP Morgan
Youssef Squali Truist Securities
Ross Sandler Barclays
Mark Shmulik AllianceBernstein
Brent Thill Jefferies
John Blackledge Cowen
Colin Sebastian Baird
Michael Nathanson Moffett Nathanson
Call transcript
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Operator

Good afternoon. My name is France [ph], and I will be your conference operator today. At this time, I would like to welcome everyone to the Facebook Second Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. will call This Instructions] be recorded. [Operator you thank very much. We Ms. of you may Deborah Crawford, Relations, President Vice Facebook's begin. Investor

Deborah Crawford

you. Thank Good earnings afternoon, Facebook to second and quarter call. conference welcome

Sheryl results Joining Mark me discuss and our today Zuckerberg, Wehner, to CEO; Sandberg, CFO. COO; Dave are

started, update may get XX-Q to like in to with that those forward-looking today's of result press quarterly by call as no differ release you materially would and or these to include forward-looking statements. our take today these information could results on our new from differ to and remarks make SEC. I report set will are events. statements statements opportunity cause on Factors forward-looking as today, Form statements. on remind forth we assumptions Before this undertake of that filed a Any are Actual these that results materially based contemplated future this the we we in obligation

GAAP measures. to press on release we at accompanying is earnings now, website The may release. During to to And of presentation the like are press turn investor included I'd in non-GAAP investor.fb.com. measures A and present and over this non-GAAP GAAP our reconciliation today's call, both call available financial an Mark.

Mark Zuckerberg

we're the important for lot start it's of I'm and services, company, our and I on discuss the vision the today also our and the own, of ahead. these people but blocks thanks who our I'll future going creators, to use our future seeing and areas computing next commerce of a us the our product everyone, platform. actively to now that of for major joining as value a building than we're Internet about that some its for for was and unlock well. around billion X.X by Each and Hi is or product of efforts and today. want are good quarter This themes more business. There excited one discussing roadmap more

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announced are the we're Facebook and creator going across Instagram. billion we integrations publishing $X find and launched Facebook Live we tools keep audio can creators our in our live economy free grow To subscription through use rooms. to grow including help audiences, overall, also and and service We investing for to writers recently with with and creator now groups, XXXX, their that bulletin, features

that do I'm the different going people services. voices optimistic that's new will work across more to lead of creators opportunities they and lots during get want that So to to our

second today commerce. is to about I that want area The talk

more grow our Our goal businesses and experiences is people businesses platform. with even here on for better to help create interacting to

every to the place starting want from millions We world-class to for commerce, the the way off living, make businesses the be that is place just approach help help or to people is businesses we discovery, by build either. and reach customers creators for lead services of experience down at also these the that like personalized new at often of all site, webpage the but stack, what services to not results payments. we optimized world-class for information of where the work Our that's our top started you layer down ads And and not way best well. we as best and here to not grow to be ads building and people you want to best a businesses for tools potential to stack that's they like, good it your doesn't land found products to on but might payments a or when re-enter have link a discover and

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time. ads going way business native It's confident take given long-term strategy. to right at stack it's discovery And bet a adds So it's in the storefront, but this our already, product direction. from is the I'm and especially meaningful, while of before work down payments on scale making that we we're progress our the also to commerce a as long-term the same

Brazil, WhatsApp India. payments friends. well everyone as are in this and using to simple now So QR money adding secure Messenger send in to people We're payments to are new of US as features the available like way in codes. a Lots as

our available option of that on within seeing ahead. the and Facebook business that especially making time, our announced you view roadmap deeper to for full other web about checkout in we're commerce across accessible going or as that you're that of most now on apps the after are We start also web content. ads have of means excited first the experiences a Pay I'm The just months see apps and we clicking it integrations services, our a in which outside

as apps a to are This software which to we experiences be keeps virtual very forms invest Quest can building third this in to be we're pass-through talk we're and in popular to particular X reality of and well focused is We're better use unlocking platform. fits on seeing here while building seeing social, Quest social recently also and updates, product critical lot including and work, But experiences of and of our most I to social The the we're continuing and building point. keeps that full fitness. broadening want as reality that start well are a most for area about the as next platform where reality doing point other computing sense next why, internet content will as on building virtual compelling technology The Quest. it. regular getting that's original heavily still a presence. cases going and creativity developers monthly deliver so the thesis as our entertainment The it generation there services. range on continues well, at experiences of well beyond popular released mixed APIs is games

with release factor, smart here, iconic Ray-Ban glasses will they some first ahead Looking let things. EssilorLuxottica. and next you their from our launch The product form do the glasses pretty in be of neat partnership the have

glasses So the on and I'm continue towards reasons augmented to future. make to excited journey full plans reality the people get in to progress

areas value much see also the of the to going efforts And working our ahead, unlock goal metaverse. to the I'll on their be discussed commerce towards a creators, and next now that this region and months we're a these across that. so I've of a that own. the how lot build can important map discuss and to platform, in priorities the But larger help Now, you to about future each computing us they're initiatives the the more for are today, as company major are want sharing part together, I lot

present So an to And It's be We virtual of what with of kind the believe environment. is than going just metaverse? And be digital spaces. Internet inside this about embodied that a successor in you're that mobile Internet. think we to at. people rather is can looking is can the this you the

different and virtual devices to You're apps reality of able PCs levels the metaverse be from different devices. to going access and and immersive phones fidelity to augmented from all on

