Meta reported a profit of $7.8 billion on $32 billion in
revenue during the recently ended quarter, as the number of people using
Facebook monthly rose to 3.03 billion.
"We had a good quarter," Meta chief executive Mark
Zuckerberg said in an earnings call.
"We continue to see strong engagement across our apps
and we have the most exciting roadmap I've seen in a while..."
Meta had suffered a rough 2022 amid a souring economic climate,
which forced advertisers to cut back on spending, and Apple's data privacy
changes, which allowed users to block ad targeting, the pillar of Meta's
business.
But like the other big US tech companies, Meta's share price
has had a stellar 2023 that Zuckerberg in January said would be the "year
of efficiency".
"With two straight quarters of positive revenue growth
and the first quarter of double-digit revenue growth since late 2021, Meta's
year of efficiency is off to a strong start," said Insider Intelligence
analyst Debra Aho Williamson.
"There's a lot to feel good about when it comes to Meta
right now," Williamson added.
Meta shares were up more than seven percent $320.32 in
after-market trades.
In its earnings release, the company said that the number of
ads on its various applications rose by 34 percent year-on-year in the second
quarter.
Analysts noted the greater interest from advertisers in
Reels, the video format copied from TikTok, and a less gloomy economic context
conducive to marketing spending.
Meta is seeing "good progress" in bringing in
money from Reels, with the video snippets played more than 200 billion times
daily across Facebook and Instagram, Zuckerberg said.
Meta's vow of austerity on spending brought an unprecedented
round of cost-cutting that has seen the company lay off tens of thousands of
workers since last November.
Meta said it had 71,469 employees at the end of June, a
decrease of 14 percent from the same time a year earlier.
The company has faced criticism over its gamble on the
metaverse, the world of virtual reality that Meta believes will be the next
frontier online and led it to change its name from Facebook in 2021.
This to date has proved to be a bad bet with customers so
far unenthused by the technology, even though Apple will enter the space
sometime next year with the release of its expensive VisionPro headset.
Zuckerberg referred to the lackluster rate at which people
are embracing the metaverse as a "somewhat sobering signal" but he
remained confident it is a computing platform of the future.
The metaverse and AI remain priorities at Meta, according to
Zuckerberg.
Meta said in the earnings report that it expects its
operating losses at the unit responsible for VR to "increase
meaningfully" in the year ahead.
The company has also jumped to take advantage of the chaos
at Twitter, which has now been renamed to X.
Earlier this month Meta rushed out the release of Threads, a
text-only app that saw more than 100 million downloads in just days, though the
users' longterm interest remains unproven.
"We saw unprecedented growth out of the gate and, more
importantly, we're seeing more people coming back daily than I'd
expected," Zuckerberg said of Threads.
"Now we're focused on retention and improving the
basics; I'm really happy with the path that we're on here."
On AI, Zuckerberg has chosen a different track than
Microsoft and its partnership with OpenAI.
Meta instead has endorsed a more "open source"
approach and made its Llama generative AI technology available to researchers
and companies to adapt to their own needs.
Investors are keen to see how Meta expands use of generative
AI in its products, questions on the earnings call showed.
Zuckerberg indicated in a recent podcast that his company is
working on an AI platform that would allow creators and advertisers to more
efficiently work together.
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