Good afternoon. My name is France, 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. This call will be recorded. We thank you very much. Ms. Deborah Crawford, Facebook's Vice President of Investor Relations, you may begin.

Thank you. Good afternoon, and welcome to Facebook's second quarter earnings conference call. Joining me today to discuss our results are Mark Zuckerberg, CEO; Sheryl Sandberg, COO; and Dave Wehner, CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's press release and in our quarterly report on Form 10-Q filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The press release and an accompanying investor presentation are available on our website at investor.fb.com. And now, I'd like to turn the call over to Mark.

Hi everyone, thanks for joining us today. This was a good quarter for our product and business. There are now more than 3.5 billion people who actively use one or more of our services, and I'm excited about our product roadmap ahead. I want to start today by discussing some of the themes that we're seeing and our major efforts around creators, commerce, and the next computing platform. Each of these areas is important and it's going to unlock a lot of value on its own, but we're also building blocks for the future of the Internet and the future vision for our company and I'll discuss that as well. So first, let's talk about creators. We want our platforms to be the best place for millions of creators to earn a living. If we can do this within our services, we'll also have the best content across many different types of media, from text and photos to audio, gaming, and video. Video, in particular, is becoming the primary way that people use our products and express themselves. Now I know this is a theme that we've been talking about for a few years now, but we've been executing on this for a while, and video has steadily become more important in our product. Video now accounts for almost half of all time spent on Facebook, and Reels is already the largest contributor to engagement growth on Instagram. Across all forms of video, short-form video like Reels is growing especially quickly. We're very focused on making it easy for anyone to create video and then for those videos to be viewed across all of our different services, starting with Facebook and Instagram first. People like to watch videos recommended by our personalized algorithm, so this gives creators a good way to reach new people who don't follow them yet, and this is also a good complement to our social feeds. It's an area where our progress in AI is going to make the experience a lot better in the coming months and years. On-demand video like in Facebook Watch is also growing quickly and is now growing faster than other types of video or content in News Feed. We're building a number of new video monetization tools for creators that can get compensated for making great content. For example, last year, people spent more than $50 million on stars to game stream creators going live on Facebook alone. And now we're extending stars to any creator doing on-demand video as well. I just want to call out live video for a moment. This is a smaller percent of our overall video on our services, but it's some of the most unique content and gives creators a way to build community and engage with their followers. We're also focused on developing monetization tools like live breaks, mid-row ads, and live shopping, so creators can make a living and engage their communities more deeply in commerce with their content. So overall, there is a lot more to do here. And as it becomes the majority of engagement across our services in the coming years, we're going to continue to focus on them. We're also focused on other types of creators beyond video and some of the most interesting emergent behavior that we're seeing is creators using a lot of different types of content to engage their communities. We launched live audio rooms this quarter, as well as podcasts. We also launched Bulletin, our publishing and subscription service for writers with features now can find and grow their audiences, including integrations with groups, Facebook Live, and live audio rooms. To help grow the creator economy overall, we're going to keep our creator tools free to use through 2023, and we recently announced that we are investing $1 billion in creators across Facebook and Instagram. So I'm optimistic that creators will get more opportunities to do the work that they want and that's going to lead to people hearing lots of new voices across our different services. The second area that I want to talk about today is commerce. Our goal here is to create better experiences for people interacting with businesses and to help businesses grow even more on our platform. Our approach is to work our way down the stack and build world-class services at every layer of commerce, starting from discovery at the top of the stack, all the way down to payments. Just like we want to be the best place for millions of creators to make a living, we also want to be the best place for businesses to grow as well. We started here by building world-class ads tools to help businesses reach potential customers and help people discover new products and services that they might like, but what we found is that when these ads link off-site, you often land on a webpage that's not personalized or not optimized or where you have to re-enter your payment information, and that's not a good experience for people. Our next phase is focused on building out shops, marketplace, business messaging, and WhatsApp and Messenger to create more native commerce experiences across our apps. This is going to lead to more businesses investing in building out their presences across our services, and that will lead to even more diversity of products for people to discover