Meta, formerly known as Facebook, reported strong financial results for the second quarter of 2023. The company’s total revenue reached $32 billion, an 11% increase from the previous year and at the top end of its guidance. Net income also saw a significant jump, reaching $7.8 billion, up 16% from $6.7 billion in the same period last year.
One of the key metrics that Meta focuses on is its monthly active users (MAUs). As of June 30, 2023, Facebook alone had 3.03 billion MAUs, a 3% increase from the previous year and up from 2.9 billion in the first quarter of the year. When considering all of Meta’s apps, including Instagram, WhatsApp, and Messenger, the total MAUs reached 3.88 billion, a 6% increase from the previous year.
In terms of revenue per person, Meta saw an improvement in the second quarter. After falling to $7.59 in the prior quarter, the average revenue per person on Meta’s apps increased to $8.32.
However, Meta has faced some challenges in recent months. In March, the company announced a significant round of layoffs, with 10,000 employees being let go. This came after an earlier round of layoffs in November 2022 that saw 11,000 job cuts. The layoffs resulted in a $523 million hit to Meta’s first-quarter earnings, and the total costs of these layoffs are expected to reach $1 billion by the end of the year. While Meta stated that it has “substantially completed” the planned layoffs, it continues to assess facility consolidation and data center restructuring initiatives. The company recorded restructuring charges of $705 million for the second quarter.
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As of June 30, Meta’s total headcount stood at 71,469, a 14% decrease from the previous year. However, it’s important to note that about half of the employees impacted by the 2023 layoffs are still included in the headcount.
In addition to the layoffs, Meta also made the decision to shut down original programming on Facebook Watch in April. This move was part of CEO Mark Zuckerberg’s “year of efficiency” plan, which aimed to streamline the company’s operations. These cost-cutting measures were driven by the belief that the current economic reality, characterized by higher interest rates, geopolitical instability, and increased regulation, will continue for years to come.
Despite the challenges, Meta has continued to release new offerings. In early July, the company launched Threads, its Twitter competitor that is closely connected to users’ Instagram accounts. Threads allows users to make text-based posts of up to 500 characters, as well as share photos and videos. Additionally, Meta’s Reels, a TikTok competitor hosted on Instagram, has been successful.
Looking ahead, Meta expects its operating losses in the Reality Labs segment, which focuses on augmented and virtual reality, to increase in 2023 and continue to grow significantly in 2024. This is due to ongoing product development efforts in augmented and virtual reality and investments to expand the ecosystem.
For the third quarter of 2023, Meta forecasts total revenue between $32 billion and $34.5 billion. Expenses for the full year are also expected to increase, with a range of $88 billion to $91 billion. These higher expenses are attributed to legal expenses and restructuring charges. In 2024, expenses are expected to grow further due to higher payroll expenses and infrastructure costs.
Overall, Meta’s second-quarter results show strong financial performance despite the challenges it has faced. The company’s focus on efficiency and the launch of new products bode well for its future growth and continued success in the social media and technology industry.
