Meta Platforms Inc. (META)

“Our guidance assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth based on current exchange rates.”

“We expect third quarter 2026 total revenue to be in the range of $61 billion to $64 billion.”

“We expect the majority of impacted employees will no longer be captured in our head count by the end of Q3 2026.”

“We soon expect to roll out the model API to more distribution channels, make it available in more countries and open it up for enterprises.”

“First, we are currently and expect to remain demand-constrained in the foreseeable future.”

“First of all, we certainly see further headroom to continue improving recommendations over the rest of the year and into 2027. And we expect that will help us drive additional gains on both engagement on Facebook and Instagram.”

“Absent any changes to our tax landscape, we expect our tax rate for the remaining quarters of 2026 to be between 15% to 17%, an increase from our prior outlook of 13% to 16%.”

“We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $130 billion to $145 billion, narrowed from our prior outlook of $125 billion to $145 billion.”

“We continue to expect to deliver operating income this year that is above 2025 operating income.”

“We now expect full year 2026 total expenses to be in the range of $165 billion to $169 billion.”

“Finally, we believe that overall industry capacity is going to remain tight for the foreseeable future.”

“Therefore, our longer-term capacity strategy aims to give us the flexibility to continue growing compute in 2028 and beyond by laying down data center and network foundations to accommodate future server decisions.”

“Consequently, our current plans are geared towards maximizing 2026 and 2027 capacity.”

“We hit our first research milestone this half by continuously pretraining a large-scale model with recommendations data and observing healthy scaling laws in the process. We're encouraged by this milestone and expect continued progress in the second half of the year.”

“For example, we continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled for this year in the U.S., which may ultimately result in a material loss.”

“We will further expand access to more countries this quarter while adding more capabilities to the AIs.”

“We recently shared internally that we plan to reduce the size of our employee base in May.”

“Our guidance assumes foreign currency is an approximately 2% tailwind to year-over-year total revenue growth based on current exchange rates.”

“We expect second quarter 2026 total revenue to be in the range of $58 to $61 billion.”

“On that note, we are increasing our infrastructure CapEx forecast for this year.”

“Absent any changes to our tax landscape, we expect our tax rate for the remaining quarters of 2026 to be between 13%–16%.”

“This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future-year capacity.”

“We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $125 to $145 billion, increased from our prior range of $120 to $135 billion.”

“We continue to expect to deliver operating income this year that is above 2025 operating income.”

“We expect full year 2026 total expenses to be in the range of $162 to $169 billion, unchanged from our prior outlook.”

“We believe a leaner operating model will allow us to move more quickly while also helping to offset the substantial investments we are making.”

“It overall reflects our expectation for a strong quarter of growth. The range embeds an outlook for accelerated growth, and that's really underpinned by the strong demand that we saw through the end of Q4 and continuing into the start of 2026.”

“I think the numbers make it so that for the next couple of years, ads are going to be by far the important driver of growth in our business.”

“we would expect that currency tailwinds will dissipate later in the year based on current rates.”

“we see a lot of headroom to improve recommendations in 2026, which we expect will drive additional engagement growth on both apps.”

“Absent any changes to our tax landscape, we expect our full-year 2026 tax rate to be 13% to 16%.”

“Despite the meaningful step-up in infrastructure investment, in 2026, we expect to deliver operating income that is above 2025 operating income.”

“Anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $115 to $135 billion with year-over-year growth driven by increased investment to support our Meta Superintelligence Labs efforts and core business.”

“Expect full-year 2026 total expenses to be in the range of $162 to $169 billion.”

“We expect this growth to accelerate through the next half.”

“This year, we will expand the availability of our business AIs to more markets, while also extending their capabilities so they not only answer questions on topics like product availability but can help people get things done right within WhatsApp.”

“On WhatsApp, we expect to complete the rollout of ads and status throughout the year with the level of ads remaining low in the near term while we follow our standard approach of optimizing ad formats and performance before ramping inventory.”

“I expect Reality Labs losses this year to be similar to last year, and this will likely be the peak as we start to gradually reduce our losses going forward while continuing to execute on our vision.”

“we expect there could be some headwinds from our introduction of the revised, less personalized ads offering in the EU that begins rolling out later in Q1.”

“Nonetheless, we will continue to look for opportunities to periodically supplement our strong operating cash flow with prudent amounts of cost-efficient external financing, which may lead us to eventually maintain a positive net debt balance.”

“We're still expecting significant year-over-year growth in AI Glasses revenue in Q4 as we benefit from strong demand for the recent products that we've introduced, but that is more than offset by the headwinds to the Quest headsets.”

