00:00 Speaker A
The company did have free cash flow, did have positive free cash flow, but it was the lowest since 2022. And they raised the lower end of their CAPEX forecast for this year. They did not give a CAPEX forecast for 2027. By the way, the shares are poised for the their 11th straight down session, which I don’t think has ever happened. That’s the longest losing streak that we’ve seen like that from Meta ever.
00:23 Speaker B
The call was very much just, I feel like nothing of substance really came of it. The Q&A session was very much, hey, so what’s going on here? You know, like, what are you what are you doing when it comes to the data center side of things? Are you are you going to be renting these out? Are you leasing them? What’s the thinking there? And it was still, you know, I think that’s the question that a lot of people have because, oh, well, then there’s an obvious revenue source short term, maybe.
00:54 Speaker B
you know, they may decide to rent it out and then not hold on to that. But it was so unclear as to what the thinking was. You know, uh, he had discussed this Mark Zuckerberg and essentially said, well, well, if we need it, we’ll use it, but if we we can get, you know, some good revenue out of it, we’ll do that too. And it was like, well, this is what? That’s that’s what everyone, you said this already. You talked to Bloomberg, you’ve been talking about this for the past few quarters. You said at the investor day.
01:23 Speaker B
Where’s what what is Are you doing it or you’re not doing it? Right, right. You know, get off the pot or or not.
01:28 Speaker B
Meta doesn’t have that business where they can monetize this easily through, you know, sales to customers like Google can do, like Microsoft can do, like Amazon can do. They have to rely on the advertising element and how this boosts advertising or gets people to you know, stay on. So I think, you know, they’re obviously leaning more into the enterprise side. They’re talking about, you know, the API sales and then potentially selling some kind of enterprise package. Microsoft, that makes sense. Google, that makes sense. Amazon, that makes sense.
01:58 Speaker B
Where where is that then make sense in the long term for Meta? In the short term, the models, they make sense if they can, you know, build that up. Sure, the API sales, that’s big. But where does this when does this become larger?
2:10 Speaker C
And I think the problem is we’re losing sight of what is going on in the underlying business. You know, user growth is stronger there. It’s 3.7 billion daily active users, 2 billion on Instagram alone, and engagement is increasing. It is working for them. Ads, you know, advertising dollars are strong. You know, and they have a history, except for the Metaverse, you know, of really of strong execution of making investments.
2:40 Speaker C
As Dan mentioned, there’s a number of things in the pipeline that they are doing, whether it’s the subscriptions, um, that they’re packaging, which would be interesting to see that will be I think incremental. You’re going to have, um, thegenic use. You’ve got as Dan mentioned the enterprise, they’re just getting into that. So I think there’s a lot to come here. And I think, you know, if the stock continues to sell off for the next day or two, it’s going to be a buying opportunity because you mentioned that stock has been down every day in a row, but let’s not forget the strength of their basic business.
