Image: © Valeriya Zankovych/Stock.adobe.com
Meta’s shares rose on the back of its first-quarter results, despite the tech giant reporting its slowest revenue growth in a decade.
Facebook parent company Meta recorded a first-quarter loss of nearly $3bn in its Facebook Reality Labs (FRL) division, which handles the augmented and virtual reality operations of the company.
When the tech giant changed its name last year to show its commitment to the concept of the metaverse, it estimated that investment in this area would be $10bn for 2021 alone, with more to come in the next several years.
In its first quarterly earnings report for 2022, Meta revealed that the Reality Labs unit generated $695m in revenue but lost $2.96bn.
Meta’s total revenue for the quarter was $27.9bn, a year-on-year increase of 7pc and slightly below analyst expectations according to Refinitiv. This is the tech giant’s slowest revenue growth in a decade, BBC reported.
However, Facebook’s daily active users are back on the rise after they fell for the first time in the platform’s 18-year history at the end of 2021. Daily active users reached an average of 1.96bn for the quarter, up 4pc compared to the same period last year.
The tech giant’s shares jumped 18pc in extended trading after the news was announced yesterday (27 April), CNBC reported.
“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” Meta CEO Mark Zuckerberg said.
“More people use our services today than ever before, and I’m proud of how our products are serving people around the world.”
Meta’s chief financial officer, David Wehner, said revenue for the second quarter of the year is expected to be around $28bn to $30bn.
“This outlook reflects a continuation of the trends impacting revenue growth in the first quarter, including softness in the back half of the first quarter that coincided with the war in Ukraine,” Wehner said.
The company has also faced issues from the privacy changes to Apple iOS that were rolled out in 2021.
The total number of employees working for Meta now stands at 77,805, a year-on-year increase of 28pc.
Its latest earnings report came a day after Google parent company Alphabet reported weaker quarterly earnings than expected, while Microsoft’s saw solid growth driven by its cloud unit.
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