and interact with. This is a long-term strategy. It's going to take a while before it's meaningful, especially given the scale of our ads business already, but I'm confident that it's the right long-term bet in product direction. As we work our way down the stack from discovery and ads to native commerce storefront, we're also making progress on payments at the same time. WhatsApp payments are now available to everyone in Brazil, as well as India. Lots of people are using this as a simple and secure way to send money to friends. We're adding new payments features in Messenger in the U.S. like QR codes. We also just announced that we're making Facebook Pay available outside of our apps for the first time, which means that you're going to start seeing it as a checkout option on the web and especially in web views that you see within our apps after clicking on ads or other business content. The commerce experiences are now accessible across most of our services, and we have a full roadmap of deeper integrations that I'm excited about in the months ahead. The third area I want to talk about is building the next computing platform. We're continuing to invest heavily in building technology and product to deliver a full sense of presence. This is going to be critical for unlocking the next generation of social internet services. Quest 2 continues doing well and it keeps getting better monthly as we release regular software updates, including most recently our pass-through APIs so developers can start building mixed reality experiences on Quest. The range and content and experiences that we're seeing keeps broadening as well to the point where there are a lot of popular virtual reality experiences beyond games at this point. The most popular apps on Quest are social, which fits our original thesis that virtual reality will be a social platform, and that's why we're still focused on building it. We're also seeing compelling use cases in other forms of entertainment as well as work, creativity, and fitness. Looking ahead, the next product release will be the launch of our first smart glasses from Ray-Ban in partnership with EssilorLuxottica. The glasses have their iconic form factor, and they let you do some pretty neat things. So I'm excited to get these in people’s hands and to continue to make progress on the journey towards full augmented reality glasses in the future. Now, the areas that I've discussed today, creators, commerce, and the next computing platform, they're each important priorities for us and they each can unlock a lot of value on their own. But together, these efforts are also part of a much larger goal to help build the metaverse. And I'll be sharing a lot more about this in the months ahead, so I want to discuss now as you can see the future that we're working towards and how our major initiatives across the company are going to map to that. What is the metaverse? It's a virtual environment where we can be present with people in digital spaces. You can think about this as an embodied Internet that you're inside of rather than just looking at. We believe that this is going to be the successor to the mobile Internet. You'll be able to access the metaverse from all different devices and different levels of fidelity from apps on phones and PCs to immersive virtual and augmented reality devices. Within the metaverse, you can build, hang out, play games with friends, work, create, and more. You're basically going to be able to do everything that you can on the Internet today, as well as some things that don't make sense on the Internet today, like dancing. The defining quality of the metaverse is presence, which is this feeling that you're really there with another person or in another place. Creation, avatars, and digital objects are going to be central to how we express ourselves, and this is going to lead to entirely new experiences and economic opportunities. Overall, I think this is one of the most exciting projects that we're going to get to work on in our lifetime, but it could take a lot of work and no one company is going to be able to build this all by themselves. I've learned over the last five years that we can't just focus on building great experiences. We also need to help build an ecosystem so millions of other people can participate in the upside and opportunity of what we're all creating. They'll need new protocols and standards, new devices, new chips, new software from rendering engines to payment systems and everything in between. We believe that the metaverse must be built in a way that is open for everyone to participate. I expect this is going to create a lot of value for many companies up and down the stack, but it's also going to require a significant investment over many years. My focus here is a continuation of our work to build technology that brings people together. In many ways, the metaverse is the ultimate expression of social technology. Some of the experiences that I've dreamed of building since well before I started Facebook are only starting to become possible now. If you look at the investments that we've made over the years, you can see this vision gradually starting to come into focus, and it's easy to see why we're excited about it. So, in addition to being the next generation of the Internet, the metaverse is also going to be the next chapter for us as a company. In the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company. There's a lot that we do to get there, and there will be many exciting milestones along the way, including some, which we'll share in the months ahead. But in the meantime, I just want to take a moment to thank everyone in our community, all of our partners and employees, and everyone who has supported us so far. I continue to be grateful to be on this journey with all of you. And now, here is Sheryl.

