Internal ByteDance report: revenue grew nearly 80% YoY to $61.7B in 2021 but operating losses more than tripled YoY from $2.14B to $7.15B due to growth spending
Wall Street Journal Salvador Rodriguez
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Discussion
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@protagorasto
Annanth Aravinthan
on x
@borrowed_ideas This is mostly a function of cohort maturity. Most of Bytedance's users are new, so the COA is front loaded to today. If they held Opex and grew revenue, they'd start catching up to FB and printing cash.
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@ghadjia
George Hadjia
on x
The strategy of spending heavily to build the content flywheel/audience and then subsequently advertiser interest has been working but is obviously quite dangerous when you think about the fickle nature of social media users.
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@hkanji
Hussein Kanji
on x
This no longer looks like such a hot business https://www.wsj.com/...
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@borrowed_ideas
@borrowed_ideas
on x
To say it differently, ByteDance and $META spent similar in opex in 2021 but META generated ~2x the revenue. Zuck probably wishes he could take “private market approach in public markets” 😆
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@ghadjia
George Hadjia
on x
Presumably part of this reflects the heavy cost of compute to train algos (TT's core advantage). What's also fascinating is that BD lost $7bn in FY21. I'd love to know the $ quantum of incentives being paid to advertisers, content creators, as well as for UA.
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@borrowed_ideas
@borrowed_ideas
on x
@ProtagorasTO This is consolidated financials, and my guess is standalone US operations financials is probably much worse. Tbh I did not expect the consolidated financials to be in this shape.
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@protagorasto
Annanth Aravinthan
on x
@borrowed_ideas Not super surprising, they've invested a ton in inorganic growth (previously Snap's largest ad buyer?) and have a lot of science projects. Though I think my original pont still drives a lot of it; Douyin started in 2016 vs. FB in 2004, recent cohorts still not pay…
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@ballmatthew
Matthew Ball
on x
Q1 2022 Revenue & Profit (per @alexheath): Meta: $27.9B and +$8.5B ByteDance: $18.3 and ($4.7B) https://www.theverge.com/...
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@ghadjia
George Hadjia
on x
Big implications here re the nature of TT's disruption. It's come at a VERY heavy $ cost to ByteDance. The GM of 56% for ByteDance at a $62bn revenue scale is woeful vs. low-80s% GM for META at similar rev. scale. https://www.wsj.com/...