Meta’s shares rose from the results of its first quarter of 2022, despite the tech giant reporting its slowest revenue growth in a decade.
Facebook’s parent company Meta recorded a first quarter loss of nearly $3bn in the recently created Facebook Reality Labs (FRL) division, which handles the augmented and virtual reality operations of the company.
When the tech giant changed its name last year to show its commitment to the metaverse, it estimated that metaverse investment would be $10bn for 2021 alone, with more to come in the next several years.
Meanwhile, Facebook’s daily active users are back on the rise, after they fell for the first time in the platform’s 18-year history at the end of 2021. The tech giant’s shares jumped 18pc in extended trading after the news was announced yesterday (27 April), CNBC reported.
Meta’s total revenue for the quarter was $27.9bn, a year on year increase of 7pc and slightly below analyst expectations according to Refinitiv. This is the tech giant’s slowest revenue growth in a decade, BBC reported.
Daily active users reached an average of 1.96bn for the quarter, which was slightly higher than StreetAccount expectations.
Earnings per share stood at $2.72, which was more than the $2.56 expected by Refinitiv, while the FRL division generated revenue of $695m in the first quarter, which was slightly higher than analyst expectations according to Coindesk.
“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” Meta CEO Mark Zuckerberg said. “More people use our services today than ever before, and I’m proud of how our products are serving people around the world.”
Meta’s chief financial officer David Wehner said the total revenue for the second quarter is expected to be around $28bn to $30bn.
“This outlook reflects a continuation of the trends impacting revenue growth in the first quarter, including softness in the back half of the first quarter that coincided with the war in Ukraine,” Wehner said.
The company has faced issues from the privacy changes to Apple iOS which were rolled out in April 2021. By last November, these changes reportedly cost tech giants like Meta nearly $9.85bn in revenue.
The total number of employees working for Meta now stands at 77,805, a year on year increase of 28pc.
Meta’s earnings came a day after Google’s parent company Alphabet reported weaker quarterly earnings than expected, while Microsoft’s cloud unit saw significant growth and Xbox reported its best non-holiday quarter for revenue.
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