Within games the metaverse, and you play work, can with build friends, out, hang a more. create

feeling express going ourselves and that or going another Creation, this to everything metaverse is which on another to entirely as some don't economic today, like and do are be objects defining on place. to to digital make going of can in Internet today You're Internet the this that person you with is the things basically there lead really we to quality be The sense and well to central new you're that experiences opportunities. dancing. able avatars as presence, is the how

a lifetime. I But we're all of just is focus on going one one over what themselves. to get of the be the to that I've of last company building this most it to by exciting projects this our is great no take on learned that years think work we build to able overall, five work and could going can't experiences. Part is in lot that,

systems We creating. millions and all to also what to and in expression open and we're believe is I need stack, participate. up that require ecosystem standards, be going to They're potential, companies, everyone for to the that we a protocols our of built continuation way of also going is as In new years. down for rendering of and to many many in metaverse people make fill build helping can the and build to create devices, should see order to in of need ultimate to from upside ways, over here the going a very sure software it other be of new opportunity investment that participate technology so we're in that a our together. new it's the technology. everything And new engines expect focus that this chips, to but to its for payment significant lot between. is value a work brings people metaverse social many the I

I starting of I've started to Some well possible Facebook of now. only before dreamed become building are that since experiences the

you and you gradually we're that years, see investments excited come vision If to over you see the look we've starting why could about this it. the at can made so to focus,

far. is So, chapter community, just to months to the next expect everyone share in to exciting metaverse generation now, And to a for us seeing here want years, coming as which And seeing take of company to to also there's and us being they're all us many as next some, from the along is employees social journey milestones the going I get thank metaverse in so addition Sheryl. do meantime, to the media to our to be on transition Internet, will of And the our I be company. of and the continue I But in people with the this that we'll us who company. moment as all be have grateful primarily supported a going a lot the we way, there, be a in you. including ahead. partners in everyone and a

Sheryl Sandberg

healthy. I Thanks, hope you're all everyone. safe and Hi Mark.

was So quarter a business. really strong for our this

billion, revenue verticals. across was total which in growth a most Our seen $XX.X for strong year-over-year regions all XX% increase. and We've QX is

hard strongest well retail were in performed those Our the and continued COVID. like also And others verticals CPG. we're that seeing are pandemic, throughout e-commerce, travel hit recovery that including by have

more to businesses transformation, be customers to the driven orders in long-term which online. ongoing shift products businesses pandemic investments continues reach Not it accelerated and has the much was create during digital by much and our digital to a make expensive online and and ago, help performance long the remotely. tools presence, for Our harder take

through with Messenger ads, reach up these With Instagram. people profiles or can directly things and in few going have their Reels, businesses, and stories chats products and their interested and be find and Our pages, services to tell a so or when has WhatsApp. with live in Facebook They person ways creative engage likely And tools been This products Facebook customers accessible. many much people the easily make just by in dollars. set and Stories small especially businesses, and or they can more Instagram. groups helped harder. on success most personalized for reaching creators they They've Pizza on Businesses City. and in hit, easier pop-up can the is COVID family-owned XXXX. locations example and a But baking at since canceled. great A catering business shutdown pop-up when York Cupcake, shops New can been selling events

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their for the advertisers in make we've right so, To ads If products to new on we everyone working discovery product success more effort. News over about it's more peoples we've the shifted over with our And experiences, great and started our and we XX constantly feeds, decade of like information. journey found been to deliver way innovative the relevant growth support and side the next while the or To take consumers four people. as past you we're by we hand new quarter-after-quarter, build our developing the Then products years, a year-after-year, think within mobile We desktop more on need to businesses ads Feed. for these of created put ads giving era business experiences, right on ads reach similar personal of on Reels, build personalized control consumer to for focused over and to next products. consumer in then Stories innovations we're the be going areas.

The keep love. products the apps our and best making businesses want first to places discover is to discovery. We you'll

in to testing about browse businesses where like which on and we're to recommendations example, experience to beauty, ads fitness make topics tap can new or News from For a clothing, content Feed you show. context smarter reducing

you're we if a watching could flights. hotels travel and So show ads for video,

is We're it it community on about and second modern where delivered your product, buy a ago. all building ads, a seamless doorstep. which messaging, for to have commerce, pay journey, moment area system it, touched a personalized Mark across customer creating a it's shops discover and to easier payments. It's The commerce tools,

they of know We the personalized is technologies. getting privacy are ads The can results want because through continue challenges We businesses future. experiencing into privacy-enhancing make platform third area great long changes. safe sure to

Business across through management, business relationship business across measure a the easily to four reach people businesses still businesses businesses, to advertising. of we're Jobs. to all amount messaging Suite. it's industry long-term rely all going building while messaging apps digital will areas, help it tools, innovation across our message want trend sizes We're personalized the is ads marketing. Facebook We help our fourth solve on instead of on helping these and with from their help customer with hiring or The develop Instagram We're focusing transformation personal beyond Facebook us apps By customers for safe collaborating shift whether allowing and that their we to in as interface, expanding help calls. run our kinds continue to single effectiveness. privacy making customers customers new tools process, minimize increasingly we're easier we the away. to The of So phone technologies information and make API to Messenger is isn't relevant a online of show

the continue to hard teams to I'm amazed many connected thrive businesses survive us, people keep As Throughout and be with all online. businesses who ever, brilliant working really people all this grateful work by been period, world. and have our we've so lucky to I over and to the help