“Absent any changes to our tax landscape we expect our fourth quarter 2025 tax rate to be 12% to 15%.”

“We currently expect 2025 capital expenditures, including principal payments on finance leases to be in the range of $70 billion to $72 billion, increased from our prior outlook of $66 billion to $72 billion.”

“We expect full year 2025 total expenses to be in the range of $116 billion to $118 billion, updated from our prior outlook of $114 billion to $118 billion and reflecting a growth rate of 22% to 24% year-over-year.”

“Our outlook reflects an expectation for continued strong ad revenue growth partially offset by lower year-over-year Reality Labs revenue in Q4.”

“Our guidance assumes foreign currency is an approximately 1% tailwind to year-over-year total revenue growth based on current exchange rates.”

“We expect fourth quarter 2025 total revenue to be in the range of $56 billion to $59 billion.”

“Although the transition to the new U.S. tax law resulted in an accounting charge in the third quarter, we continue to expect we will recognize significant cash tax savings for the remainder of the current year and future years under the new law, and this quarter's charge reflects the total expected impact from the transition to the new U.S. tax law.”

“So we're going to have to invest in increasing manufacturing and selling more of those.”

“As we have begun to plan for next year, it's become clear that our compute needs have continued to expand meaningfully, including versus our own expectations last quarter.”

“Threads which recently passed 150 million daily actives and remains on track to become the leader in its category.”

“Going forward, the construction cost of the data center will not be recorded in CapEx as the data center is constructed, we will contribute 20% of the remaining construction costs required, which is in line with our ownership stake, and those will be recorded as other investing cash flows.”

“We are, in fact, at the beginning of our 2026 budgeting process now, and we see a similar list of revenue investments that we're excited to be able to invest in. And so we think that, that's going to be a big part of our ability to continue to drive strong revenue performance throughout the year.”

“Employee compensation costs will be the second largest contributor to growth.”

“We also anticipate total expenses will grow at a significantly faster percentage rate a than 2025, with growth primarily driven by infrastructure costs, including incremental cloud expenses and depreciation.”

“As a result, our current expectation is that CapEx dollar growth will be notably larger in 2026 than 2025.”

“We are still working through our capacity plans for next year, but we expect to invest aggressively to meet these needs, both by building our own infrastructure and contracting with third-party cloud providers.”

“We expect the set of investments we're making within our ads and organic engagement initiatives next year will enable us to continue to deliver strong revenue growth in 2026.”

“We continue to observe performance improvements as we combine models and expect to drive additional gains as we consolidate another 200 models over the coming years into a smaller number of highly capable models.”

“Within WhatsApp status, we're continuing to gradually introduce ads and expect to complete the rollout next year.”

“We generally believe that our strong financial position is going to allow us to support these investments while continuing to repurchase shares as part of the sort of buyback program that offsets equity compensation and as well as provide quarterly cash dividend distributions to our investors.”

“I would expect that we will continue to produce and share leading open source models.”

“While we estimate that the 2025 tax rate will be higher than our Q2 tax rate, we cannot quantify the magnitude at this time.”

“With the enactment of the new U.S. tax law, we anticipate a reduction in our U.S. federal cash tax for the remainder of the current year and future years.”

“While we are not providing an outlook for fourth quarter revenue, we would expect our year-over-year growth rate in the fourth quarter of 2025 to be slower than the third quarter as we lap a period of stronger growth in the fourth quarter of 2024.”

“We're working to ramp supply to better meet consumer demand later this year.”

“We expect to deliver additional improvements throughout the year as we further scale up our models and make recommendations more adaptive to a person's interests within their session.”

“We don't expect that the genAI work is going to be a meaningful driver of revenue this year or next year.”

“While the infrastructure planning process remains highly dynamic, we currently expect another year of similarly significant CapEx dollar growth in 2026 as we continue aggressively pursuing opportunities to bring additional capacity online to meet the needs of our AI efforts and business operations.”

“We expect these factors will result in a 2026 year-over- year expense growth rate that is above the 2025 expense growth rate.”

“Aside from infrastructure, we expect the second largest driver of growth to be employee compensation as we add technical talent in priority areas and recognize a full year of compensation expenses for employees hired throughout 2025.”

“The largest single driver of growth will be infrastructure costs, driven by a sharp acceleration in depreciation expense growth and higher operating costs as we continue to scale up our infrastructure fleet.”

“We also expect that developing leading AI infrastructure will be a core advantage in developing the best AI models and product experiences. So we expect to ramp our investments significantly in 2026 to support that work.”

