Facebook parent Meta Platforms Inc on Wednesday reported better-than-expected profit in the recently ended quarter, calming investors worried about the toll of competition from TikTok and eased COVID-19 pandemic restrictions.
Meta said it made a profit of US$7.5 billion on revenue of US$27.9 billion in the first three months of this year, sending its shares up more than 18 percent in aftermarket trading.
“We made progress this quarter across a number of key company priorities, and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” Meta chief Mark Zuckerberg said.
Photo: Reuters
The average number of people using Facebook monthly rose 3 percent to 2.94 billion by the end of March, while 3.64 billion people used at least one member of Meta’s family of apps each month, the tech giant reported.
Meta owns Facebook, Messenger, WhatsApp, Instagram and virtual reality firm Oculus.
“More people use our services today than ever before, and I’m proud of how our products are serving people around the world,” Zuckerberg said.
Investors had been worried that as the pandemic eased and people socialized more in real life that they would engage less on Facebook. There were also concerns about competition from video sharing sensation TikTok.
Zuckerberg has cited pressure from TikTok, and launched his own short-form video sharing feature Reels which has seen fast growth on Facebook and Instagram.
“Video is the main way that people experience content online,” Zuckerberg said on an earnings call.
Reels accounts for more than a fifth of the time that people spend on image-centric social network Instagram, Zuckerberg told analysts.
Meta said it ended the quarter with 77,805 employees, an increase of 28 percent from a year earlier.
Meta has been investing heavily in a future that Zuckerberg believes will include spending time in immersive virtual worlds referred to as the metaverse. It has a Reality Labs unit devoted to what he has predicted is the future of the Internet.
The metaverse is a 3D virtual world where people will be able to interact using sensors, head gear and other gadgets, but doubts have swirled about whether the major metaverse investments will pay off for Meta.
Meta’s early metaverse platform, called Horizon Worlds, already allows people to socialize virtually while represented by avatars.
“Over the next several years, our goal from a financial perspective is to generate sufficient operating income growth from our family of apps to fund the growth of investment in Reality Labs, while still growing our overall profitability,” Zuckerberg said. “Now, unfortunately, that’s not gonna happen in 2022, given the revenue headwinds.”
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