The company’s results hint at a revival, with a positive ads outlook and a growing user base, though its metaverse division continues to lose billions.
Meta has managed to reverse a downward spiral for the first quarter of 2023, with its first revenue increase in four quarters and a steady outlook for the year.
The company‘s revenue was $28.6bn for the first quarter of 2023, an increase of 3pc.
The positive result saw Meta’s stock grow by roughly 9pc in off-hours trading after the earnings were reported, The Wall Street Journal reports.
In February, Meta founder and CEO Mark Zuckerberg hailed 2023 as the “year of efficiency” and said the company would focus on becoming “a stronger and more nimble organisation”.
But the company appears to still be in the process of making this a reality, as its costs and expenses grew by 10pc to $21.4bn this quarter. This included charges of roughly $1.14bn related to its recent restructuring efforts.
In March, Meta announced plans to cut 10,000 jobs across its organisation, in addition to the job cuts Meta announced in November that affected 11,000 employees.
Metaverse costs on the rise
Meta has also reported a rise in users across its family of apps – Facebook, WhatsApp and Instagram – with both its daily and monthly active users rising by 5pc this quarter compared to the same period last year.
The company’s advertising business is also showing positive signs, as the number of ad impressions grew by 26pc across its apps. Meta said the average price per ad has dropped by 17pc in the same period.
The company faced some controversy in its ad sector recently however, as a glitch caused significant disruptions for advertising campaigns on Facebook, with some customers claiming they were significantly overcharged.
Meanwhile, Meta’s Reality Labs division – which handles its metaverse ambitions – continues to be a significant cost for the company. In the latest quarter, this division’s revenue fell by more than 50pc, while the income loss was $3.99bn for Meta.
Despite this, Zuckerberg said the quarter was good as its community “continues to grow”, while he expects strong results thanks to Meta‘s efficiency focus.
“Our AI work is driving good results across our apps and business,” Zuckerberg said. “We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision.”
Samsung’s profits plunge
Meanwhile, Samsung has confirmed earlier estimates that its earnings are in freefall, as its profits have plunged significantly this year.
The company’s consolidated revenue fell by 10pc, while its operating profit was around 640bn won, a decrease of around 95pc.
Samsung has attributed the loss to a weak demand in its memory chip business, along with a decline in utilisation rates in its foundry business and “continued weak demand and inventory adjustments from customers”.
The company said it expects a “gradual market recovery” and demand rebound in the second half of 2023.
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Meta headquarters sign. Image: hermitvoita via Flickr (CC BY-NC 2.0)