Now, to Dave. over

Dave Wehner

good afternoon, the and Sheryl, continued world. to in the reach results delivered of around services quarter, Thanks, second strong millions our help as everyone. businesses customers We

approximately that a Let's our billion billion approximately on metrics. estimate a begin one least June least used community basis daily at people one with on X.X monthly of used X.X We in services our that basis. at people and

grow, MAUs quarter second reached billion, X% or growth user continue year. active million of year. up billion X.X last to X.XX elevated XX% represented the Facebook in monthly compared community in or XXX approximately to last the X% June. last global daily to DAUs of Our million even compared lapped by XXX grew pandemic. users as we to year the active related users

revenue QX a basis, advertising up billion, total all total quarter. lower. We or are basis, or remains year-over-year with QX XX% comparisons on from a its and the noted. macroeconomic last billion, revenue growth constant financials; remained have The strong. XX% a foreign constant ad for currency a $XX.X on been million the otherwise tailwind rates XX% year, XX% have XX% total currency revenue $XX.X revenue from to would was to basis. of was on unless a decelerated benefited exchange basis. QX constant up currency two-year $XXX in first environment very Turning QX XX% On online

goods. that in by commerce the consumer As verticals well as packaged growth largely performed have was noted, and such pandemic, the advertising Sheryl the revenue during driven online

during across strongest growth was and broad-based second of be served the On and especially pricing depressed are we hit entertainment effects we impressions grew average the saw user increased as a strength tailwinds. and the XX%. period. developing services the markets, the media. primarily slower of in X accelerated year. ad Europe, hardest growth the increased pandemic, pandemic to revenue of growth as demand. pandemic. quarter Asia sales, sales geography in Recall such ad we period lap Pacific the This the of the Europe, XX% a of revenue contributed prices, benefited addition, second now and to Other our Asia impressions basis, QX, growth Pacific, travel, in was strongest $XXX XXXX, that million, we by currency is Impression growth advertiser the X% of were by improved rate which continues per and in seasonally In quarter second elevated of that driven XX%, quarter entered was and Canada from world quarter last the in which XX%, was rest revenue in world trends rest the price in year, XX%. driven up growth benefited by as lapping. and verticals Other slowed number though particularly last In Asia-Pacific ad all challenged Quest a while the US Growth all total XX%, respectively. of at from regions

X adjustment returns We from Quest related also interface facial recorded revenue a to the for recall.

expenses; year. to XX% $XX.X total last compared billion, now Turning were expenses to QX up

core and cost to XX%, In hiring increased Marketing products sales and increased marketing hardware consumer driven mainly XX% terms primarily efforts. and partners support increased items, by consumer spend. infrastructure by hiring investments. R&D payments core to revenue of the of cost specific XX% hardware driven our driven and by line

ended and up year. to the mostly in increased expenses full-time last with net hires We new XX,XXX driven functions. XX% We over expenses. added X,XXX over by Lastly, XX% quarter legal employees, costs employee-related QX, primarily compared G&A technical in

representing XX% income billion, operating Second margin. a quarter operating $XX.X was

We cash with billion including our stock Net servers, by ended was cash $XX.X expenditures, marketable leases, was data income infrastructure in tax $X.X network billion. share. or in Class we $X.X $X.XX was $XX.X $X.X per repurchased XX%. were A Capital centers, in facilities. billion office Our the capital investments second quarter, billion the securities. billion and Free quarter rate flow driven of and common and

In terms on second zero our remain reach objectives. our of chain XXXX. Report, we Annual which net sustainability value we In for our our efforts, achieving focused goal Sustainability details our entire emissions to our June, released in work towards achieving

Turning we year-over-year during now increasingly total second the quarter the that XXXX. a significantly increases expect periods to rest decelerate Similar will in growth. growth rates basis, decelerate rates revenue to of a to from driven two-year on lapping outlook. year-over-year expect to quarters growth price and over XXXX, primarily growth fourth to revenue growth compared total second revenue as the year we basis, we advertising the lap the second quarter, be viewing two advertising strong modestly In year third by exclude the of the rate. the recovery, When half impacts we sequential on COVID to expect of

in expect to the increasing regulatory have updates, quarter. platform more the changes, expect to iOS which to third compared the from quarter continue significant We targeting ad headwinds second impact in recent notably a and we XXXX

operations. calls, we earnings in transatlantic potential transfers noted recent regarding to monitor developments impact data our the continue European of and viability As on their

The total consumer primarily and outlook. be range growth from product in technical the prior $XX year-over-year billion, XXXX hardware-related talent, and expect investments by in expenses unchanged costs. $XX expenses we to expenses; our in to is billion infrastructure to driven now Turning of

a Our product growth our we expense opportunities commitment across reflects outlook long-term our see invest portfolio. off compelling to ahead

of $XX capital XXXX to from unchanged prior range $XX estimate. be billion, the to expect our expenditures in billion We

Our data capital network in infrastructure facilities. our and by investments primarily are expenditures office driven centers, servers,

the our services closing, of our innovating XXXX open rate With and use questions. remain who businesses In teens. behalf high pleased business tax call committed [ph], and to We be our are world. the strong let's on France expect in the we up to people around of with the the for that, full-year performance

Operator

from ahead, Our Instructions] the Brian Stanley. you. sir. line Please go Thank [Operator Morgan is first with of Nowak question

Brian Nowak

questions. taking I for my Thanks have two.

