Mark Zuckerberg, co-founder and CEO of Meta Platforms in July 2021.
Kevin Dietsch | Getty Images News | Getty Images
meta The company can thank Chinese retailers for helping its first quarter sales after three consecutive quarters of declining revenue.
As chief financial officer Susan Lee told analysts during the earnings call, the social networking giant “saw an uptick among advertisers in China targeting users and other markets, which we think will help reduce shipping costs and It was due to the easing of the Covid lockdown for those advertisers.”
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In other words, Chinese companies spent a lot of money in the three-month period ending in late March on Facebook ads targeted to consumers living outside the country. It’s a sign that China’s recent easing of its zero-Covid policy has indirectly benefited Meta, with Chinese companies using Facebook and Instagram’s massive worldwide reach to attract new customers .
Still, Meta’s sales increased only 3% year over year to $28.65 billion during the first quarter, underscoring that the digital advertising market is still in turmoil.
Li said Meta also saw strong demand in the quarter as Russia’s war in Ukraine passed its one-year mark by February. But she was not ready to say that the rest of the year would go smoothly.
Meta expects “a volatile macro environment” and “challenging regulatory environment” for the rest of the year, Lee said, referring to EU regulators, who continue to enforce tougher data privacy laws and requirements affecting the company. Let’s keep
But the mere fact that Meta was able to turn the tide on its declining sales after a harrowing period was enough to please investors, with shares of the company rising nearly 12% in after-hours trading.
Investors were also eager to see CEO Mark Zuckerberg publicize Meta’s “year of efficiency,” which will result in roughly 21,000 workers exiting the company by early summer.
Zuckerberg addressed the company’s recent spate of layoffs that affected tech workers last week and reminded analysts that more job cuts in May would affect business groups.
After May, Lee said the company “will resume hiring and we expect growth of more than 1 to 2% in 2024.”
Zuckerberg gave no indication of plans to slow spending on the Metaverse, the highly speculative bet on virtual worlds that sparked the company’s name change from Facebook announced in 2021.
Indeed, the company’s Reality Labs unit, which is building the virtual reality and augmented reality technologies needed for the yet-to-evolve metaverse, lost nearly $4 billion in the first quarter from $339 million in sales.
The Metaverse still remains a core priority for Meta, Zuckerberg said, though it is also working on new artificial intelligence technologies that could aid its advertising and business messaging services.
“A narrative has developed that we’re somehow moving away from focusing on the Metaverse division, so I just want to say that’s not accurate,” Zuckerberg said. “We have been focused on both AI and the metaverse for years and we will continue to focus on both.”
“The two areas are also related,” he said.
Watch: Meta beats on revenue, stocks pop nearly 10 percent on revenue beat
