Meta on Wednesday reported a profit of $13.5 billion in the recently ended quarter, beating market expectations and sending its share price soaring.
Meta, the parent company of Facebook and Instagram, said revenue in the quarter was $39 billion, about 22 percent higher than the same period a year earlier.
“We had a strong quarter and Meta AI is on track to become the world’s most used AI assistant by the end of the year,” said Meta founder and CEO Mark Zuckerberg.
Meta shares rose more than 4 percent to $495.30 in after-market trading following the earnings release.
The impressive profit came even as Meta’s Reality Labs unit, which is dedicated to virtual and augmented reality products, lost $4.5 billion, which was more than analysts had expected.
Meta’s costs overall rose seven percent to $24.22 billion compared to the same period last year as it races against Microsoft, Google and other tech companies to take the lead in artificial intelligence.
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“We’ve released the first open-source AI model at the frontier level, continue to see good traction with Ray-Ban Meta AI glasses, and are driving good growth in our apps,” Zuckerberg said.
Zuckerberg has become an unlikely evangelist for open source technology when it comes to AI development, pitting him against OpenAI and Google.
The 40-year-old tech mogul recently laid out his vision in an open letter titled “Open Source Artificial Intelligence is the Way Forward.”
Meta reported that an average of 3.27 billion people used at least one of the Silicon Valley giant’s family of apps that includes WhatsApp, Instagram and Facebook.
Meta said ad views in the quarter were 10 percent more than the same period last year, and the average ad price rose by a similar percentage.
“Concerns investors may have had about Meta’s AI and metaverse spending are likely to be eased by this quarter’s results,” said eMarketer principal analyst Max Willens.
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“Meta’s careful introduction of ads to Reels led to a perfect storm of increased impressions and increased ad prices.”
Willens added that Meta investors should feel comfortable with the company’s “dynamic investments in its plans for the future.”
Reels is a short Meta algorithm video sharing service that started as a challenge to TikTok, which is facing the possibility of a ban in the United States under a new law that is about to take effect.
In another potential boost to its business, by the end of the year Meta could also start selling ads on Threads, its X (formerly Twitter)-like text messaging platform.
The rise in sales and profits continued Meta’s turnaround in 2023, which came thanks to drastic cost-cutting, including massive layoffs in what Zuckerberg called an “efficiency year” that let tens of thousands of employees go after a miserable 2022.
Meta said its global workforce now stands at 70,799, down from last quarter and down from a peak of more than 87,000 workers in 2022.
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Zuckerberg urged investors to be patient as his company made its move into artificial intelligence, acknowledging that rolling out new products before they make money has “historically seen a lot of volatility in our stock.”
Source: AFP