The technology giant Meta (formerly Facebook) published this evening (Wed) its financial results for the first quarter of 2024, according to its fiscal division.
Meta reported revenues of $36.46 billion, a 27% increase compared to the corresponding quarter. Early forecasts expected revenues around $36.1 billion. This is the fifth quarter in a row in which Meta shows good revenue growth. However, Meta stated that it expects revenues in the second quarter in the range of 36.5 to 39 billion dollars and noted that the changes in foreign exchange rates are expected to affect the company’s revenues by about 1%. This means that the midpoint of the range, 37.75 billion dollars, represents a growth of 18% year-on-year per year, and is below the analysts’ consensus which was 38.3 billion dollars.
At the same time, the profit per share stood at $4.71, when the analysts expected a profit per share of $4.3 per share is expected to stand at $4.3. At the same time, revenues from advertising amounted to approximately 35.64 billion dollars, slightly above the early forecasts.
Another figure that investors follow is the company’s capital expenditures, the amounts that the company invests to develop, among other things, artificial intelligence and the metaverse. In the last quarter, Meta spent about $6.72 billion. Wall Street can see this as a positive in the long term, as before the oversight of Meta, the net profit was lower than the capital expenditures of the company. Now the balance is maintained.
Has the positive momentum stopped?
Meta’s latest reports were a real success story. Not only great data, such as net profit that jumped by almost 70% compared to last year, but also great forecasts that the market loved to see. In the previous quarter, Meta announced that it would start paying dividends for the first time. This led Meta to make real history – the stock then jumped by more than 20% after the reports were published and added no less than 205 billion dollars to its value in one day.
Like the other tech giants, Meta is also in a never-ending race for artificial intelligence. In the previous quarter, it was reported that Meta made a deal to purchase Nvidia’s processors, valued at $9 billion according to CNBC. At the same time, last week Meta announced that it is upgrading its chatbot, which will begin to compete with products from OpenAI and Google – such as creating an image from text.
The developments in the field of artificial intelligence have raised the concern among analysts about the increase in expenses and investments that the company will have to make. Indeed, Meta also expects that the developments in the field of artificial intelligence will also lead to an increase in the company’s expenses.
Meta predicts that the expenses for 2024 will increase to the range of 96-99 billion dollars, unlike the 94-99 billion dollars predicted earlier. The reasons for this are due to higher infrastructure and legal costs. Even now, the company mentions that the virtual worlds division, the Metaverse, will continue to accumulate operating losses significantly from year to year.
Annual capital expenditures for 2024 have also increased, to a range of $35-40 billion, up from a range of $30-37 billion.
At the same time, Meta made a change in relation to the reports of the number of its users in the applications. In the past, it reported the number of daily active users, the number of monthly active users including a division between Facebook and the other applications. It now only reports “daily active users in the app family,” which totaled around 3.24 billion, up 7% from the previous year.
Alongside this, the company’s Metaverse division reported sales of $440 million in this quarter, but at the same time reported losses of $3.85 billion.
For your attention: The Globes system strives for a diverse, relevant and respectful discourse in accordance with the code of ethics that appears in the trust report according to which we operate. Expressions of violence, racism, incitement or any other inappropriate discourse are filtered out automatically and will not be published on the site.