“We continue to see very compelling returns from our AI capacity investments in our core ads and organic engagement initiatives and expect to continue investing significantly there in 2026.”

“Given this, we do not expect ads and status to be a meaningful contributor to total impressions or revenue growth for the next few years.”

“We expect the introduction of ads and status will be gradual over the course of this year and next, with low levels of expected ad supply initially.”

“We're also building out Hyperion, which will be able to scale up to 5 gigawatts over several years, and we have multiple more titan clusters in development as well.”

“Our Prometheus cluster is coming online next year, and we think it's going to be the world's first gigawatt-plus cluster.”

“This could have a significant negative impact on our European revenue as early as later this quarter.”

“We expect the significant infrastructure footprint we are building will not only help us meet the demands of our business in the near term, but also provide us an advantage in the quality and scale of AI services we can deliver.”

“We don't expect Threads to be a meaningful driver of overall impression or revenue growth in 2025.”

“Based on feedback from the European Commission in connection with the DMA, we expect we will need to make some modifications to our model, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue as early as the third quarter of 2025.”

“Absent any changes to our tax landscape, we expect our full-year 2025 tax rate to be in the range of 12% to 15%.”

“The majority of our CapEx in 2025 will continue to be directed to our core business.”

“We anticipate our full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64 billion to $72 billion, increased from our prior outlook of $60 billion to $65 billion.”

“So to that end, we are accelerating some of our efforts to bring capacity online more quickly this year, as well as some longer-term projects that will give us the flexibility to add capacity in the coming years as well. And that has increased our planned investment for this year.”

“But I expect that we're going to be largely focused on scaling and deepening engagement for at least the next year, before we'll really be ready to start building out the business here.”

“So we certainly expect that 2025 CapEx is going to grow across all three of those components you described. Servers will be the biggest growth driver that remains the largest portion of our overall CapEx budget.”

“This year the improvements of the business are going to be taking the AI methods and applying them to advertising and recommendations and feeds and things like that.”

“We are planning to significantly ramp up deployment of GPUs in 2025, and we'll continue to engage with our vendors and invest in our own silicon to meet those needs.”

“We're expecting total infrastructure spend within each of Gen AI, non-AI and core AI to increase in '25 with the majority of our CapEx directed to our core business.”

“We expect networking spend to grow in ‘25 as we build higher-capacity networks to accommodate the growth in non-AI and core AI-related traffic along with our large Gen AI training clusters.”

“We're anticipating higher data center spend in 2025 to be driven by build-outs of our large training clusters and our higher power density data centers that are entering the core construction phase.”

“We generally expect that we are going to be able to deliver ongoing ad performance improvements through a lot of the ongoing work that we're doing across our monetization road map and that will have the sort of effect of benefiting pricing overall.”

“Absent any changes to our tax landscape, we expect our full-year 2025 tax rate to be in the range of 12% to 15%.”

“We expect CapEx growth in 2025 will be driven by increased investment to support both our generative AI efforts and our core business.”

“We expect employee compensation to be the second-largest factor as we add technical talent in the priority areas that I referenced earlier.”

“We expect the single largest driver of expense growth in 2025 to be infrastructure costs, driven by higher operating expenses and depreciation.”

“While we are not providing a full-year 2025 revenue outlook, we expect the investments we’re making in our core business this year will give us an opportunity to continue delivering strong revenue growth throughout 2025.”

“Looking forward, we expect that the continuous advancements in Llama’s coding capabilities will provide even greater leverage to our engineers, and we are focused on expanding its capabilities to not only assist our engineers in writing and reviewing our code, but also to begin generating code changes to automate tool updates and improve the quality of our code base.”

“We anticipate headcount growth in our business functions will remain relatively limited.”

“In 2025, we expect headcount growth will continue to be primarily driven by technical roles across our priority initiatives within infrastructure, monetization, Reality Labs, generative AI, as well as regulation and compliance.”

“We expect to further ramp adoption of MTIA for these use cases throughout 2025 before extending our custom silicon efforts to training workloads for ranking and recommendations next year.”

“This will deliver savings in annual CapEx and resulting depreciation expense, which is already included in our guidance.”

“Our expectation going forward is that we’ll be able to use both our non-AI and AI servers for a longer period of time before replacing them, which we estimate will be approximately 5.5 years.”

“We expect compute will be central to many of the opportunities we’re pursuing as we advance the capabilities of Llama, drive increased usage of generative AI products and features across our platform, and fuel core ads and organic engagement initiatives.”

“We expect the introduction of ads on Threads will be gradual and don’t anticipate it being a meaningful driver of overall impression or revenue growth in 2025.”

