Meta Platforms’ Stock Soars in Response to Exceptional Earnings and Reduced Expenses

On Wednesday, after market close, Meta Platforms (META) delivered first quarter results that exceeded expectations. The parent company of Facebook and Instagram also raised its forecast for the current quarter while reducing its expense outlook. Following the impressive report, shares of META rose by as much as 11% in after-hours trading, reaching their highest point since January 2022. META has previously stated that 2023 is its “Year of Efficiency” and announced that it has largely completed its 2022 layoffs, with potential for further layoffs this year.

Meta had previously announced layoffs in November and last month it confirmed the further cutting of 10,000 jobs. Below are Meta’s earnings figures and analysts’ estimates, compiled by Bloomberg, with the actual numbers followed by the estimated numbers:

Revenue: $28.65 billion actual versus $27.67 billion estimated

EPS: $2.20 actual versus $2.01 estimated

Advertising Revenue: $28.1 billion actual versus $26.76 billion estimated

Family of Apps Revenue: $28.3 billion actual versus $26.88 billion estimated

Reality Labs Operating Losses: $3.99 billion actual versus $3.8 billion estimated

Q2 Revenue: $29.5 billion-$32 billion actual versus $29.48 billion estimated

Meta CEO Mark Zuckerberg stated in a press release that the company had a successful quarter and expressed satisfaction with the growth of the community. Zuckerberg also touted the success of the company’s AI work and the progress being made towards becoming more efficient to build better products faster and solidify its position to deliver its long-term vision.

The digital advertising slowdown trend that previously affected Meta appears to be reversing, as ad impressions within the company’s “Family of Apps,” constituted by Facebook, Instagram, and WhatsApp, rose 26% YoY and ads revenue beat expectations. Meta has taken a ruthless approach to cost-cutting as it lowers its 2023 expenses estimates from $96 billion to $101 billion down to $86 billion to $90 billion, including restructuring costs. This also factors into losses at the Reality Labs division, which tallied losses of $13.7 billion in 2022 and are expected to continue.

The Company’s total headcount at the end of Q1 declined by 1% versus the same period the year prior, with a current headcount of 77,114.