In the second quarter, Meta Platforms (Meta) reported financial outcomes that surpassed predictions, with revenues totaling $32 billion, exceeding Wall Street forecasts of $31.06 billion. Meta CEO Mark Zuckerberg said the results were the result of robust user engagement across the company’s applications. Zuckerberg revealed an ambitious roadmap featuring upcoming products such as Llama 2, Threads, Reels, new AI products, and the impending launch of Quest 3.
| Three Months Ended June 30, 2022 | Three Months Ended June 30, 2023 | Percentage Change | |
|---|---|---|---|
| Revenue | $28,822 | $31,999 | 11.03% |
| Costs and expenses | $20,464 | $22,607 | 10.47% |
| Income from operations | $8,358 | $9,392 | 12.37% |
| Net Income | $6,687 | $7,788 | 16.47% |
| Six Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Percentage Change | |
|---|---|---|---|
| Revenue | $56,729 | $60,645 | 6.91% |
| Costs and expenses | $39,848 | $44,026 | 10.46% |
| Income from operations | $16,881 | $16,619 | -1.55% |
| Net Income | $14,152 | $13,498 | -4.62% |
Advertising revenue for the company, the umbrella corporation for Facebook and Instagram, was reported to be $31.5 billion. Ad impressions soared 34% YoY, despite a 16% drop in price per ad over the same period. The increase in impressions was largely attributed to growth in the Asia-Pacific region and other parts of the world. The company’s daily active user counts also surpassed expectations, reporting 2.06 billion.
However, Meta also faced a larger operating loss than expected in its Reality Labs VR division, which lost $3.74 billion in the second quarter, more than the anticipated loss of $3.68 billion that Wall Street had expected. These losses are projected due to ongoing product development efforts in AR/VR and to scale the ecosystem. So, shockingly enough, or not, Reality Labs operating losses are expected to increase considerably YoY. The division reported losses exceeding $13 billion in 2022.
Meta’s latest VR headset, the Meta Quest 3, is expected to launch in the third quarter of the year. Despite the threat of increased competition from Apple with its Vision Pro, Zuckerberg asserts that Meta has been a pioneer in mixed reality with the Quest Pro headset and that the upcoming Quest 3 will be accessible to millions of users and raise the industry’s standard, meaning it is more affordable than Apple.
| Revenue | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Advertising | $31,498 | $28,152 | $59,599 | $55,150 |
| Other revenue | $225 | $218 | $430 | $433 |
| Family of Apps | $31,723 | $28,370 | $60,029 | $55,583 |
| Reality Labs | $276 | $452 | $616 | $1,146 |
| Total revenue | $31,999 | $28,822 | $60,645 | $56,729 |
| Income (loss) from operations | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Family of Apps | $13,131 | $11,164 | $24,351 | $22,647 |
| Reality Labs | ($3,739) | ($2,806) | ($7,732) | ($5,766) |
| Total income from operations | $9,392 | $8,358 | $16,619 | $16,881 |
Over 20,000 of Meta’s employees were laid off during 2022 and 2023. Some of them may have wished that cost-cutting at the company wasn’t just about them, but maybe it could have been about a market that has cost Meta $35.7 billion in losses (investment). That’s a staggering sum of money to have put into these products. As long as Meta piles up the cash in other areas, Zuckerberg is going to keep getting a pass, but any other company and the division would have been toast by now.