“We see continued opportunities to drive video growth in 2025 through ongoing optimizations to our ranking systems.”

“I expect WhatsApp to continue gaining share and making progress towards becoming the leading messaging platform in the U.S. like it is in a lot of the rest of the world.”

“We're planning to fund all this by at the same time investing aggressively in initiatives that use these AI advances to increase revenue growth.”

“This year my kind of expectation and hope is that we will be at a sufficient scale and have sufficient kind of flywheel of people using it and improvement from that, that this will have a durable advantage.”

“Specifically, as it pertains to monetization, we don't expect Threads to be a meaningful driver of 2025 revenue at this time.”

“Overall, I'd say we're growing our infrastructure investments significantly this year, and we expect significant growth again in 2025.”

“Within generative AI, we expect significantly scaling up our infrastructure capacity now while also prioritizing its fungibility will similarly position as well to respond to how the technology and market develop in the years ahead.”

“In Q3, we introduce changes to our ads ranking and optimization models to take more of the cross-publisher journey into account, which we expect to increase the Meta-attributed conversions that advertisers see in their third-party analytics tools.”

“We anticipate our full year 2024 capital expenditures will be in the range of $38 billion to $40 billion, updated from our prior range of $37 billion to $40 billion.”

“For Reality Labs, we continue to expect 2024 operating losses to increase meaningful year-over-year due to our ongoing product development efforts and investments to further scale our ecosystem.”

“We expect full year 2024 total expenses to be in the range of $96 billion to $98 billion updated from our prior range of $96 billion to $99 billion.”

“And second, our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there too.”

“We don't expect our Gen AI products to be a meaningful driver of revenue in 2024.”

“So while we do expect that we are going to grow CapEx significantly in 2025, we feel like we have a good framework in place in terms of thinking about where the opportunities are and making sure that we have the flexibility to deploy it, as makes the most sense.”

“As we further close that hiring underrun over the course of this year, I do expect that we will end 2024 with in-seat reported headcount that is meaningfully higher than where we ended 2023.”

“Our expectation obviously again, is that we are going to significantly increase our investments in AI infrastructure next year, and we'll give further guidance as appropriate.”

“And generally we expect continued community growth foracross our apps.”

“On Instagram, we expect Reels to continue to drive growth, while on Facebook, we expect to grow overall video time, while increasing the mix of short-form video, which creates more impression growth opportunities.”

“And we expect that all of that will continue to benefit ad spend in Q3.”

“We are continuing to see healthy global advertising demand, and we are also delivering ongoing ad performance improvements just related to all of the investments that we've continued to make over time.”

“And we also expect modestly larger FX headwinds in Q3 based on current rates.”

“We do expect year-over-year growth to slow in Q3, as we are lapping strong growth from China-based advertisers, as well as strong Reels impression growth from a year ago.”

“Absent any changes to our tax landscape, we expect our full year 2024 tax rate to be in the mid-teens.”

“We anticipate our full year 2024 capital expenditures will be in the range of $37 billion to $40 billion, updated from our prior range of $35 billion to $40 billion.”

“we expect infrastructure costs will be a significant driver of expense growth next year.”

“For Reality Labs, we continue to expect 2024 operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and investments to scale our -- to further scale our ecosystem.”

“We expect full year 2024 total expenses to be in the range of $96 billion to $99 billion, unchanged from our prior outlook.”

“We expect to expand these new systems to support more services beyond Facebook video over the course of this year and next year.”

“We expect the relevance of video recommendations will continue to increase as we benefit from unifying video ranking across Facebook and integrating our next-generation recommendation systems.”

“This initiative allows us to bring all video types on Facebook into one viewing experience, which we expect will unlock additional growth opportunities for short-form video, as we increasingly mix shorter videos into the overall base of Facebook video engagement.”

“The amount of compute needed to train Llama 4 will likely be almost 10 times more than what we used to train Llama 3, and future models will continue to grow beyond that.”

“we're already starting to work on Llama 4, which we're aiming to be the most advanced in the industry next year.”

“Demand is still outpacing our ability to build them, but I'm hopeful that we'll be able to meet that demand soon.”

“And we also expect that we will continue to drive ads performance gains and continue to make our ads sort of more effective and deliver increasing value to advertisers.”

“With that said, we expect to see good opportunities to continue growing engagement across our products, driven by the investments we made in AI-based content recommendations, our ongoing video work.”

“So we'll be expanding these tests over the coming months, and we'll continue to take our time here to get it right before we make it more broadly available.”