Hi everyone, thanks, Mark. I hope you're all safe and healthy. This was a strong quarter for our business. Our total revenue for Q2 was $29.1 billion, which is a 56% year-over-year increase. We've seen strong growth in all regions and across most verticals. Our strongest verticals are those that have performed well throughout the pandemic, including e-commerce, retail, and consumer packaged goods. We're also seeing continued recovery in others like travel that were hit hard by COVID. Our performance continues to be driven by the ongoing digital transformation, which has accelerated during the pandemic and our long-term investments in tools and products to help businesses make the shift online. Not long ago, it was much harder and more expensive for businesses to create a digital presence, take orders online, and reach customers remotely. Our tools and products make these things easier and more accessible. Businesses and creators can set up pages, profiles, and chats on Facebook and Instagram. They can engage with customers directly in groups or through Messenger and WhatsApp. They can tell their stories in creative ways with Reels, Stories, or by going live on Facebook and Instagram. With personalized ads, they can easily reach the people most likely to be interested in their products or services for just a few dollars. This has helped so many businesses, especially small businesses, find success when reaching people in person has been much harder. A great example is the Pizza Cupcake, a family-owned baking business in New York City. They've been selling at pop-up shops since 2018, but when COVID hit, pop-up locations shut down, and catering events were canceled. In March last year, they became an e-commerce business. In Q3 they tested their first Facebook ad campaigns in the New York Tri-State area and by the following quarter ramped up their budget to sell across 28 states. They've since made three new hires and plan to start shipping nationwide this year. They've expanded production, which has also led to jobs being created at fulfillment centers in Maryland, Florida, Arizona, and California. We're constantly working to improve the effectiveness of our ad products to help businesses like the Pizza Cupcake reach customers and create a great return on their investment. We're doing this through our investments in machine learning and monetization of new surfaces like Stories and Reels. In all of this, we're planning for the long term. Mark talked about some key elements of our strategy going forward, so I'll focus on the strategy for the ads business. If you think about the journey we've been on over the past decade or so, we started with desktop ads on the right-hand side of people's feeds, then consumers shifted to mobile, and we put ads in News Feed. Then quarter after quarter, year after year, as we've created great new consumer products like Stories and Reels, we found the right way for advertisers to reach consumers within these products. We're constantly working to make our ads deliver more for businesses and be more relevant for people. To support the growth of our ads business over the next 10 years, it's going to take a similar effort. We need to build on our success by developing innovative new products and discovery experiences while giving everyone more control over their personal information. To build the next era of personalized experiences, we're focused on product innovations in four areas. The first is discovery. We want to keep making our apps the best places to discover products and businesses you'll love. For example, we're testing a new experience in News Feed where you can tap to browse content from businesses on topics like beauty, fitness, or clothing, reducing context to make smarter recommendations about which ads to show. The second area is commerce, which Mark touched on a moment ago. We're building a modern commerce system across ads, community tools, messaging, shops, and payments. It's all about creating a personalized seamless customer journey, where it's easier to discover a product, buy it, pay for it, and have it delivered to your doorstep. The third area is privacy-enhancing technologies. We know businesses are experiencing challenges because of platform changes. We want to make sure they can continue getting great results through privacy-safe personalized ads long into the future. We're collaborating across the industry to develop new technologies to help minimize the amount of personal information we process while still allowing us to show relevant ads and measure their effectiveness. The fourth area is building tools to help businesses beyond marketing. We want to help solve all kinds of business needs, whether it's customer relationship management, business messaging tools, or hiring through Facebook Jobs. We're helping people run their business across our apps easily with Facebook Business Suite. We're making it easier to message customers across our apps from a single interface, and we're expanding our Messenger API for Instagram as customers increasingly rely on messaging instead of phone calls. The digital transformation is a long-term trend that isn't going away. By focusing on innovation in these four areas, we will continue to help businesses of all sizes make the shift online and reach customers with privacy-safe personalized advertising. I'm grateful to all the businesses that work with us, and I continue to be amazed by our teams all over the world. Throughout this period, we've been lucky to have so many brilliant people working hard to keep people connected and help businesses survive and thrive online. Now, over to Dave.