Talk make lot of be company next a with opportunity then really years? first I the the for execution of take economy, this reach and need now. sort of this shopping over the creator one going secondly few all there's one Facebook year efforts. platforms thought, Mark, the Instagram larger a to algorithm And And words to you've on of over for key different where been and your on us at overcome a and to sort shopping attacking this areas creator comments meaningful intend sort two you about, sort And content are The meaningful. of platform? economy. more to what Thanks. wild you the really or to about a to bring tonight way it's little some your bit for understand to the Maybe just exclusive help us compete better really creators of shopping

Mark Zuckerberg

Sure.

tail we we're funnel whole we strategy businesses on, things funnel that, it's both the be with each long commerce shops point of need to that is from main which other messaging increasingly to that making partnerships, that before that's from available and web those building do I business those. tools, we at really different think up of to keep its tools, it and and companies world-class But whether for time so meaningful business discovery way the we ads down a think with do thing or just is services. our functionality do other order the expect want that that take ads that to it and come so I to mind all take on on shops particularly the our scale. that to ads that that through in be I make long On that world-class overall, there I with to anything going the the to is ourselves. we're all layer to going In probably of the means working and work this commerce, own, can is to think across large that e-commerce sure the already basically

this every of starting just going just take to are engage we whether just natively, business that creating think do business, think pretty Facebook a in when that in is So, these or to already one, people the strategy to business are meaningful an coming near people. meaningful or or at, scale our that better that we're But to payment it's on who for driver ad effective experience the it's compound to and information with we're for a terms improvements of a shops, in years. you When go I right using, personalized. better or click be you're doesn't product have a just merchants in There become website you it's or your compounding the that term, while Instagram much whatever WhatsApp think you're to then of going profitability the number of expect and seeing isn't going the shouldn't numbers. terms this the over meaningful meaningful how I realistically, ads using be the But I quarter expect of we this to are. and is in a

guess mean, of want quickly here, I path if are things a you're One your here on a focused second right I this all compounding properties number in be and creator there a that economy. and are to to the this. the to as on interesting question we're get content trying you're and can. for think you're are out there trying of on is as platforms. living, the you we're I different of make on couple these that that are this. creator focused there companies So I'd a yes, different we say

a versus on advantage are one of We long that we an to better like other case not think content we we'll over to make we have the not be what content here them people creators help win do, if can we think that on platforms, term, fundamentally but living another and that than necessarily place. we're have their that creators from lot a over is, going So it's it's do I just make want trying so to to the have platform that another. and best it

tools, the bring advantage are table. monetization I that Our we to pretty think, a big

more to already I of ability it's table. advertising those is something be we to the the work that really tools to should money so able Our think set creators they're that basically from the help world-class, bring make doing,

lot of be to ability connect in also and people interested their distribution are a an people the recommendations communities to help content. people find going for who personalize We have to their help with

mean I that think So, across be what Reels the we think of long-term of I that able make now. are and going with of important especially doing. think lot going platforms it just why across like, Watch increasingly creators to about some platforms, our both are we're to are systems and our millions we're creators there's the content the going I that we're think and long excited so that, becomes I living is seeing more a to that's that if be important, set healthy breadth on as what a to work over make And seeing term, of is about a able to video

Dave Wehner

ahead the question. can next and And take France, we go

Operator

from Post Our is with Justin ahead. Bank of next America. question go Please

Justin Post

Maybe for one and Thanks question. Mark. for Great. my taking for one Dave

where kind in the from you affecting US on year do you're go all today, were DAUs, how meta-universe. reopenings Mark, and appreciate levels backed and here? penetration you for they QX How of then And commentary on where could Europe. feel really the about First are last activity

kind Maybe to up build around second, job I see oculus. maybe I what's we first, are level? XX% private. a that. companies of kind It looks AR, VR? openings the appreciate some around business very on think with on of high what of could expenses like in And disclosures thoughts the model

you like Thank the I how -- already you. started. thinking might wondering investments was be if it So looks about around that? able us updates giving to you're

Dave Wehner

Yes. Thanks, Justin.

in we in a especially where the like bounce given kind On of seeing to slowness, are saw impacted quarter, have obviously, front, sort by we with of of penetration that And noticeable the when to COVID, North expect are Europe, and high markets around our levels seasonal of we penetrated softness, say as of we're restrictions in in of those market. COVID-related given sort might levels do I'd well North then we penetration, quarter significantly as in seeing being how trends ease, combination Delta, going America, level MAU in from some of to America point. And we on and play but you it to Europe. out this read cycle, can hard how the at kind it's DAU that's that's give larger predict DAU this we high trend, that's best other of see I