“I expect that improvements to our underlying foundation models will enhance the quality of the outputs that are generated and support new features on the road map.”

“And over the course of 2024, we expect to further enhance model performance and include support for even more objectives like web and app and ROAS.”

“Absent any changes to our tax landscape, we expect our full year 2024 tax rate to be in the mid-teens.”

“We anticipate our full year 2024 capital expenditures will be in the range of $35 billion to $40 billion, increased from our prior range of $30 billion to $37 billion as we continue to accelerate our infrastructure investments to support our AI road map.”

“For Reality Labs, we continue to expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and our investments to further scale our ecosystem.”

“We expect full year 2024 total expenses to be in the range of $96 million to $99 billion, updated from our prior outlook of $94 million to $99 billion due to higher infrastructure and legal costs.”

“We're seeing growing use of these solutions, and we expect to drive further adoption over the course of the year while applying what we learned to our broader ads investments.”

“And of course, as we ramp these investments, we will also continue to carefully manage headcount and other expense growth throughout the company.”

“But realistically, even with shifting many of our existing resources to focus on AI, we'll still grow our investment envelope meaningfully before we make much revenue from some of these new products.”

“As we develop more advanced and compute-intensive recommendation models and scale capacity for our generative AI training and inference needs, we expect that having sufficient infrastructure capacity will be critical to realizing many of these opportunities. As a result, we expect that we will invest significantly more in infrastructure over the coming years.”

“I recently shared that, by the end of this year, we'll have about 350,000 H100s, and including other GPUs, that will be around 600,000 H100 equivalents of compute.”

“And I would expect that, over the course of this year, we are going to start rolling this out much more prominently across our apps.”

“We're hearing good feedback from the businesses testing them, and we expect to make progress this year as we expand our tests further.”

“And we're -- first of all, I would say that we don't expect our GenAI products to be a meaningful 2024 driver of revenue.”

“And our expectation is, generally, that we will need to invest more to support our AI work in the years ahead, and we're seeing some of that reflected in 2024.”

“And we're planning to bring purchase optimization to click-to-WhatsApp campaigns this year.”

“Absent any changes to U.S. tax law, we expect our full year 2024 tax rate to be in the mid-teens.”

“While we are not providing guidance for years beyond 2024, we expect our ambitious long-term AI research and product development efforts will require growing infrastructure investments beyond this year.”

“We expect growth will be driven by investments in servers, including both AI and non-AI hardware, and data centers as we ramp up construction on sites with our previously announced new data center architecture.”

“Finally, for Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in AR/VR and our investments to further scale our ecosystem.”

“Second, we anticipate growth in payroll expenses as we work down our current hiring underrun and add incremental talent to support priority areas in 2024, which we expect will further shift our workforce composition toward higher-cost technical roles.”

“We also expect to incur higher operating costs from running a larger infrastructure footprint.”

“Given our increased capital investments in recent years, we expect depreciation expenses in 2024 to increase by a larger amount than in 2023.”

“First, we expect higher infrastructure-related costs this year.”

“And given many of our ambitious forward-looking plans will rely on having sufficient compute capacity, we expect this to be an area we invest more aggressively in over the coming years.”

“AI is a growing area of investment for us in 2024 as we hire to support our road map.”

“Paid messaging is growing quickly, and we are focused on broadening adoption in 2024 by making it easier for businesses to buy marketing messages and more easily adopt our Flows product to develop richer in-Thread experiences for consumers.”

“We're delivering continued performance gains from ranking improvements as we adopt larger and more advanced models, and this will remain an ongoing area of investment in 2024.”

“We expect to continue that work going forward, while services with relatively lower levels of monetization like video and messaging will serve as additional growth opportunities.”

“On Threads, we're coming into 2024 with strong product momentum and remain focused on introducing additional valuable features and further scaling the community this year.”

“And a big focus for Facebook this year will be unifying our video experiences and ranking across the app, which should create a more seamless user experience and deliver increasingly relevant video recommendations.”

“In-feed recommendations of posts from accounts you're not connected to also continue to drive incremental engagement as we increasingly personalize recommendations, and we expect to deliver further improvements this year.”

“Our partner, EssilorLuxottica is already planning on making more than we both expected due to high demand.”

“Now our focus for this year is going to be on growing the mobile version of Horizon as well as the VR One.”

“Quest 3 is off to a strong start, and I expect it to continue to be the most popular mixed reality device.”

“But overall, we're playing to win here, and I expect us to continue investing aggressively in this area.”

“Now going forward, we think that training and operating future models will be even more compute-intensive.”

“AI will be our biggest investment area in 2024, both in engineering and compute resources.”

