Meta snatched an 11% jump in revenue and 16% in profit for Q2 2023, following its ‘year of efficiency’.
The Facebook owner and insistent proponent of the metaverse concept saw its Q2 revenue jump 11% YoY to $32 billion, thanks it seems largely to a rise in online advertising across the various theatres it operates in, while net income was up 16% to $7.79 billion.
This is reportedly better than analysts expected, and the company’s stock rose about 7% in after-hours trading Wednesday, according to MarketWatch.
Ad impressions delivered across its portfolio of apps increased by 34% YoY, and the average price per ad decreased by 16%.
“We had a good quarter. We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall,” said Mark Zuckerberg, Meta founder and CEO.
This follows a period of consolidation for the firm with Zuckerberg called a ‘year of efficiency’ in which he planned to let more than 11,000 staff go. According to yesterday’s financials, headcount was 71,469 as of June 30, 2023 – a decrease of 14% YoY.
In a post earlier this year he said: “For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products. But last year was a humbling wake-up call. The world economy changed, competitive pressures grew, and our growth slowed considerably. We scaled back budgets, shrunk our real estate footprint, and made the difficult decision to lay off 13 percent of our workforce.”
In terms of the outlook, the firm expects Q3 2023 total revenue to be in the range of $32-34.5 billion.
Full-year 2023 total expenses are expected to be in the range of $88-91 billion, increased from its prior range of $86-90 billion due to legal-related expenses recorded during Q2.
The forecast includes approximately $4 billion of restructuring costs related to’ facilities consolidation charges and severance and other personnel costs.’
In terms of its Reality Labs, the division tasked with putting out metaverse related products, it clocked operating losses of $3.7 billion for the quarter, and the firm expects operating losses ‘to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem.’
Meta has had a busy year in terms of new product launches, gaining some impressive early sign up numbers for its Twitter rivalling Threads app, and recently making its open source large language model Llama 2 free for commercial and research purposes.
But it still has a bit of an uphill battle with its metaverse division in terms of convincing the world that the sort of thing it is producing is the future, and therefore worth betting the farm on. Perhaps Zuckerberg will be vindicated in future years and we will all indeed be beaming into virtual worlds to have a meeting and socialise with headsets strapped to our faces – but for now, it’s hard to see the division as anything but a money hole.