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Mark Zuckerberg said the Facebook parent continues to make ‘steady progress’ in the metaverse as Threads reaches a milestone of 150m monthly active users.
Meta has seen its latest quarterly revenue grow by 27pc compared to last year as its family of apps now has more than 3.2bn daily active people.
In an earnings call yesterday (24 April), founder and CEO Mark Zuckerberg said the Facebook and Instagram parent has had “a good start to the year” as it raked in more than $36.4bn in the quarter ended 31 March. This is compared to the $28.6bn that it made in the same period last year.
Its income nearly doubled at more than $13.8bn compared to last year’s $7.2bn. Meta said that its ad impressions – one of its primary sources of revenue – was up by 20pc year-on-year across its family of apps.
At the same time, its global headcount stood at 69,329 as of last month – a decrease of 10pc from the same period last year. This is due to multiple rounds of layoffs last year as part of Zuckerberg’s restructuring spree to cut costs.
But not all costs have proved beneficial for the company – at least not in the short term. Meta shares fell more than 15pc soon after the earnings call because Zuckerberg said expenses are expected to increase across augmented and virtual reality – where it currently doesn’t make money.
“We anticipate our full-year 2024 capital expenditures will be in the range of $35-40bn, increased from our prior range of $30-37bn as we continue to accelerate our infrastructure investments to support our AI roadmap,” Zuckerberg said.
Meta’s Reality Labs unit – which is responsible for building the metaverse – recorded a $3.85bn operating loss in the first quarter. Just this week, Meta announced it was infusing its Ray-Ban smart glasses with AI and rolling out new functionalities as it makes small but steady progress in AR technology.
“The new version of Meta AI with Llama 3 is another step towards building the world’s leading AI,” Zuckerberg said. “We’re seeing healthy growth across our apps, and we continue making steady progress building the metaverse as well.”
Eyes on AI and Threads
Meta has been making significant investments in AI across the board. Mike Proulx, vice-president and research director at Forrester, said the company is emerging as a “formidable contender” in the open-source LLM (large language model) race.
By embedding Meta AI into its family of apps, Proulx argues, Meta is putting its AI capabilities “front and centre” for its users – effectively “bypassing” the reliance on Google or Bing search while also taking on OpenAI’s ChatGPT.
“There’s no doubt that Meta is all-in on AI but to achieve its vision, the company has to make big investments in infrastructure. Mark Zuckerberg’s ‘heads-up’ was reminiscent of what he once said about the metaverse, and that didn’t exactly go so well,” he explained.
“But this is different than Meta’s metaverse gamble because AI has real and practical use cases now. The question remains whether Meta can contend in the AI race while maintaining a strong financial position. To do this, expect to see more ‘metaverse’ resources diverted from Reality Labs to Meta’s AI initiatives.”
Meta also said in its earnings call that monthly active users for Threads – its social media app that is trying to take on Elon Musk’s X – is now 150m (up from 130m users in February).
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