“We do expect that Family of Apps will be a larger source of payroll expense growth than Reality Labs in 2024.”

“And going forward, as I think we said when we introduced the concept of this architecture, we expect it to be more cost efficient for us.”

“Absent any changes to US tax law, we expect our fourth quarter 2023 and full-year 2024 tax rates to be similar to the third quarter of 2023.”

“We expect 2023 capital expenditures to be in the range of $27 billion to $29 billion, updated from our prior estimate of $27 billion to $30 billion.”

“Finally, for Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in AR/VR and our investments to further scale our ecosystem.”

“Second, we anticipate growth in payroll expenses as we work down our current hiring underrun and add incremental talent to support priority areas in 2024, which we expect will continue to shift our workforce composition toward higher-cost technical roles.”

“We also expect to incur higher operating costs from running a larger infrastructure footprint.”

“First, we expect higher infrastructure-related costs next year. Given our increased capital investments in recent years, we expect depreciation expenses in 2024 to increase by a larger amount than in 2023.”

“We expect Reality Labs operating losses to increase year-over-year in 2023.”

“We anticipate that our full-year 2023 total expenses will be in the range of $87 billion to $89 billion, lowered from our prior range of $88 billion to $91 billion.”

“We also expect a step-up in infrastructure-related expense growth next year as we recognize higher depreciation and operating costs from running an expanded infrastructure footprint.”

“Of those areas, we expect AI to be the largest area of increased investment as we further invest in Generative AI across our core products, internal tooling, and research efforts.”

“We have since resumed hiring but expect that much of our hiring that was originally planned for and budgeted in 2023 will occur in 2024.”

“We anticipate this ongoing work will help Reels be a modest tailwind to revenue in 2024 while we continue to strike the right balance between engagement and revenue growth.”

“So making business AIs work for more businesses is going to be an important focus for us into 2024.”

“So we're going to continue deprioritizing a number of non-AI projects across the company to shift people towards working with AI instead.”

“we are planning to continue focusing on operating efficiently going forward, both because it creates a more disciplined and lean culture and also because it provides stability to see our long-term initiatives through in a very volatile world.”

“But having said that, we are also seeing more volatility at the start of the quarter. That's in part why we widened our guidance range to capture that uncertainty.”

“So that means that even though we're going -- even though we're planning to grow headcount at a much slower rate going forward, the actual rate next year may temporarily be faster as we work through this hiring backlog.”

“And then, of course, also our non-AI workloads as we refresh some of our servers and add capacity just to support continued growth across the site.”

“We expect both data center spend to grow in 2024 as we ramp-up construction on sites with the new data center architecture that we announced late last year.”

“Now others in the industry are, of course, working on bringing mixed reality to the market too, but Quest 3 is going to be the first mainstream accessible device that we expect many millions of people will get to experience this technology with.”

“We were pleased to execute our second bond offering in May and expect a measured pace of future debt raises as we work toward improving our overall cost-of-capital, while maintaining a positive or neutral net cash balance.”

“On to tax, absent any changes to US tax law, we expect the tax rate for the rest of the year to be similar to Q2 2023.”

“Looking ahead, while we continue to refine our plans as we progressed throughout the year, we currently expect total capital expenditures to grow in 2024, driven by our investments across both datacenters and servers, particularly in support of our AI work.”

“Finally, for Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in AR, VR, and our investments to further scale our ecosystem.”

“Second, we anticipate growth in payroll expenses as we evolve our workforce composition toward higher cost technical roles.”

“We also expect to incur higher operating costs from running a larger infrastructure footprint.”

“Given our increased capital investments in recent years, we expect depreciation expenses in 2024 to increase by a larger amount than in 2023.”

“First, we expect higher infrastructure-related costs next year.”

“We expect Reality Labs operating losses to increase year-over-year in 2023.”

“This outlook includes approximately $4 billion of restructuring costs related to facilities consolidation charges and severance and other personnel costs.”

“However, we continue to expect time on Reels will monetize at a lower rate than Stories and Feed for the foreseeable future since people scroll more slowly through video content.”

“I expect that we're still going to hire in key areas, but newly budgeted headcount growth is going to be relatively low.”

“We're not sharing a Q4 revenue outlook yet, there are obviously some tailwinds to year-over-year growth in Q4, again, the same point about a weaker compare applies and at current rates FX would be a larger tailwind in Q4 than we're expecting it to be in Q3.”

“The next milestone is that we're gearing up to launch our next-generation consumer virtual and mixed reality device later this year.”

“In May, we're going to carry out our third wave across our business groups.”