Mark Zuckerberg

Sure. metaverse on primarily And the we're points, focused here. on

our social scale, as Before is model, are products company that to you playbook build especially to important want to interact people get get the there. into It's basic who products. I business the with a

parts that of be overall, to of the So having ads building we into part turn strategy use there the that focus big we metaverse embark too. we meaningful media of are will this of a important the it social on the part are what part and is I hundreds be and platforms being do a think the business. and -- people we're as continue to really of this going important I what before going on across probably new But millions the of chapter, next metaverse we an expect and very to

experience a place going I think one to just creators focused digital able themselves lot of is commerce our which goods, going through reasons are I expressing But through through in is we're they this of experience on goods and to with apps their terms current the going to important, that current digital to avatars, one place, the them be they people of increasingly metaverse another. the we're why right, is economy. be be huge, across the have, -- and why to clothing, think to teleport digital around bring being from from that apps

like term, and next and you virtual So investment reality I expect to now us make. economy primarily have focus to develop from to there's and these helping of where platforms should a able who number really is on our I and experience for who be next the very going be that's basically But bring develop place for. grow focus to -- on in goods that's to and that's the augmented people can of we're metaverse your to can people to them and period. that people a think digital inventory And being big be experiences place helping big the what number for going digital be computing your think shooting going the over community, And long the the if in to around this.

many possible. Our to isn't business to or around trying as anything a large devices our going like because model at primarily is around serving be people as that sell premium mission

we So, we everything make want do that as possible. as affordable to

the it people the many compound as it. economy as size and possible then inside So digital into of get can

thinking we're job focus, in as to where but investing. at note called kind all a and I the comments our that's a I'm out So the the cleverness at of This happy about to see appreciate to as that can level ingenuity more this, just and about that big looking Dave descriptions this high how I is my beginning. the I to talk will And I'm of and to continue disclosures speak investments. we evolve about expenses that, and

Dave Wehner

perspective, for focus big a outlook. focus I called expense allocation repeatedly major us our is in Yes. a mean relates overall our area from driver capital out our as we've and investments And on to investment Justin, FRL it in a and obviously, that growth, is innovation,

expect have we dollars we this invest billions of in and annually, the mentioned foreseeable area future. that for So we're to investing

needs As done. of is big make haven't But granularity is on there progress a be towards but computing this lot it we focus, more building next provided any hard work a that we to platform, it.

ahead to please. go the Okay. go question, next and France [ph], you can

Operator

with JP Anmuth go is Our from Please question ahead your with next question. Morgan. Doug

Douglas Anmuth

the going Thanks Dave. go for two I'm questions. for to

slower Just Is just going growth think ATT comment prices early and you from surfaces changed year? the should seeing of first with that at all about beyond ad the your curious three year. that months here how all? of on the on then we for mitigation create what else the over impression be And driver forward? And anything view on to comps last do could some Thanks. has the inventory then mix And there expanding there? if you secondly, more just efforts if you're your at and thinking past

Dave Wehner

Yes. Sure, Doug.

at quarter called we for we and COVID a lapping that engagement bigger of of saw factors of lockdowns the remainder driving the impression it. factor there higher growth, terms time, be would was we The related saw are is particularly In XXXX last in mentioned out North that pricing expect that growth pronounced to we'd And where more America, that few last impression engagement the driver a biggest to for growth. year.

is that of one the factors. So big

towards The per in other engagement factor things that's products for that lower that News is other shift And than impressions a the big amount both we're seeing Feed. the to of a our have and trend tends like a just video generally products. and market

within marketplace one ad a growth I we've new Instagram the services like So opportunities. factor you that of both COVID think when more inventory, available are expanding from would We've and opportunity. those And to think Reels then how got on globally I about Reels. begun create would is the forward, impression really factors, seen look services, only say number kind of we're Explore growing ads a when that but things impression I out. We've significant future video, just really is contributions to we broadly make call

kind of and and to good Feed when like things but compared these there absolute So, big we size different all look for lot small services, They're of you of Stories, are opportunities. growth opportunities at think growth. a still

ATT. on question your of terms In

learning generally our for been advertisers challenging look, navigate ATT like help make we opportunities works it from That get the measurement. overall, us. others valuable. rank that's them from conversions of think a learning our are, advertisers our management So strong as through But same been API, has has environment we've advertising. approaches using improve with on is and And in get for we're in AI that can there expectation. solutions continue very work very really more AI help to make the ads this targeting ads changes of creates And macro But areas like and We're benefiting to events navigate, them these to and obviously them line impact to for more we with capabilities ads for and if aggregated for to aggregated great. effective. do to changes. to lot investments them and them do through to data a the we're and working introduced machine machine Obviously, the for fewer doing help value ads, from which more number are

go we France Okay. to next the can question? [ph],

Operator

go next Mahaney is Evercore Please ahead. Mark question from Our ISI. with

Mark Mahaney

a building Dave and for auction-based which how know on Two please. that's had done investors reason a as used at investments, take less some a your outcomes associated in Back priced the swing much there should that about out expense you've with question concerned be metaverse it know to marketers. the Okay. lot. We because you an that optimal for or is questions, marketers expect? metaverse a came address rise, on given on Thanks system, that X of then it's there ROI up I crude pricing, year that? in are ballpark billion with the whether their of maybe to we anywhere And the but rise would platform? material create past out just to close be the numbers own extent to that I will impact issue. any prices be the about

