Meta Platforms Inc. not only reported revenue and Earnings per Share that bettered analyst expectations for the June quarter, but also issued a better-than-expected guidance for the current quarter, reflecting a rebound in the digital advertising market.
Here's what the results look like:
Revenue growth of 11 percent crossed double digits for the first time after the December quarter of 2021. This was also the first time in a year that Meta reported revenue growth during the quarter as the company grappled with a slowing economy and Apple's iOS privacy changes, which limited their ad targeting capabilities.
For the current quarter, Meta expects revenue of $32 billion to $34.5 billion, which is well above estimates of $31.3 billion. This suggests a growth of nearly 15 percent year-on-year at the lower end of the guidance.
“We had a good quarter,” Meta CEO Mark Zuckerberg said in a statement. “We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall.”
Investments in artificial intelligence, as well as the company’s virtual reality efforts, have continued to be expensive, despite the efficiency mandate. Meta said total expenses will be $88 billion to $91 billion in 2023, more than prior projections.
The Reality Labs division, which is in charge of realizing Zuckerberg’s vision for the metaverse, will have “meaningfully” greater losses this year than it did last year, the company said, citing the costs of product development and growing the technology.
Total headcount declined 14 percent year over year to 71,469, with the company adding that “approximately half of the employees impacted by the 2023 layoffs are included in our reported headcount as of June 30, 2023.”
Instagram recently introduced a competitor to Twitter, called Threads. In the first few days after launch, Threads soared to 100 million users, though has since struggled to get all those users to return, according to estimates from web analytics firm Similarweb.
Analysts believe that Threads could generate about $8 billion in annual revenue over the next two years and reach close to 200 million daily active users. However, Threads is currently ad-free.
Shares of Meta gained nearly 7 percent in after-hours trading to cross the $300 per share mark. The stock has gained nearly 2.5 times on a year-to-date basis.
(With Inputs From Agencies.)
First Published: Jul 27, 2023 5:55 AM IST
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