The company posted $ 7.5 billion in January-March, down 21 percent from a year earlier, but exceeded Wall Street expectations of about $ 7.1 billion, according to S&P Capital IQ. . Revenue was $ 27.9 billion, up 7 percent from last year, despite pressure from Russia’s invasion of Ukraine, heightened competition and a change in Apple’s privacy that has weighed heavily on social media platforms. . This was lower than analysts’ already weakened expectations. The company said it expects negative trends to continue this quarter, citing the “softness” that comes from the impact of the conflict in Ukraine. It forecast a range of $ 28 billion to $ 30 billion in second-quarter revenue. Analysts had hoped it could exceed $ 30 billion. But unexpectedly strong gains and lower cost forecasts for the rest of the year appeared to push investors into after-hours trading, with shares jumping almost 20%. The company cut its outlook for spending this year to $ 87 billion to $ 92 billion, less than its previous forecast of $ 90 billion to $ 95 billion. Overall, the results were “better than Wall Street feared,” said Jefferies analyst Brent Thill. Advertising revenue, which accounts for almost all of the company’s revenue, was $ 26.9 billion. Analysts had hoped for $ 27.6 billion, according to Refinitiv. The effects of the war in Ukraine are also borne by sales. The Kremlin has banned Facebook, and a social media group has banned Russian advertisers from trading on the platform. Meta said the number of ad impressions on its applications increased by 15 percent compared to last year, while the price it charged per ad decreased by 8 percent. Mark Zuckerberg, CEO and Founder, said its multi-year projects, such as betting on artificial intelligence and the post-system, would be limited “given the current level of development of our business”. “These investments will be important for our success and growth over time, so I continue to believe we need to complete them,” he told investors Wednesday. The company’s Reality Labs division – which includes its reconnection and virtual reality efforts – had a net loss of $ 3 billion in the quarter with revenue of $ 695 million. The company’s “family” of applications, including Instagram and WhatsApp, registered 2.87 billion active users daily in the quarter, an increase of 6 percent year on year. The increase in active users was better than expected as investors carefully consider how many users, especially younger ones, are finding alternatives, such as TikTok, a more attractive place to spend their time online. Zuckerberg announced the development of Reels, the TikTok mimic that the company recently added to its Instagram app. Sheryl Sandberg, chief operating officer, said the company had strong potential to implement an advertising model for Reels, which accounted for 20 percent of all time spent on Instagram. “We have a lot of consumer commitment at Reels, we have rapid growth,” Sandberg said. “And we have a game book to use that kind of consumer loyalty and to promote advertising in the experience. This will be a multi-year journey. . . “But it’s something we are very optimistic about.” Zuckerberg warned investors this year that the company would find it difficult to meet Wall Street’s high expectations, blaming “increasing competition” from rivals, particularly TikTok. Apple’s recent privacy changes have also affected Meta’s business model, limiting its ability to personalize advertising, its primary source of revenue. After Meta’s catastrophic fourth-quarter earnings in 2021, more than $ 220 billion was eliminated from market capitalization in the biggest drop in share price since it went public in 2012. Shares were still falling about 49 percent since beginning of the year before earnings released on Wednesday.

Zuckerberg at the time blamed growing competition for distraction. “People have a lot of choices about how they want to spend their time, and applications like TikTok are growing very fast,” he said. Forrester’s research director Mike Proulx warned that keeping up with the rapid growth of TikTok would be a difficult task. “While short video now accounts for 20 percent of the time spent on Instagram, it is 100 percent of the time on TikTok – an app that has already generated revenue and continues to grow across generations,” he said. Macroeconomic uncertainty, such as high inflation and the war in Ukraine, have pushed other advertisers to cut their budgets. On Tuesday, YouTube owner Alphabet said its advertising business had slowed since the conflict, which did not live up to analysts’ expectations.