Thanks, Sheryl, and good afternoon, everyone. We delivered strong results in the second quarter, as our services continued to help millions of businesses reach customers around the world. Let's begin with our community metrics. We estimate that approximately 2.8 billion people used at least one of our services on a daily basis in June and that approximately 3.5 billion people used at least one on a monthly basis. Our global community continues to grow, even as we lapped elevated user growth in the second quarter of last year related to the pandemic. Facebook daily active users reached 1.91 billion, up 7% or 123 million compared to last year. DAUs represented approximately 66% of the 2.9 billion monthly active users in June. MAUs grew by 194 million or 7% compared to last year. Turning to the financials; all comparisons are on a year-over-year basis, unless otherwise noted. Q2 total revenue was $29.1 billion, up 56% or 50% on a constant currency basis. We benefited from a currency tailwind; had its foreign exchange rates remained constant with Q2 last year, total revenue would have been $982 million lower. On a two-year basis, Q2 total revenue growth decelerated to 72% from 74% in the first quarter. Q2 ad revenue was $28.6 billion, up 56% or 51% on a constant currency basis. The macroeconomic environment for online advertising remains very strong. As Sheryl noted, the growth in advertising revenue was largely driven by verticals that have performed well during the pandemic, such as online commerce and consumer packaged goods. We also saw improved growth trends in verticals that were particularly challenged during the pandemic, such as travel, entertainment, and media. On a user geography basis, ad revenue growth accelerated in all regions as we lap the strongest quarter of last year, which was a period hardest hit by the pandemic. Growth was strongest in the rest of the world at 86%, Europe, Asia-Pacific, and the U.S. and Canada grew 63%, 56%, and 48%, respectively. Europe, Asia-Pacific, and the rest of the world all benefited from currency tailwinds. In Q2, the total number of ad impressions served across our services increased 6%, and the average price per ad increased 47%. Impression growth was primarily driven by developing markets, especially in Asia-Pacific, while pricing growth benefited from broad-based strength in advertiser demand. Recall that in Q2 2020, the effects of the pandemic contributed to elevated impressions and depressed prices, which we are now lapping. Other revenue was $497 million, up 36%. Other revenue growth continues to be driven by Quest 2 sales, though the rate of growth slowed in the second quarter as we entered a seasonally slower sales period. We also recorded a revenue adjustment for returns related to the Quest 2 from facial interface recall. Turning now to expenses; Q2 total expenses were $16.7 billion, up 31% compared to last year. In terms of specific line items, the cost of revenue increased 41% driven by consumer hardware costs, payments to partners, and core infrastructure investments. R&D increased 37% driven primarily by hiring to support our core products and consumer hardware efforts. Marketing and sales increased 15%, mainly driven by hiring and marketing spend. Lastly, G&A expenses increased 23% driven mostly by employee-related costs and legal expenses. We added over 2,700 net new hires in Q2, primarily in technical functions. We ended the quarter with over 63,400 full-time employees, up 21% compared to last year. Second quarter operating income was $12.4 billion, representing a 43% operating margin. Our tax rate was 17%. Net income was $10.4 billion or $3.61 per share. Capital expenditures, including capital leases, were $4.7 billion driven by investments in data centers, servers, network infrastructure, and office facilities. Free cash flow was $8.5 billion. We repurchased $7.1 billion of our Class A common stock in the second quarter, and we ended the quarter with $64.1 billion in cash and marketable securities. In terms of our sustainability efforts, we remain focused on achieving our goal to reach net zero emissions for our entire value chain in 2030. In June, we released our second Annual Sustainability Report, which details our work towards achieving our objectives. Turning now to the outlook. Similar to the second quarter, we expect that advertising revenue growth will be primarily driven by year-over-year advertising price increases during the rest of 2021. In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth. When viewing growth on a two-year basis, to exclude the impacts from lapping the COVID recovery, we expect year over two-year total revenue growth rates to decelerate modestly in the second half compared to the second quarter rate. We continue to expect increasing ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a more significant impact in the third quarter compared to the second quarter. As noted in recent earnings calls, we continue to monitor developments regarding the viability of transatlantic data transfers and their potential impact on our European operations. Turning now to expenses; we expect 2021 total expenses to be in the range of $70 billion to $73 billion, unchanged from our prior outlook. The year-over-year growth in expenses is driven primarily by investments in technical and product talent, infrastructure, and consumer hardware-related costs. Our expense outlook reflects our commitment to invest ahead of compelling long-term growth opportunities we see across our product portfolio. We expect 2021 capital expenditures to be in the range of $19 billion to $21 billion, unchanged from our prior estimate. Our capital expenditures are driven primarily by our investments in data centers, servers, network infrastructure, and office facilities. We expect our full-year 2021 tax rate to be in the high teens. In closing, we are pleased with the strong performance of our business and remain committed to innovating on behalf of the people and businesses who use our services around the world. With that, let's open up the call for questions.

