Facebook parent Meta quarterly profit more than doubles but says 2024 revenue outlook ‘uncertain’
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The tech giant said revenue also grew 23 per cent to US$34 billion when compared to the same period a year earlier.
PHOTO: REUTERS
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San Francisco – Meta on Wednesday reported that its quarterly profit more than doubled from 2022’s figure to US$11.6 billion (S$15.9 billion), as it looks ahead at a volatile advertising market.
The tech giant behind Facebook, Instagram and WhatsApp said revenue also grew 23 per cent to US$34 billion when compared with the same period a year earlier.
“We had a good quarter for our community and business,” Meta chief executive Mark Zuckerberg said in an earnings release.
The number of people using Facebook monthly rose slightly to 3.05 billion in a year-on-year comparison, while the number of monthly active users of Meta’s “family of apps” was 3.96 billion, a 7 per cent increase from the same quarter in 2022.
Meta said it had trimmed costs in the recently ended quarter, with layoffs and other belt-tightening measures started in 2022 providing “greater efficiency”.
Meta suffered a rough 2022 amid a souring economic climate, which forced advertisers to cut back on spending, and Apple’s data privacy changes, which allowed users to block ad targeting, the pillar of Meta’s business.
Meta’s vow of austerity on spending brought an unprecedented round of cost-cutting that saw the company lay off tens of thousands of workers
Its shares initially climbed more than 5 per cent on Wednesday after its results announcement, but slid more than 3 per cent in extended trading after executives expressed concerns about the macro environment.
“We are very subject to volatility in the macro landscape,” chief financial officer Susan Li said on a call with investors.
The revenue outlook is uncertain for 2024, she added.
Meta’s warning on potential macro uncertainties that could impact revenue came alongside an expensive spending plan for 2024, mostly on artificial intelligence (AI) infrastructure and talent.
The company is also continuing its investment in the money-losing virtual reality division, known as Reality Labs.
Independent tech analyst Rob Enderle maintained that Meta is at risk from lawsuits poised to damage its image and its wallet.
Dozens of US states in a joint lawsuit filed this week accused Meta of profiting “from children’s pain”, damaging their mental health and misleading people about the safety of its platforms.
They accused Meta of exploiting young users by creating a business model designed to maximise the time they spend on the platform despite harm to their health.
Meanwhile, the European Union is seeking details on measures Meta has taken to stop the spread of “illegal content and disinformation” in the light of the conflict between Israel and Hamas.
AI race
For 2024, Meta sees its expenses increasing to between US$94 billion and US$99 billion.
Most of those dollars will go towards its continued expansion of technology infrastructure to run complex AI and virtual reality tools, and hiring more workers for higher-cost technical roles to build those products, according to its statement.
Meta has taken a much more cautious approach than rivals Microsoft, OpenAI and Google to push out AI products, prioritising small steps and making its in-house models available to developers and researchers.
Meta’s chief technology officer has pushed back on assertions that the company has fallen behind rivals like ChatGPT in the explosive surge across the tech industry in generative AI.
“The majority of the world’s population will have their first experience of generative artificial intelligence with us,” Mr Andrew Bosworth told AFP news agency.
Meta recently unveiled AI chatbots with personalities, along with tools for creating images or written content using spoken prompts.
AFP, BLOOMBERG
