Meta turned a profit in the first quarter, beating forecasts. At the same time, the virtual world Metaverse is swallowing up billions and remains a niche business that has recently shrunk.
Things are looking up again for the Facebook group Meta. After the group had to struggle with losses for nine months in a row, sales in the past quarter rose by three percent to around 28.7 billion dollars. The group announced this on Wednesday evening after the stock market closed in the USA and thus significantly exceeded the expectations of the analysts. And Meta is also expecting a plus for the current quarter.
CEO Mark Zuckerberg said: “This was a good quarter and we are seeing increasing momentum in our products and our business.” This is supported by the fact that the number of Facebook users has risen by five percent to more than 3.8 billion. And the group also posted an increase in advertisements: 26 percent more advertisements than in the same period last year were sold in the past quarter.
metaverse is losing trade
However, the experimental group division Reality Labs, which is responsible for the virtual world called Metaverse, is still a loss-making business for the Facebook parent company. In the first three months of 2023, Meta recorded a loss of almost four billion dollars there. Nevertheless, Zuckerberg sees artificial intelligence as the growth driver for the coming years. According to Zuckerberg, artificial intelligence will influence all of the group’s apps and services.
In the past few months, Meta had also been troubled by Apple’s measures to increase privacy protection. The group is also concerned about the uncertainty surrounding data transmission from the European Union to the USA. The process for a new legal framework for this is currently underway after the previous model “Privacy Shield” was overturned by the European Court of Justice.
“Year of Efficiency”
At the same time, Meta is currently running a strict austerity program and had reduced almost a quarter of its global workforce in just a few months. This wave of layoffs will be completed next month, and the company will then also start hiring new professionals, primarily in the areas of advertising, metaverse and artificial intelligence. In total, Zuckerberg had around 21,000 jobs cut.
The group is thus significantly reducing its forecast expenses: Instead of originally spending up to $92 billion, the company will spend a maximum of $90 billion this year, said Zuckerberg. He proclaimed a “Year of Efficiency”.
Share with a clear plus
Yesterday, investors were concerned about the high expenses for the Metaverse development, because Meta also expects increasing losses at Reality Labs for the current year. Overall, however, the data was well received: De Meta shares rose by almost ten percent to $ 239 after the quarterly figures were published.