Meta Platforms, the parent company of popular social media platforms Facebook, Instagram, and WhatsApp, has reported impressive financial results for the second quarter of the year. The company’s revenue grew by a significant 11 percent, reaching a staggering $32 billion for the quarter ending on June 30.
A major contributor to Meta’s growth was its digital advertising revenue, which rose by an impressive 12 percent during the same period. This rate of growth outpaced that of Google, which reported a 3 percent increase in ad revenue for the same quarter.
Breaking down the digital advertising revenue generated by Meta Platforms in Q2, it shows that $14,131 million came from the United States and Canada, $7,268 million from Europe, $6,435 million from the Asia Pacific region, and $3,664 million from the Rest of the World.
Facebook’s monthly active user base touched $270 million in US & Canada, $409 million in Europe, $1,349 million in Asia-Pacific, and $1,002 million in Rest of World. ARPU from Facebook reached $10.63 in Q2 2023 vs $9.62 in Q1 2023.
These financial results from Meta Platforms come right after a strong performance from Google’s parent company, Alphabet. Despite broader economic concerns, both companies’ solid financial performance indicates that consumers and advertisers are continuing to spend on digital platforms.
However, Meta has indicated that it expects expenses to rise in the years 2023 and 2024. The company attributed these anticipated cost increases to factors like legal fees and the need for increased spending on infrastructure, especially in the highly competitive field of artificial intelligence.
To accommodate the increased expenses, Meta Platforms has made some strategic changes, including aggressive cost-cutting in various areas of the company. For example, there were reductions in safety teams and other basic business functions.
Mark Zuckerberg, the Chief Executive of Meta, expressed his optimism about the company’s future. He highlighted strong engagement across their apps and unveiled an exciting roadmap that includes the launch of products like Llama 2, Threads, Reels, and new AI offerings. Additionally, Meta plans to release the highly anticipated Quest 3 this fall.
Despite the rising expenses, Meta Platforms is managing its capital expenditure. The company has adjusted its forecast for 2023, pushing some artificial intelligence-related costs into 2024, when an increase in capital expenditure is expected.
Notably, the financial report for the second quarter also revealed that Meta Platforms incurred significant legal costs, including a massive fine of 1.2 billion euros ($1.3 billion) by Ireland’s Data Protection Commissioner in May. The fine was imposed for the company’s alleged transfer of user information to the United States.
Headcount was 71,469 as of June 30, a decrease of 14 per cent year-over-year. Approximately half of the employees impacted by the 2023 layoffs are included in the reported headcount.
Meta expects the third quarter (Q3) 2023 total revenue to be in the range of $32-$34.5 billion.
It also anticipates that the full-year 2023 total expenses will be in the range of $88-$91 billion, increased from the prior range of $86-$90 billion. This outlook includes about $4 billion of restructuring costs related to facilities consolidation charges and severance and other personnel costs.
Meta Platforms’ strong financial performance in the second quarter demonstrates the continued popularity of its platforms and the potential for growth despite the challenges posed by legal matters and increasing expenses.