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

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

Sure. I think I can probably take both of those. On commerce, I think the main thing to keep in mind is just the ads business is so large that it's going to take a long time before anything we do with commerce is going to be particularly meaningful at scale. Overall, the strategy is really to work our way down the funnel from discovery and all the things that we're already world-class at with ads to making it so that those ads increasingly point to shops across our different services. In order to do that, each layer of the funnel that we're working on, we want to be world-class on its own, which means that there's a whole long tail of functionality that businesses have come to expect on the web and from other tools that we need to make sure that's available for shops and business messaging and all the tools, whether we do that through partnerships with other e-commerce companies or building it ourselves. We're seeing meaningful improvements every quarter in this in terms of how effective these are. There are already a pretty meaningful number of merchants and people using shops, and we expect this to compound over the coming years. But I just think in terms of the scale of the ads business that we're starting at, realistically, we shouldn't expect that this is going to be a meaningful driver of our business or profitability in the near term; it's just going to take a while for that compounding to become meaningful numbers. I think the strategy is the right one, it's creating a better product experience for people. When you click on an ad or when you engage with the business, it's just going to be much better to do that natively, whether you're in Instagram, Facebook, WhatsApp, or whatever you're using, than go to a website that doesn't have your payment information and isn't personalized. So I think we're on the right path here, and we're focused on compounding this as quickly as we can. I guess for the second question on the creator economy. Yes, there are a number of different companies focused on this. I'd say there are a couple of interesting properties here. If you're a creator and you're trying to get your content out there and you're trying to make a living, you want to be on all these different platforms. I think a lot of what we're trying to do is, it's not necessarily the case that people are going to be on one platform versus another. We just want to make it so that creators have their best content here and that we can help them make a living better than other platforms. We think that if we do, we'll have an advantage on content over the long term, but it's not like we fundamentally have to win creators over from another place. Our monetization tools, I think, are a pretty big advantage that we bring to the table. Our advertising is world-class, so the ability to basically help creators make more money from the work that they're already doing, I think, is something that we should bring to the table. We also have a lot of distribution and an ability for people to find their communities and help personalize recommendations to connect people with the people who are going to be interested in their content. I think if we're able to make it so that millions of creators can make a living across our platforms, that's just going to lead to a long-term breadth and healthy set of content across the systems that I think is going to be increasingly important, especially as video becomes more prominent on our platforms like, what we're seeing with Watch and Reels now.

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

Thank you for taking my question. I have two for Dave and Mark. First, regarding DAUs, you're kind of back to where you were in Q1 last year for the U.S. and Europe. How do you feel about the impact of re-openings on activity and penetration levels today, and where do you see them going from here? Mark, I appreciate all the insights on the metaverse. Some companies may develop in private, and I value your thoughts on that. First, what is the high-level business model? Secondly, what kind of disclosures can we expect regarding expenses for AR and VR? It seems that up to 20% of job openings are related to Oculus, so I was curious if you could share how you're planning to provide updates on that. Thank you.

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

Sure. On the metaverse points, we're primarily focused on here. Before I get into the business model, our basic playbook as a company is to build products that you scale, especially social products. It's important that the people you want to interact with are there. We are going to focus on having hundreds of millions of people use the metaverse and the new platforms that we're building before we really turn this into what I expect to be a very important and big part of the business. Overall, ads are going to continue being an important part of the strategy across the social media parts of what we do, and it will probably be a meaningful part of the metaverse too. I think commerce is going to be increasingly important, which is why we're focused on this across our current apps and the current economy. Digital goods and creators are just going to be huge, right? In terms of people expressing themselves through their avatars, through digital clothing, through digital goods, the apps that they have, that they bring with them from place to place. A lot of the metaverse experience is going to be around being able to teleport from one experience to another. Our focus for now is really on helping to develop the community, helping to develop the number of people who can grow the number of people who can be in these metaverse experiences and can experience the next computing platforms like virtual and augmented reality, and that's what you should expect us to focus on for the next period. But over the long term, I think there's going to be a very big digital economy around this, and that's where we're primarily going to be shooting for. Our business model isn't going to primarily be around trying to sell devices at a large premium or anything like that because our mission is around serving as many people as possible. We want to make everything we do as affordable as possible so that as many people as possible can get into it and then compound the size of the digital economy inside it. So that's at a high level how I'm thinking about this, and I'm happy to talk about this more as we continue to evolve the investments. Dave can speak about the expenses and disclosures and all that, but I will note that I appreciate the ingenuity of looking at our job descriptions to see where we're investing. This is a big focus, as I called out in my comments at the beginning.

