Meta Stock Climbs After Company Posts 11% Revenue Growth

On Wednesday, Meta, the parent company of Facebook, released its financial results for the second quarter ending in June, surpassing Wall Street’s expectations. The company reported a revenue of $32 billion, an 11% increase compared to the same period last year. Additionally, Meta’s profits for the quarter reached $7.79 billion, marking a 16% increase from the previous year and beating analysts’ estimates.

Meta’s recent results indicate a positive trend, with two consecutive quarters of revenue growth following a challenging 2022 marked by revenue declines.

Mark Zuckerberg, the CEO of Meta, expressed satisfaction with the company’s performance during the quarter. He stated, “We had a good quarter. We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall.”

The number of daily active users for Facebook rose to 2.06 billion, indicating a 5% year-over-year increase. Moreover, the monthly active user base on Facebook also saw a 3% year-over-year growth.

The positive results align with an uptick in demand for digital ads and growing investor enthusiasm surrounding artificial intelligence (AI) in the tech sector.

In February, Zuckerberg unveiled plans for a “year of efficiency” following Meta’s third quarterly revenue decline. The year was marked by intense competition, challenges from Apple’s app privacy changes, and decreased digital ad spending amid macroeconomic uncertainties. As part of the efficiency plan, Meta eliminated 11,000 jobs in November and announced another round of layoffs, affecting 10,000 employees in March.

Reflecting on the company’s progress, Zuckerberg stated, “The year of efficiency was always about two different goals: becoming an even stronger technology company and improving our financial results so we can invest aggressively in our ambitious long-term roadmap. Now that we’ve gotten through the major layoffs, the rest of 2023 will be about creating stability for employees, removing barriers that slow us down, introducing new AI-powered tools to speed us up and so on.”

The recent financial report comes shortly after Meta introduced its competitor to Twitter, Threads. The app gained a remarkable 100 million user sign-ups within a week of its launch. Zuckerberg acknowledged the strong start of Threads and the company’s focus on retention and further improvements.

Meta shares witnessed a 4% surge in after-hours trading immediately following the earnings results, highlighting the positive investor sentiment towards the company’s performance and future prospects.