The company reported total revenue for the quarter was $ 27.91 billion, excluding analysts’ estimates of $ 28.20 billion, according to IBES data from Refinitiv. Wednesday’s earnings were Meta’s first since a dramatic report in February, when Meta lost a record $ 230 billion in stock after revealing that Facebook had recorded its first drop in daily user numbers. The company’s first quarter earnings for 2022 represent a slight recovery, with daily active users (DAUs) on Facebook now slightly above analysts’ estimates. However, the company’s revenue growth of 7% from year to year was the smallest it has reported in its 10-year history and decreased by 21% compared to the previous year. “The pace of daily active users was enough to cover the shorts and the stock going up,” said Jesse Cohen, senior analyst at Investing.com. “With those words, it was a mixed exhibition as a whole.” Facebook’s parent company is in the midst of a renaming of its products and a redesign of its business model. Its CEO, Mark Zuckerberg, announced that Meta will focus more on metaverse, a virtual reality platform, than on the core of its social media business. Meta’s investment in metaverse will be slow to pay off, analysts warn – and its cost reflects this: Reality Labs, a virtual reality R&D industry, has lost $ 2.96 billion this year compared to $ 1. $ 83 billion in losses last year. Zuckerberg acknowledged this in a call to investors on Wednesday, noting that investments in metaverse differed from previous product releases because virtual reality often includes hardware and has a higher entry barrier. “Mostly this lays the groundwork for what I would expect to be a very exciting 2030,” he said. He added that the company seeks to expand its user base in the post-universe by offering a version of the Horizon Worlds virtual reality experience on computers this year. Earlier this month, Meta announced plans to monetize metaverse – including a developer fund that will allow users to monetize their virtual reality creations. However, adoption is low and “Meta needs to continue investing to help attract developers and brand names to its platform,” said Raj Shah, an analyst at Publicis Sapient. “The advantage for Meta is that it still has a strong amount of cash on hand that will allow it to invest in its vision – if it can stay afloat and stay committed to that vision,” she said. Net income from the Meta family of app businesses fell 13% from $ 11.48 billion last year. Meta said in a guidance for the second quarter, it expects revenue of $ 28 billion to $ 30 billion – slightly lower than previous analysts’ estimates of $ 30.6 billion, reflecting headwinds affecting the technology sector as a whole, including war with Ukraine. Like other social media companies, including Alphabet, Meta reports increased competition for users and advertising dollars from TikTok. Time on Reels – Meta’s response to the short video platform – now accounts for 20% of the time spent on Instagram and video accounts for 50% of the time spent on Facebook, Zuckerberg said on Wednesday. As the use of these features grows, she said it was a long-term investment that was currently making a profit. The company also sought to improve video algorithm systems to improve content suggestions. “We focus on the development of Reels as a central part of the discovery engine vision,” said Zuckerberg. “We expect this expansion and commitment to shift from a short-term headwind to a tailwind at some point.” Reuters contributed to this report