Dave Wehner

Mark, with Sure, Justin's hit question. certainly and I earlier this Yes.

breakout specific significant investment categorized We a it's is what number billions. haven't given FRL, so it on and in we're we've investing obviously billions, is a your

have is any with inclusive Sheryl, well. beyond to that, the ROI, metaverse. making then across we're would some of you And FRL, color the to give that just pricing certainly specificity and So be And efforts not on able on consistent might say obviously that it's significant a But don't it is I billions. we get. that saying But more investment. all of as

a Hang Sheryl. on second. muted You're

Sheryl Sandberg

the On Sorry. an data people the and the and then is of paying, can see pricing to measure they're appropriately. that ROI, beauty results prices able they're auction

get good people continue system system that our find It good think think We're targeted for seeing what news prices been within who system to advertisers rising the that our are and they're advertisers system doesn't are some rising, pressure and good this more we're a I they to even but the in them. very the more effectively. for in where them. seeing that the most get overall, seeing more relevant are the people more be I can compete well. ads able relevant issue an that's the Once specific, better within is that's pressure are system ad mean if serves And As well, work prices brand within serves the good us the always using ads. small and the that And who personalized, the doing, is forward. time, the seeing bias because almost that's is auction same, most returning for aren't option you an is you, actually importantly, large really saying going spend find personalization for to consumers people incentivized certainly formats. the at makes it And in

Mark Mahaney

you. thank Okay,

Dave Wehner

Great. France question. go we [ph], can the next to

Operator

Please with from Our Youssef next Squali ahead. is question Truist. go

Youssef Squali

Great, thank questions, please. you. Two

many, embrace many, to building up that parties, to listening around need seems communal within the gardens many this is just build First of back that the particularly you, of to metaverse build? your maybe you need for because kind that thinking, a versus walled blocks many other basically this. how to going of to side hardware open need the is some future it much Mark, to more like maybe would vision, this control maybe even thing I'm pieces people,

brand? ads Facebook, wondering but to some you pulled had back, installed board I of how you maybe XX.X versus on to to maybe then the really And they kind from was speak the back go that can look on Sheryl, of DR several or DR general, on targeting quarter ATT. particular, not you. that? I marketers throughout like maybe ad just maybe, of formats at wondering the if want iOS the because Thank but Dave in heard we Just impact app across

Mark Zuckerberg

I to of this companies from. and going be can be macro to start able that off benefit ride with to overall lot the metaverse going a a question. is I do wave think are that

pretty So a going phones think of that compounding lot be become a interact that be in certain that be that devices help then on continue improving deliver a a the we and the where certain videos content, what way chips for we or kind gets because mean, graphics a platform. a to time, industry of want social increasingly increasingly other to important are accounting in when make devices to devices. helping in to sure big will going building are graphics whether in augmented we're the people that decade, that to But on the we of we're line next and that I graphically that develop to I intense, we in for that platforms each direction are that I of going companies would sense the and help over program the sure very the say still to that means chips certain are going make investing computers hardware certainly into, those side, feature a that building long to prioritizing reality going of socialize, the that us push on it like intending the but be think that lot of deepest with people sensors of certainly is vision that development get I have but sure and important to with can a not are like And using thing presence overall. virtual that want building lot and are a to these companies that's kind in to those really is to

needs point winners one be that, and So going think The builds I is a going whole to be this going do of alone, nothing it to ecosystem to I company a think lot is that is to making I a this that big be is develop. going overall, was they're I but to that space. think be

want that investments be lot we deliver the the key need able to technology to in parts that the make to. certainly we foundational we're of a making to So

Dave Wehner

on off start I don't in why to and it, if can that. Sheryl wants add add any she Youssef, then and color, jump

and see Facebook continues So growth and in across both solid well brand. and took in be ads to came lot sub-brand obviously We're to terms spend rebound so the well to primary and we pandemic brand driver bigger good the market let DR-centric with there. in both of the of back response but well. consistent a bulk did and nice that business of in continuing DR seeing big doing hit platform still really a of quite than a is a all DR. pullback basis, those commerce, continue performance strongly saw see do But to on growth, the verticals are this a quarter, direct direct response see continued brand our brand, on others Direct response and we back performing of year-ago more highly the categories during like brand

Sheryl Sandberg

measurement our I'll increasingly distinction add the thing direct less and use response large have traditional, different that do brand learning ads advertising brand that The tools. are our very use only time a is and DR different brand advertisers done to less for and long formats is increasingly

about, So largest I even advertiser to the than as brand the advertisers. the that categories people more used it's buy are thinking think our of

effective and becoming traditionally be I considered proficient would what think DR increasingly advertising. are in many them of

Dave Wehner

you can the to next question, ahead [ph], go France go and please.

