Meta showed better-than-expected financial results for the first quarter of 2024, but this did not help the share price

Meta has shared its financial report for the first quarter of 2024. Despite better-than-expected results, the company’s shares still fell by 16% due to weak forecasts. This was reported by CNBC.

The company’s revenues grew by 27% to $36.46 billion compared to $28.65 billion in the same period last year. This is the fastest growth rate since 2021. Net income increased from $5.71 billion and $2.20 per share in 2023 to $12.37 billion and $4.71 per share in 2024. One of the reasons for the increase is that sales and marketing expenses decreased by 16%.

Meta expects second-quarter revenue to be between $36.5 billion and $39 billion. If we take the midpoint of $37.75 billion, this is about 18% growth, but it is still below the average analyst estimate of $38.3 billion.

During the report, Mark Zuckerberg spoke about investments in areas such as glasses and mixed reality, which are not yet making money. He also noted that investments in artificial intelligence are growing.

“On the upside, once our new AI services reach scale, we have a strong track record of monetizing them effectively,” Zuckerberg said.

Among other things, Facebook stopped reporting on daily active users and monthly active users, instead introducing the figure of “family daily active people.” As of March 2024, there were 3.24 billion such active people.

It was also reported that advertising revenue in the first quarter increased by 27% to $35.64 billion. Among other things, it was noted that the costs of Chinese discount retailers, which are pouring money into Facebook and Instagram, have increased sharply.

In addition, Zuckerberg has also led an initiative to rebuild the advertising business with a focus on AI. Meta CFO Susan Lee said in February that Meta is investing in artificial intelligence models that can accurately predict relevant ads for users, as well as tools that automate the ad creation process.

Where things are not going well for Meta is in the metaverse, where the company continues to lose money. Reality Labs, which develops the meta space, reported revenue of $440 million for the quarter and a loss of $3.85 billion, bringing its total losses since the end of 2020 to more than $45 billion.