The halo returned to Mark Zuckerberg: After a year of plunging, Meta revenue increased for the first time, ‘showing off’ that there are 2.04 billion Facebook users per day

Facebook parent company Meta Platforms yesterday reported its first increase in sales in a year as continued improvements in the advertising sector, successful spending cuts under the plan that CEO Mark Zuckerberg called is to create the “effective year”.

Zuckerberg specifically mentioned Reels as the main driver of these positive results. He says that Reels is helping to increase engagement across the app overall and that the company believes it is slowly gaining market share in the short video segment.

“ When I started launching Reels last year, the business wasn’t going as well as I wanted it to. But now, we are strengthening Reels operations from a strong position .”

Also in the report, the company reported revenue of $28.6 billion, up 3% from a year ago and beating the previous forecast of just $27.7 billion. Shares of the company soon rose more than 12% as they forecast second-quarter revenue could hit a high of $32 billion.

The difficult economic environment and Apple’s changes in 2021 have severely hurt the digital advertising market. Meta also faces increased competition from TikTok, which currently has 150 million monthly users in the US.

The 3% increase is an improvement over the 4.5% drop in revenue the company saw in the final quarter of 2022. This shows that Meta’s heavy investments in artificial intelligence. (AI) is improving the targeted advertising system and is showing results.

AI efforts along with shifting advertising less reliant on mining user data from the company’s platforms are essential to the plan for recovery. Meta has made strides in overcoming Apple’s privacy change that limits the company’s ability to gather information about how users spend, their preferences, and more.

Zuckerberg said that he predicts AI will have an impact on every Meta app and service. He reasoned that the company could make it easier for clients to create ads for Meta’s services, a business chatbot tool on Messenger and WhatsApp, and also make it easier for users of the virtual universe to create photos. representation and virtual world.

Zuckerberg also said that he expected Meta to take a more open-source approach to AI than companies like Alphabet, Microsoft, and Amazon due to their distinct business models.

The company says its operating margin would be 4% higher if it weren’t for the restructuring costs it previously announced.

Meta’s app family of Facebook, Instagram, and WhatApp now incurs a restructuring cost of $934 million in the first quarter. The Reality Labs segment – the branch that embraces the ambition to build a virtual universe costs $210 million.

Back in 2021, Zuckerberg changed the company’s name from Facebook to Meta to reflect a new focus on the virtual universe.

However, Reality Labs reported revenue of $339 million for the quarter, down 51% year-over-year. This branch is also responsible for creating the virtual reality device Quest and has recorded a loss of $ 4 billion.

” Building a virtual universe is a long-term project, and we remain committed to this vision ,” Zuckerberg said.

The company says that it predicts costs in 2023 at $86 billion-$90 billion, down from its previous estimate of $89 billion-$95 billion.

Meta says that their average ad price has dropped 17% over the past year. During the same quarter last year, the average price per ad fell 8%.

Meta stock will lose two-thirds of its value in 2022, wiping out $600 billion in market capitalization. Last year, the company warned that Apple’s changes cost it $10 billion in revenue. After Zuckebrerg’s “effective” boosting moves, the company’s stock rebounded, up 70% through Tuesday’s close.

The company also reported profits of $5.7 billion in the first quarter. This is down 24% year-on-year but is up $4.7 billion from the last quarter of 2022.

Meta says that Facebook’s daily user base continues to grow and reaches 2.04 billion users, up from 2 billion users in the fourth quarter of 2022.

Source: WSJ