Operator

with next is ahead. Barclays. Ross Please go Our from question Sandler

Ross Sandler

I on for Dave. a question one the just topic. Hey, or Mark guess, follow-up economy creator

this pays or billion to so the on dollar YouTube $X.XX every So creator, about year. $XX

how Facebook change what's know today, maybe So I model postings Dave, you the and on this getting are guess, by area? by but in other the winning might to directly I not that view financial that guys folks paid are influencers as on Facebook.

offset like other might So Thanks lot. new on is I like and Feeds Instagram? world, or new to creator News then are engagement? lower going just at looking the including on it everywhere, And the the to that is Reels proliferate guess be the like a likely we surfaces in margins higher content things

Dave Wehner

I can take Ross, that. Yes.

more it's pay opposed question definition specific already of lot mean, well. we a as creative a as think broadly I to individual creators. industry out like to YouTube the I

outlook. talking pay is Mark billion a about So licensing $X the the fair do long amount it's in commitment significant that had is obviously there we're that, instance, something but structure, that of payments is what music make there we to to outlined. that with for cost of front, creators we above we beyond on we've This our and part something

to change I helping France platform, the business don't and outlook, it think to that is our So it's go or next a a continue you committed communities advertising. in but meaningful go model vibrant we the can build businesses and just have something [ph], to question, people Thanks. with on please. ahead like we're

Operator

is from Mark with Our AllianceBernstein. next ahead. Please question Shmulik go

Mark Shmulik

or taking A for couple Dave. questions. Thanks for my Yes. Sheryl

around any on Reels of selling around you. that the there engagement, with share to now a on conversion advertising the ad, Thank ads video million on And platform? are kind any you effectiveness first traction of The noticeable in upgrade of stories video or kind effectiveness specifically X.X the of Facebook, differences shop, of those or color and their of rates? cycle secondly, talk can the type learnings ad a on or lot of

Sheryl Sandberg

I can about ads. Reels start talking by

We that to Our and to we a really other can take but you It's second parallel those XX process opportunities to Reels is It's pretty take format seeing. Stories, now early, me in ads It's live. products. we all and with and up it's a And some between discovery of pretty been, that we then similar fit our and great screen as we about, products out where lot think potential. And think almost ad roll I want advertisers available seconds. Reels. we're well. has Reels right the we're videos We markets a effectiveness format a what as consumer Do businesses in find to question? it's really so that. surface, of engagement seeing that's the have and I still talked hold has think natural we're full pleased

Dave Wehner

can take way, want. it I if Either Sheryl, you

Sheryl Sandberg

Yes.

Dave Wehner

Yes.

obviously good the that question, rates advertising on So very partners. for sure making are focused second on and we've got conversion our we're ads effective, our Mark,

about the best. what this for in whichever Mark we're of and talked the call optimized experiences making is units QX part is sure that So doing the there converting ad

you've allows to our shops making get just own store, on store web then that So got better better shop if or also a us more your converting a or Facebook is and and converting effective. Instagram is that at better

And and the shops so more and for to continue own effective. to we want do best what's our online also make advertiser our

France and share specific the but no numbers shops make we better. next there, go to And to work we're [ph], So go to convert to continuing can ahead please. question, our

Operator

Our ahead. Please go Brent next Jefferies. is with question from Thill

Brent Thill

modest Do granularity like helpful? extremely looks modest to just the more are what There can would it mean more Dave, or decel two-year X points more you. stack. questions. add you a your that X you deceleration be Thanks. X, of lot to or or Thank is decel investor any X to

Dave Wehner

on from the number We QX the from it. modest specific we and didn't question. go and a haven't on ahead France to XX%, We expect a to Brent. half specific year, Thanks, that. deceleration And guidance but put we you the deceleration provide second to can next QX of saw XX% in [ph], obviously go

Operator

Our Blackledge Please from John is next Cowen. question with go ahead.

John Blackledge

questions. Two thanks. Great,

better versus Are half your On in plus Facebook OpEx, than the this the And rates at at XX% changes, guide, opt-in second on the Instagram? they XX% and of midpoint or expectations color any then the in point? line, for half. iOS on first growth worse

OpEx color the of year? in of half you. growth on the drivers accelerating Thank back key the any Just

Dave Wehner

John. Thanks, Yes.

expectations with on opt-in in very really like On line iOS the changes, rates. much things

overall line with expectations. in So impact I our has would say been the

with in to not not out back consumer impact and or rolled areas fully We're of then less So will half there. those we're those marketing. changes, see the terms have yes, in XXXX, surprise a expense the of accelerating guide, we the fully in that going QX expect rolled out. And but do huge OpEx like more being growth of

non-headcount to in accelerate spend, expect the back half the the of year. we of some related So

on the the that's [ph], And to we next go front. please. expectation that So France can question,

Operator

Sebastian Our next go question from Colin ahead. is with Please Baird.

Colin Sebastian

of questions, level Refresh. a FX afternoon, higher Great, couple really of coming thanks. Good Maybe everyone. out

is First is just to this in off, new through And you. activity that? terms how opening then heard wonder and apps a can functionality moving faster with kind learning a in to you companies, advantage and I'm table product talk of your competitive about this of if the integration in of machine like what you of adding is APIs messaging for if across seemingly stakes advanced AI curious still the things view? like Thank now development you of based family PyTorch most for important messaging incrementally business of platform contributing Mark, the apps I more messaging? FX, And is and significant how on product

