Social-media powerhouse meta punched in huge sales growth for the first quarter of 2024, as Mark Zuckerberg’s “year of efficiency” job cuts last year paid off with net income more than doubling.
The company, parent of Facebook, Instagram and WhatsApp, reported Q1 revenue of $36.46 billion, up 27%, and net income soared 117% to $12.37 billion (or $4.71 per share). The results topped Wall Street expectations.
However, shares of meta fell more than 11% in after-hours trading after the company provided Q2 guidance that fell below analyst forecasts. meta said it expects second quarter 2024 total revenue to be in the range of $36.5 billion-$39 billion. In addition, the company upped estimates for full-year 2024 capital spending to $35 billion-40 billion (versus $30 billion-$37 billion previously) “as we continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap.” It also expects capital expenditures will continue to increase in 2025 due to investment in AI.
“It’s been a good start to the year,” Zuckerberg, meta’s chairman and CEO, said in prepared remarks. “We’re seeing healthy growth across our apps and we continue making steady progress building the metaverse as well.”
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With the Q1 report, meta is no longer reporting average monthly users for its family of apps, nor is it disclosing daily or monthly user figures for the flagship Facebook app — a signal that Facebook users may finally be plateauing. For March 2024, meta said daily active users across its apps — a metric the company terms “daily active people (DAP)”– was 3.24 billion, up from 3.19 billion in December 2023.
Analysts on average had expected meta’s Q1 revenue to hit $36.16 billion with earnings per share of $4.32, according to data provider LSEG. Q2 forecasts were for revenue of $38.29 billion.
For Q1, meta’s Reality Labs division, which houses the Quest AR/VR headset and metaverse initiatives, continued to drag on overall earnings. The company reiterated that in 2024, it expects Reality Labs operating losses to “increase meaningfully” year-over-year “due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem.”
meta laid off around 21,000 workers from the end of 2022 into the first half of 2023, and Zuckerberg told analysts the company’s hiring going forward would be comparatively minimal. The job cuts came after a hiring boom during COVID.
