Meta's revenue up 3% YoY in Q1 of CY23

Meta Platforms announced financial results for the quarter-ended March 31, 2023, of CY23 on April 27. In the January to March period of CY23, the company’s revenue from operations surged 3% year-on-year (YoY) to $28.65 billion as against $27.9 billion in the same period last year. The company’s total cost and expenses surged 10% YoY to $21.42 billion during the period under review, as against $19.4 billion in the same period last year.

"We had a good quarter and our community continues to grow. Our AI work is driving good results across our apps and business. We're also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long-term vision," says Mark Zuckerberg, founder and CEO, Meta Platform.

However, the company’s net income dipped 24% to $5.7 billion during the quarter under review as against $7.5 billion in the same period last year. In the first quarter of 2023, ad impressions delivered across Meta’s apps such as Facebook, WhatsApp and Instagram increased by 26% YoY and the average price per ad declined by 17% YoY. The daily active users (DAP) across all Facebook, WhatsApp and Instagram, surged by 5% YoY to 3.02 billion in March. Of this, daily active users for Facebook stood at 2.99 billion during the month under review.

The monthly active users as of March 31, 2023, across Facebook, Instagram and WhatsApp stood at 3.81 billion. Of this, Facebook’s monthly active users stood at 2.99 billion.

This is the first quarter results of financial earnings after the company announced the second round of layoffs earlier this year. Meta says that the company’s headcount, including those who would be impacted by the 2023 layoffs stood at 77,114 as of March 31. Last month, Meta said that the company would be resorting to 10,000 job cuts across the Family of Apps (FoA) and Reality Labs (RL) segments, as part of its restricting plan. "In connection with these layoffs, we expect to incur total pre-tax severance and related personnel costs of approximately $1 billion, of which $523 million was recognized during the first quarter of 2023 and the remaining charges will be substantially recorded by the end of 2023," the company says on Thursday.

During the first quarter of 2023, total restructuring charges under the company’s FoA segment stood at $934 million and the RL segment at $210 million. "Excluding these charges, our operating margin would have been four percentage points higher and our diluted EPS would have been $0.44 higher for the first quarter of 2023," the company says.

For the second quarter of CY23, the company expects total revenue to be in the range of $29.5 billion to $32 billion. For CY23, the company anticipates total expenses to be in the range of $86 billion to $90 billion.

"This outlook includes $3-5 billion of restructuring costs related to facilities consolidation charges and severance and other personnel costs. We continue to expect Reality Labs operating losses to increase year-over-year in 2023," the company says.

The company expects capital expenditures in CY23 to be in the range of $30 billion to $33 billion. "This outlook reflects our ongoing build-out of AI capacity to support ads, Feed and Reels, along with an increased investment in capacity for our generative AI initiatives," the company says.

Zuckerberg says the company will be "introducing AI agents to billions of people in ways that will be useful and meaningful."