Mark Zuckerberg

Sure. I can those. take of both

going that's vision in with to be they service on helping these. move and So in need core increasingly to going People metaverse. future experiences in communication people able commerce for is a it's that care on important to The what that to people as -- an have going to people important I be is it messaging we're to cross-dock messaging about, that being business think that move going a of to able going very interact think to business wherever natural working of are, this fits the I be easily matter to and people of between are communicate, are people services businesses continue cross-dock way reach be part we way they are reach much of they between towards messaging, terms them, communication this the into them. lot teleport to between we the mean, people want of messaging is a the people of no terms I helping APIs. kind

aligned future, to interoperability experiences of moving So when with talk more we're about kind I today our the trying and as that get core well. there in

naturally of the if is The messaging is one that are is even quite connect of a messaging doing that quickly lot not and And for the parts for we're the today if charging to surfaces business businesses, towards because rather not people than a part ads more and to growing the that other end thing businesses well. messaging pay side. the convert helping on have so that's that to or sales going control between ad point business up is click directly that of ads APIs to we business may other may the want businesses to experience, the worst that is their messaging interactions drive and on and be better that

probably these calls, of side, of question, doesn't as I good it progress this probably mean On that on driver as come is a is a important something much for it's for in results. up the should really overall our AI AI earnings how the

is different that's we've investment product, outperformed observed the the of out One and like AI regulation the of we've that AI, done has then the which we from running basically, progress on of things other years our AI a build of that is a or it's is of product single on don't that AI. I last areas platform, have yet. couple there's kind focus whether But or all our that embodiment But lot we routinely over used. products something not just the expectations work, in And and this face, different one I've a things. all may business sort platforms an headwinds of the but we of of very large that's think

maybe it So when just makes sound foundational our more across probably we and Reels that news is economy broadly. be lot and integrity do that made like whole get horizon, better, at Facebook of is seeing. this more the at levels the just doesn't writing can stuff, is everything one with really that the I important a been to But feed way ads makes this I specific the and ranking technologically, that progress make and that are improvements, progress our effective soon. we're identifying the effects I better what thing, macro whole and tailwinds on don't think one fundamental detection it it and the seem the across this even AI been of think of that's and systems a And from we've just of is driving big I think or been going see that down is slowing is anytime really this a industry

it use specifically, AI develop certainly communities. that is our work that PyTorch we framework embraced the mean, helps one by that's to the For I

a to So open have time we already source an easy. a there it, been project library new is that lot spin team that up to when that is some makes and of go contributed it

PyTorch to think that it's going developed researchers in. that help area standard, we're I an investing increasing are to get dividends develop become having an especially more So is or there and from among focus we certainly on that certainly

part think I that seeing is core just the AI the that of an platform overall. progress we're important

Dave Wehner

I time have France think last And for one [ph], we question.

Operator

from Very good. the Then question our Michael go will Nathanson. Moffett be with Please line last of Nathanson ahead.

Michael Nathanson

Great, it. but Dave. now seeing Sheryl we're thanks. past you one question, in for asked I've Sheryl, for this One the and

weakness real a TV as YouTube. been TV has in there Avon going post-pandemic, are to dollars to like And look So impressions. in

What may include for bit And the do your So talk dollars? the who or impact know bit, video it early used aggregated content can of Dave, I creators sports? you I expand has you talk on the days? event maybe a Doug's a question, premium the signal in grab measurement? some TV opportunity things following mean on like learnings Thanks. it's from vision then from you, about they definition can spending up you for your have those to seek and been about or loss, how early, video ROI

Sheryl Sandberg

talk I about video ads. can So

strong still we're versus lot But very lower we getting monetization seeing in is continually but at have here. video. better video stories, think and Watch, feed monetizing at a monetizing growth we're we across Reels, rates Feed, So there

the is doing We example, advertisers very share place show Walmart, And to their our And and ads host stream who shopping used videos to is we event. home across the first favorably larger and engaged was a Pioneer Walmart very its launch month. shopping event best then brand at fashion personal a drive Ree event have and in mobile I'll reengage a recent first ad cooking live to even they better line of products, the X resulted watching billion ads are viewers board. to a engagement increasing, live really video. exclusive for awareness of and after of Drummond, people host reach advertiser I for results think live a Woman and eligible board. of advertisers the meaning cool with to the and had across getting video great looking a part we are first ran purchase, think they lot mix and certainly, as Mobile per compare in audiences, video that thousands sales. people really of They engagements --

opportunity ads putting that's a think use it the of on of combined platform, like people taking all example I products so, our with combined and And video an good our with live, together for in ways. video

with think, compete favorably like very formats will TV. other I

Dave Wehner

share, management And of but mean API that question. the have with specific the to work we're part the doing don't broader of we're rebuild doing is work second to Michael, contextually, I our aggregated meaningful just events elements that I I'll data ad tech. the take

to to with part important really of going that's talking AI, perform future. work learning our about well, was can machine make less data. that in it use to to and the be data system some continue able access And being So Mark the into less having dovetails an better of that because of

have so, or And to having efficacy the to AI again, ML be why we access and important ads. with of going future maintaining Facebook and the to the and that growing is capabilities so

disruptive with we're making to broadly, pleased also learning advertisers process have think how to of the to through go I It for So we're retool. progress this. is the on

So I advertisers. is lessen to on our this don't impact the want having

a we're as them, it help challenging is effectively trying to and it think I can. for we work through period as them

with I done. are we So that, think

hope safe. So thank today, the call for us everybody on everybody, joining stays and you,

Operator

joining you Thank concludes this us. call. for today's conference And

lines. now You your may disconnect