Meta first quarter results exceeds expectations
Meta Platforms performed better in the first quarter than analysts had anticipated. Both revenue and profit came in above expectations, mainly thanks to strong advertising income.
In the first quarter, Meta saw its revenue rise by 33% to $56.3 billion, compared with expectations of $55.6 billion.
Operating profit increased by 30% to $22.9 billion. Net profit rose 61% to $26.8 billion.
The number of advertising impressions increased by 19% year-on-year, while the average advertising price was up 12%.
The number of daily active users reached 3.56 billion in March, a 4% increase year-on-year.
The growth was partly driven by the use of artificial intelligence within the advertising platform. These AI tools make ads more effective and attractive for businesses, which supports revenue.
Despite the strong figures, the parent company of Facebook, Instagram and WhatsApp is once again set to cut thousands of jobs. The company plans to lay off around 10% of its workforce, which amounts to roughly 8,000 employees.
The redundancies are part of a broader reorganisation. Meta is trying to operate more efficiently and wants to invest more in artificial intelligence (AI). As a result, fewer employees are needed for certain roles, while the company is doubling down on technology and automation.
This new round of layoffs follows earlier major cost-cutting measures at the company in recent years. Meta has been trying for some time to reduce expenses and adjust its strategy to changes in the tech sector, such as increasing competition and the rapid development of AI.
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There is quite a lot going on at Meta. Meta Platforms and Amazon announced last week that Meta will start using Amazon Web Services’ (AWS) Graviton5 processor chips. According to an AWS executive, it is a multi-year agreement worth billions of dollars.
AWS has been developing its own processors since 2018 and is now on the fifth generation. The chips are manufactured by Taiwan Semiconductor Manufacturing Co.
The Chinese government wants Meta Platforms to reverse its takeover of AI firm Manus. The deal, reportedly worth billions of dollars, has already been completed, but Beijing has nonetheless intervened.
Manus develops so-called AI agents: systems that can independently carry out tasks based on existing chatbots. The company has Chinese roots but now operates out of Singapore. Meta Platforms previously acquired the company to further expand its own AI services.
However, according to the Chinese authorities, the acquisition is not allowed to go ahead. They are demanding that the transaction be undone, although it is not entirely clear how that should work in practice now that the deal has already been closed.
In the meantime, the Consumer Federation of America is taking the company to court, claiming that users are insufficiently protected against scam adverts on Facebook and Instagram.
According to the plaintiffs, Meta deliberately allows such ads because they are profitable. The case cites examples such as fake promotions for free iPhones, bogus benefit payments and adverts featuring AI-generated images. The organisation claims that competitors carry out stricter checks, while Meta actually profits from high-risk advertisers.
Meta rejects these accusations. The company says it actively combats scams and removes millions of fraudulent adverts. According to Meta, scams damage the trust of users and honest advertisers, which means it would also be commercially disadvantageous to allow them.
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