After months of disappointing results for investors, Meta finally brought some good news. The financial report for the first quarter of 2023 showed a 3% increase in revenues compared to the previous year. Until then, there were already three intervals of fall. However, costs increased, and profits decreased.
Meta revenues were US$ 28.645 billion from January to March 2023, against US$ 27.908 billion in the same period of 2022.
The expectation of analysts interviewed by Refinitiv was US$ 27.650 billion – that is, a decrease compared to 2022. The market reacted well, and Meta’s shares rose by 12%.
Other good results were in the number of users. Across all of Meta’s apps — Facebook, Instagram, WhatsApp and Messenger — there was a year-on-year growth of 5% in both monthly active and daily active users.
Expenses and profits are the downside
The return of revenue growth was the main news, but there are not so good numbers.
Meta’s expenses increased by 10%. In the first quarter of 2023, they were US$ 21.418 billion. In the same period of 2022, they were US$ 19.384 billion.
Net income also dropped: 24% lower than the previous year. In the first quarter of 2023, it was US$ 5.709 billion, against US$ 7.465 in 2022.
Layoffs generate costs, but encourage investors
Ironically, part of this cost increase was due to massive layoffs: Meta spent $1.14 billion on its restructuring. The company warns that these expenses could reach US$ 5 billion throughout 2023.
Meta has 77,114 employees, 1% less than last year. This number already reflects the November 2022 layoff, but still includes those who were and will be laid off in 2023.
Mark Zuckerberg, CEO of the company, has been saying that 2023 is the “year of efficiency”.
He reinforced that message in the statement to investors: “(the company) is becoming more efficient so that we can create better products faster and put ourselves in a stronger position to realize our long-term vision.”
As noted by CNBC, since February, when news of more mass layoffs emerged, the Target has been rising on the stock exchange. In 2023, the increase already reaches 74%.
This, however, was still not enough to recover the two-thirds drop in market value that the company suffered in 2022.
The metaverse was Mark Zuckerberg’s big bet in 2021, when the company formerly known as Facebook was renamed Meta. Since then, he has been shunned by shareholders, who want more investments in artificial intelligence.
Reality Labs — the division of Meta responsible for developing virtual reality and augmented reality technologies for the metaverse — lost $3.99 billion.
It’s bad, and it’s going to get worse. According to Meta, losses in this sector of the company will increase this year.
