Shares of Facebook parent Meta (FB) rose in the morning trading on Thursday following a Q1 earnings report. Shared social media shares have risen by more than 14% despite the expected loss of revenue, as investors and analysts have devised corporate plans to reduce spending.
At the top, the Meta report was not all that good. Missing revenue estimates, analysts expect the company to bring in $ 28.24 billion rather than the reported 27.9 billion. But the company saw better pay per share per share than previously thought.
More importantly, the Facebook Meta app has once again added users, with users increasing by 4% to 1.96 billion active users daily after the app lost 1 million in the last quarter.
"According to our checks, the quarter was below expectations due to national concerns, continued iOS privacy challenges and switching to Reels," Mizuho analyst James Lee wrote in a report.
“With that in mind, the [Q2 2022] direction came down the road to a low [annual] level, as growing uncertainty enhances the impact of the Facebook platform and the tech-stack shift. On the other hand, the growth [of the daily active user] has been restored due to the increase in Reels' involvement, ”writes Lee.
Meta stocks declined sharply following its previous earnings report. Prior to Wednesday's report, the company's shares had risen 41% in the past three months.
The best news for investors, however, comes from CEO Mark Zuckerberg, who said that although the company continues to invest in metaverse under its Reality Labs business - $ 2.96 billion in Q1 alone - making money through its family of social apps is still very important. .
"On the Applications Family side, I'm confident we can return to better revenue growth over time and maintain high performance margins," Zuckerberg said during a lead Meta call.
“At Reality Labs, we are investing heavily to deliver the next platform that I believe will be incredibly important for both our purpose and business - comparable in value to the best mobile platforms today. I can see that it 's expensive to build this - it' s an unprecedented and new paradigm for computer and social media. "
Zuckerberg is moving forward with his metaverse plans, an emerging series of online worlds. But whether the average consumer will dive into the metrics remains to be seen.
Revenue from Reality Labs, which includes Oculus headset sales and software, generated $ 695 million per quarter, jumping from $ 534 million a quarter brought in the same quarter last year. Meta recently opened its first store dedicated to its metaverse products.
However, headphones and metaverse are generally still far from the norm among consumers. And whether it will ever reach that level of entry or not will take years to understand.
Meta also continues to face the storms of its advertising business. The company identified the Ukrainian war and its impact on European spending, as well as the latest privacy changes on Apple's (AAPL) iOS, which allow consumers to opt out of having the following apps. Meta says iOS developments alone will generate $ 10 billion by 2022.
Meta is not the only company dealing with iOS issues. The caption announced during its earnings that YouTube was facing similar issues, but competitors like Snap appear to be less likely to change privacy.
That being said, Meta results were ahead of the low expectations that investors had in the quarter. If it can continue with that type of performance going forward, it could set itself a big win in the coming quarters.
