Agencies
Meta on Wednesday reported profit of $13.5 billion in the recently ended quarter, beating market expectations and causing its share price to jump.
Meta, the parent company of Facebook and Instagram, said revenue in the quarter was $39 billion, some 22 percent higher than the same period a year earlier.
"We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year,” said Meta founder and chief Mark Zuckerberg.
Meta shares rose more than four percent to $495.30 in after-market trade that followed the release of the earnings figures.
The impressive profit came even though Meta’s Reality Labs unit, devoted to virtual and augmented reality products, lost $4.5 billion, which was more than analysts expected.
Meta costs overall rose seven percent to $24.22 billion when compared with the same period a year earlier as it races against Microsoft, Google and other tech firms to be a leader in artificial intelligence.
"We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps,” Zuckerberg said.
Zuckerberg has become an unexpected evangelist for open source technology when it comes to developing artificial intelligence, pitting him against OpenAI and Google.
The 40-year-old tech tycoon recently laid out his vision in an open letter titled "Open Source AI is the Path Forward.”
Meta reported that an average of 3.27 billion people used at least one of the Silicon Valley giant’s family of apps that include WhatsApp, Instagram, and Facebook.
Meta said ad views in the quarter were 10 percent more than during the same period last year, and the average price of ads was up a similar percentage.
"Any apprehensions investors may have had about Meta’s spending on AI and the metaverse are likely to be allayed by this quarter’s results,” said eMarketer principal analyst Max Willens.
"Meta’s careful introduction of ads on Reels has led to a perfect storm of rising impressions and rising ad prices.” Willens added that Meta investors should feel comfortable with the company’s "vigorous investments in its plans for the future.”
Reels is an algorithm-fueled short video sharing service Meta launched in a challenge to TikTok, which faces the potential of being banned in the United States under a new law poised to take effect.
In another potential boost to its business, by the end of the year, Meta could also start selling advertising on Threads, its text message platform similar to X.
The rise in sales and profit continued Meta’s rebound of 2023, which came thanks to drastic cost-cutting, including massive layoffs in what Zuckerberg dubbed the "year of efficiency” that saw tens of thousands of employees let go after a miserable 2022.
Meta said its global workforce now stood at 70,799, trimmed from last quarter and down from a peak of more than 87,000 employees in 2022.
Zuckerberg has urged investors to be patient as his company made its move into AI, acknowledging that unrolling new products before they made money had "historically seen a lot of volatility in our stock.”