Meta Platforms (META) reported first quarter results after the close on Wednesday that blew away expectations, while the company also raised its forecast for the current quarter and lowered its expense forecast.
The Facebook and Instagram parent company saw shares surge as much as 11%, to their highest level since January 2022, in after-hours trading. Meta, which has touted 2023 as its “Year of Efficiency” said in the release that it has “substantially completed” its 2022 layoffs, though it will continue to conduct layoffs this year.
Last month, Meta announced it would cut 10,000 workers, building on the company’s previous layoff announcement back in November.
Here are the most important numbers from Meta’s earnings, compared to analysts’ estimates compiled by Bloomberg:
- Revenue: $28.65 billion actual versus $27.67 billion estimated
- EPS: $2.20 actual versus $2.01 estimated
- Advertising Revenue: $28.1 billion actual versus $26.76 billion estimated
- Family of Apps Revenue: $28.3 billion actual versus $26.88 billion estimated
- Reality Labs Operating Losses: $3.99 billion actual versus $3.8 billion estimated
- Q2 Revenue: $29.5 billion-$32 billion actual versus $29.48 billion estimated
“We had a good quarter and our community continues to grow,” said Meta CEO Mark Zuckerberg in a statement.
“Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision.”
And there seems to be a light at the end of the tunnel when it comes to the digital advertising slowdown, which rattled Meta in previous earnings cycles.
The company’s ad revenue beat was bolstered by the growth of ad impressions, which rose 26% year-over-year in Meta’s “Family of Apps,” which includes Facebook, Instagram, and WhatsApp.
Cost cutting
If this earnings cycle is about cost-cutting in Big Tech, perhaps no company has been more ruthless than Meta.
In October, the company was guiding for 2023 expenses to come in between $96 billion to $101 billion. In Wednesday’s release, the company said it now sees expenses for this year coming in between $86 billion to $90 billion, including restructuring costs.
This also accounts for losses in the company’s metaverse division, Reality Labs, which are expected to continue and increase year-over-year. Reality Labs lost $13.7 billion in 2022.
The company reported headcount at the end of Q1 stood at 77,114, a decrease of 1% from last year.
In its release, Meta said, “Substantially all employees impacted by the layoffs announced in November 2022 are no longer reflected in our reported headcount as of March 31, 2023. Further, the employees that would be impacted by the 2023 layoffs are included in our reported headcount as of March 31, 2023.”
Despite layoffs, like Alphabet (GOOG, GOOGL) and Microsoft (MSFT), Meta is doing buybacks. The company repurchased $9.22 billion of its shares in Q1 2023 and, as of March 31, Meta was authorized to repurchase $41.73 billion of its own stock.
