Evan Spiegel and Mark Zuckerberg Are Pressured to Estimate Israel Impact
Snap CEO Evan Spiegel and Meta (META)’s Mark Zuckerberg were both asked to speak about the Israel-Palestine conflict on their companies’ quarterly earnings calls this week. Among all things, analysts wanted to know how advertising revenue will be affected as the war continues. Rather than answering those questions directly, both CEOs passed them to their financial chiefs. Like many global tech companies, Meta and Snap have offices in Israel.
Zuckerberg was pressured to denounce the initial attack on Israel by Hamas earlier this month, when the European Union and Thierry Breton, the E.U.’s commissioner of the internal market, posted on X that Zuckerberg had 24 hours to respond and comply with E.U. law by removing disinformation about the attack on Meta platforms.
During Meta’s earnings call yesterday (Oct. 25), Bernstein analyst Mark Shmulik described “unfortunate geopolitical activities around the globe” and asked about their potential effect on Meta’s ad business. CFO Susan Li responded that ad spending on Meta platforms will likely be more conservative in the fourth quarter, which is often the case during regional conflicts. According to Li, some key segments like e-commerce and gaming still have strong advertising demand.
“We’ve reflected the latest trends and advertiser reaction that we’ve seen into our Q4 outlook, which we think reflects the greater uncertainty and volatility in the landscape ahead,” Li said.
Meta had a profitable quarter following thousands of layoffs over this year, which was part of Zuckerberg’s plan to turn around from economic headwinds in 2022. The company brought in a quarterly revenue of $34 billion and a net income of $11.6 billion, both beating analyst expectations.
On the earnings call with analysts on Oct. 24, Snap CFO Derek Andersen addressed JP Morgan Chase analyst Doug Anmuth’s question about the company’s October performance in relation to the war in the Middle East. Andersen said some of Snap’s brand campaigns paused spending at first, but many of them have resumed. Though he noted there was a small uptick in campaign pauses more recently.
Andersen expressed Snap’s reluctance to share a formal fourth-quarter guidance related to the conflict with investors. “We’ve realized that war is fundamentally unpredictable, and as a result, it would be imprudent to provide a formal guide in that kind of an environment,” he said.
In the past quarter ended September, Snap’s revenue increased for the first time after two consecutive quarters of decline. The company brought in $1.19 billion in revenue but posted a net loss of $360 million, both beating analyst estimates.