“We expect the combination of those things will get us to revenue neutral by end of this year or early next, and positive to revenue beyond that despite that it doesn't monetize as efficiently.”

“We expect we will continue to improve its monetization from current levels.”

“We do expect that we will be recognizing further restructuring charges throughout the year.”

“Again, we expect FX will be a tailwind.”

“Looking forward to Q2 and the back half of the year, it's certainly an easier compare there as there are tailwinds to year-over-year growth coming from lapping a weaker demand period and then moving into the first full quarter in Q2 without Russia revenue in terms of the comparison relative to Q2 2022.”

“To the extent that we spend more on CapEx in the near future, I expect it mostly to be to power this work.”

“We would expect head count growth in excess of 1% to 2% in 2024 as a result as we ramp up those recruiting pipelines.”

“We expect capital expenditures to be in the range of $30 billion to $33 billion, unchanged from our prior estimate.”

“We continue to expect Reality Labs operating losses to increase year-over-year in 2023.”

“We expect the IDPC to issue a decision in May in its previously disclosed inquiry relating to transatlantic data transfers of Facebook EU EEA user data, including a suspension order for such transfers and a fine.”

“We expect to do so through periodically accessing the debt markets to diversify our funding sources while still maintaining a positive or neutral net cash balance over time.”

“As we look forward, I also expect that we will modestly evolve our capital structure over time to improve our overall cost of capital.”

“We continue to expect that Reels will become neutral to overall revenue by end of this year or early next year.”

“As these new models and use cases continue scaling, we're going to need to continue investing in infrastructure, although we'll have a better idea of the trajectory of that investment later in the year once we can gauge usage of some of the new products we'll launch.”

“And then for the rest of the year, I expect us to focus on improving our distributed work model, delivering AI tools to improve productivity and removing unnecessary processes across the company.”

“Those are meaningful but manageable segment of costs. We have been preparing for a long time, and those costs have been factored already into our total expense guidance.”

“Having said that, we are still roughly on track to bring the overall Reels revenue headwind to a neutral place by the end of this year or early next year and we are planning to do that through both improving Reels monetization efficiency and growing incremental engagement from Reels.”

“We know it took us several years to bring the gap close between Stories and Feed Ads. And we expect that this will take longer for Reels.”

“Our intention is still to bring CapEx as a percent of revenue down, but capital intensity in the nearest term is really going to depend, in part, on the revenue outlook and our needs to further build AI capacity for future demand.”

“In terms of longer-run capital intensity, we certainly expect that the lower CapEx outlook will have some incremental benefit to CapEx as a percent of revenue, and that’s still really something that we are focused on over the longer term.”

“We’re still planning to grow AI capacity significantly, and that connects, I think, to a lot of the things that Mark was describing earlier in his question.”

“In Q4, we recorded $4.2 billion of total restructuring costs in connection with all of these efforts and expect there to be some additional costs in 2023 in areas like office facilities impairments as we continue this work.”

“We see opportunities for continued gains in the near and medium-term, with our AI investments powering a lot of this work as we continue to improve ads ranking and enable increased automation for advertisers to make it easier for them to run campaigns and use our systems to optimize their performance.”

“In the nearer term, ramping Reels monetization remains a primary focus.”

“And then after that, we should be able to profitably grow Reels while keeping up with the demand that we see.”

“In terms of the revenue headwind, we are still on track to be roughly neutral by the end of this year or maybe early next year.”

“We may incur additional restructuring charges as we progress further in our efficiency efforts.”

“We think we can build a substantial sized business around paid messaging, which will complement that as well.”

“We do expect this component of our CapEx spend to become more efficient over time and we are actively looking for more efficiencies there.”

“From a monetization perspective, we are still working to close the gap between Reels and Feeds and Stories, but it's going to take time before Reels becomes a tailwind to revenue.”

“And on the cost of revenue side, we expect the growth rate of cost of revenue to accelerate in ‘23 driven by the increased depreciation that we're seeing play through from the big CapEx investments that we've made so far and then as well as from Reality Labs with the launch of the next generation of the consumer Quest headset later next year.”

“As we mentioned, we expect to end 2023 with headcount roughly flat to where we are now.”

“So we expect the slowdown in payroll growth in 2023 will be the result of the slowdown in headcount growth overall.”

“We also expect a little over half of our expense dollar growth in 2023 to come from OpEx, with the rest coming from cost of revenue.”

“We're not going to be facing as significant headwinds next year from the signals point of view as we are now lapping the big changes that were made on the iOS platform. So that's going to also not factor in as strongly in our growth rates next year.”

