Meta’s Strong Q1 Results Bolster Metaverse Commitment

Meta has announced financial results for the first quarter of 2023. Despite recent restructuring efforts that have led to over 11,000 job cuts, the company surprised investors with an unexpected increase in sales for the first quarter. Following the news, Meta shares surged 12% on Wednesday. 

The most recent quarter marks the first time in almost a year that the company has reported a year-over-year revenue increase, exceeding expectations.

• Family daily active people (DAP) increased by 5% YoY to 3.02 billion on average for March 2023.
• Facebook daily active users (DAUs) increased by 4% YoY to 2.04 billion on average for March 2023.
• Monthly Active Users (MAUs): an increase of 2% YoY to 2.99 billion.
• Ad impressions across their Family of Apps increased by 26% YoY.
• Revenue was $28.65 billion, a 3% YoY increase and a 6% YoY increase on a constant currency basis.
• Meta incurred pre-tax restructuring charges of $621 million in Q1 2023 related to layoffs and facility consolidation.

There was an improvement in most of the cash flows from operating activities during the first quarter of 2023 compared to the same period in 2022.

The company’s metaverse division, Reality Labs, generated $339 million in revenue but incurred an operating loss of almost $4 billion. In the entire 2022, it lost $13.7 billion. Meta further stated that it expects operating losses in Reality Labs to increase in the current year.

Meta announced that its estimated capital expenditures for 2023 would remain unchanged from its prior estimate at $30-33 billion. The company stated that this outlook is due to its continued investment in AI capacity for supporting ads, Feed, and Reels, as well as its increased investment in capacity for generative AI initiatives.

“We had a good quarter and our community continues to grow. Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision,”

Zuckerberg said.

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