Yes. And Justin, from a capital allocation perspective, our overall focus is on growth. We've repeatedly stated that as it relates to our investments in innovation, FRL is a big focus area for us and a major investment driver in our expense outlook. We've mentioned that we're investing billions of dollars annually, and we expect to invest in this area for the foreseeable future. As we progress toward building this next computing platform, there's a lot of hard work that needs to be done. But it is a big focus; we haven't provided any more granularity on it. France, you can go ahead and go to the next question.

Thanks for the questions. I'm going to go two for Dave. Just first on the mix of slower impression growth and then with prices being the driver here for the year. Is there anything else that we should be thinking about beyond the comps from last year? And how do you think that expanding surfaces to create more ad inventory going forward?

Yes. Sure, Doug. In terms of impression growth, we'd called out last quarter that we would expect for the remainder of 2021 for pricing to be a bigger driver of growth. Along with that, there are a few factors driving it. The biggest factor is lapping the COVID engagement that we saw that was pronounced in North America. So that is one of the big factors. The other factor we’re seeing is a shift towards video both for our products and other products, which tends to lead to lower impressions per engagement than News Feed. Those factors are drivers, but the COVID factor is the one I would call out. In terms of expanding services, we think there are significant growth opportunities, and we're seeing growing impression contributions from new services, like Instagram Explore, video, and Marketplace, specifically Reels being a significant future opportunity.

Great, thanks. Two questions. On iOS changes, any color on the opt-in rates for Facebook and Instagram? Are they in line, better, or worse than your expectations at this point? And then on OpEx, at the midpoint of the guide, plus 39% growth in the second half versus 28% first half. Just any color on key drivers of the accelerating OpEx growth in the back half of the year?

Yes, thanks, John. On the iOS changes, we're very much in line with expectations on opt-in rates. So I would say overall the impact has been in line with our expectations. We're not fully rolled out with those changes yet, but Q3 will have the impact fully. In terms of the OpEx guide, we expect accelerating expense growth in the back half of 2021, especially in consumer marketing and some non-headcount related spending regarding that.

Great, thanks. Good afternoon, everyone. Maybe a couple of higher-level questions, really coming out of F8 Refresh. First off, can you talk about the integration of messaging across the family of apps and how the opening of messaging APIs is adding functionality to apps and if this is contributing incrementally to more business activity through messaging? And then with advanced AI and machine learning now seemingly table stakes for most platform companies, Mark, I'm just curious if this is still a significant competitive advantage for you in your view? And based on what you heard of F8, I wonder how important a product like PyTorch is in terms of moving faster in new product development?

Sure. I can take both of those. In terms of messaging, we're working on cross-doc communication and business messaging APIs. This is very much about commerce and helping people interact with businesses naturally. The cross-doc communication fits into this vision we have about the future of people being able to easily move between experiences. On the AI side, progress on AI has routinely outperformed our expectations. We make foundational improvements that enhance ranking better in all of our products. One of the important macro effects that we're seeing is the progress made at these fundamental levels with AI driving a lot of positive results for us.

Great, thanks. One for Sheryl and one for Dave. Sheryl, in the past I've asked you this question, but now we're seeing it. So post-pandemic, there has been weakness in TV impressions. Can you talk about your vision for video and how that may seek opportunity to grab some TV dollars? Do you expand the definition of creators to include premium video content or sports? And then for you, Dave, following up on Doug's question, can you talk about the learnings from your aggregated event measurement? What has been the impact on things like signal loss, ROI, or spending from those who have used it in the early days?

I can talk about video ads. We're seeing strong growth in video monetization across Watch, Feed, and Reels. We're continually getting better at monetizing video. We think advertisers are looking for the best place to reach audiences, and we compare very favorably across the board. A recent example is Walmart engaging Ree Drummond to host a live shopping event; they used a mix of personalized ads to drive awareness to a live event, and they had great results across the board. We think this is a good example of how that combines video ads and the use of live shopping.

I don't have specific data to share regarding aggregated event measurement, but the work we’re doing with the API is part of rebuilding meaningful elements of our ad tech. We want our system to continue to perform well while having access to less data. The accuracy of our modeling remains essential, especially in terms of maintaining and growing efficacy in ads.

Thank you, everyone, for joining us today. We appreciate your participation in our earnings call. Have a great day.