Following three consecutive quarters of year-over-year revenue declines, the tech giant's Q1 2023 revenue grew by 3% YoY, with company shares surging over 9% in after-hours trading Wednesday -- a bellwether of potential recovery for the ad market.
Revenue grew by 3% YoY, with company shares surging over 9% in after-hours trading Wednesday -- another bellwether of potential recovery for the ad market.
The company reported $28.65 billion in quarterly revenue and $2.20 earnings per share -- surpassing analyst estimates of $27.65 billion and $2.02, according to Refinity.
Daily active users came in at 2.04 billion compared to the 2.01 billion expected, and Monthly active users -- at 2.99 billion -- were on par with estimates, according to StreetAccount.
“We had a good quarter and our community continues to grow,” said Meta CEO Mark Zuckerberg in a recent statement. “Our AI work is driving good results across our apps and business. We're also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision.”
In March, Meta laid off around 10,000 employees in three rounds of layoffs, after cutting 13% of its staff -- over 11,000 people -- in November.
Meta cites these recent layoffs and restructuring efforts as contributors to beating Wall Street expectations on revenue, earnings and user growth, but notes that the company is dealing with related charges -- taking on $621 million of additional pre-tax restructuring charges this quarter.
In addition, the company expects to incur total pre-tax severance and related personnel costs of around $1 billion, of which $523 million was recognized this first quarter.
Meta had a rough 2022, when it poured billions of dollars into its metaverse vision. The company lost $4 billion in Reality Labs, its augmented and virtual reality division, the Q1 2023 report shows -- posting a 30% larger loss than the first quarter of last year.
But Meta has seemingly recovered -- with its share price up 68% year-to-date -- making up for those major losses in 2022.
“Meta’s advertising platform is experiencing somewhat of a renaissance,” says Aidan Corbett, co-founder and CEO of eCommerce growth platform Wayflyer. “The return on advertising spend (ROAS) businesses are seeing on the platform has significantly improved.”
Corbett says Wayflyer data shows that this time last year its ROAS sat at 1.06x, compared with 1.73x now, a 63% increase year-over-year, “meaning online retailers are getting much more bang for their buck, so it’s no surprise that online merchants are flocking back to the platform to market their goods.”
Meta projects its first-quarter success will transfer into the second quarter, believing to experience continued growth in top-line revenue.