“An increase in AI capacity is driving substantially all of our capital expenditure growth in 2023.”

“We expect 2022 capital expenditures, including principal payments on finance leases, to be in the range of $32 billion to $33 billion updated from our prior range of $30 billion to $34 billion.”

“These investments, along with revenue headwinds, are contributing to higher capital expenditures as a percentage of revenue in 2022 and 2023 than we expect over the long-term.”

“We believe the additional data center capacity will provide us greater flexibility with the types of servers we purchase and allow us to use them for longer, which we expect to generate greater cost efficiencies over time.”

“We expect these investments to provide us a technology advantage and unlock meaningful improvements across many of our key initiatives, including Feed, Reels and Ads.”

“These investments are driving substantially all of our capital expenditure growth in 2023.”

“We expect the percentage growth rate of 2023 operating expenses to decelerate meaningfully as we curtail non-headcount related expense growth and keep 2023 headcount roughly flat with current levels.”

“We expect the slight majority of our 2023 expense dollar growth to be driven by operating expenses, with the remaining growth coming from cost of revenue.”

“This includes an estimated $900 million in additional charges in Q4 related to consolidating our office facilities footprint that we expect to record in the fourth quarter of 2022.”

“We expect 2022 total expenses to be in the range of $85 billion to $87 billion updated from our prior outlook of $85 billion to $88 billion.”

“More broadly, beyond 2023, we expect to pace Reality Labs investments to ensure that we can achieve our goal of growing overall company operating income.”

“We expect Reality Labs expenses will increase meaningfully again in 2023, with the biggest drivers of that being the launch of the next generation of our consumer Quest headset and hiring that has been done in 2022, but for which we are going to be paying the first full year of salaries next year.”

“Our current surge in CapEx is largely due to building out our AI infrastructure and we would expect CapEx to come down as a percent of revenue over the long-term.”

“So that means that some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year.”

“And if we generate significant engagement and revenue gains, we will continue investing here. And if we don’t, we will pace our spending accordingly.”

“On the hardware front, later this year, we'll release Project Cambria, and the experience here is getting pretty awesome.”

“Absent any changes to U.S. tax law, we expect our full year 2022 tax rate to be above the Q2 rate and in the high teens.”

“However, we anticipate headcount growth will slow throughout the rest of the year due to the reduction in our hiring plans.”

“And we're going to be launching a web version of Horizon that will be accessible on all platforms later this year, which should dramatically increase the number of people who can use Horizon.”

“And we expect these numbers to more than double by the end of next year.”

“But Reels is going to be a similar opportunity, but also it will take time for us to close that gap.”

“On measurement, we've been able to close a good part of the underreporting gap and shared that with advertisers, but the rest of the gap will take us longer to close.”

“I think also, Justin, you asked about sort of the second half, we would expect the growth rate in Q3 to be modestly higher than the Q2 rate since we will be lapping the first full quarter impact of ATT in Q3, but there's obviously a lot of uncertainty baked into our Q2 outlook, and that implies uncertainty in the second half as well.”

“Also beyond ATT, we expect to see additional targeting and measurement headwinds from iOS 15 and other regulatory changes.”

“On the $10 billion impact, we shared our estimated $10 billion impact on ATT last quarter to give a sense of the order of magnitude, and we believe it's still to be that order of magnitude on the expected impact.”

“And I think we'll continue investing more over some period.”

“We do think there is additional capital intensity of the business as we make significant investments in AI and machine learning on top of just additional capacity growth.”

“We expect 2022 capital expenditures, including principal payments on finance leases, to be in the range of $29 billion to $34 billion, unchanged from our prior estimate.”

“We expect 2022 expense growth to be driven primarily by the Family of Apps segment, followed by Reality Labs.”

“We expect this trend to continue in the second quarter and this will likely cause Global MAU to be flat to down sequentially.”

“Later this year, we'll release a higher-end headset, codenamed Project Cambria, which will be more focused on work use cases and eventually replacing your laptop or work setup.”

“We plan to launch a web version of Horizon later this year that will make it easy for people to step into metaverse experiences from a lot more platforms, even without needing a headset.”

“We're focused on growing Reels as a major part of the Discovery Engine vision, and we expect that this expansion in engagement to shift from a short-term headwind to a tailwind at some point.”

“In the near-term, this is a drag on revenue because Reels monetization is less than feed or Stories, but I expect that will improve over time.”

“So that's why I've given the color on past calls that I expect us to be later this decade, right?”

“Over the next year or two, we hope that this drives better recommendations for people, higher returns for advertisers, and increases our revenue growth even in the face of signal loss.”