The number of users at the Facebook group Meta grew faster at the beginning of the year, after a slump at the end of 2021. In March, 1.96 billion users accessed Facebook every day. This index of Daily Active Users (DAU) fell by one million to 1.93 billion in December. Despite the slight decline, this was interpreted as an alarm signal at the time. At the time, Meta admitted increased competition from the video app Tiktok as a key reason.
At least one of the group’s apps – including WhatsApp and Instagram – was used by 2.87 billion users every day. In the previous three months it was 2.82 billion. Group boss Mark Zuckerberg was pleased: “More people than ever have used our services. I’m proud of how our products serve people around the world.”
Sales growth at a low level
Things aren’t going as well for Meta as they used to. Revenues grew seven percent year-on-year to $27.9 billion in the first quarter. While that’s in line with its own guidance from earlier in the year, when Meta’s margin fell and the stock crashed. But it’s a low increase for the company — its first single-digit quarterly growth in the last decade. So Meta missed the expectations of the analysts.
Meta’s operating profit fell 25 percent to $8.5 billion and net profit fell 21 percent to $7.5 billion. That’s going out Metas data from Wednesday evening out. In turn, the group exceeds the forecasts of the experts, who had expected lower earnings per share. The result: the Meta share increased by more than 18 percent in after-hours trading. However, the price has fallen almost 50 percent since the beginning of the year.
Metaverse with a loss of billions
The Metaverse has only played a minor role in Meta’s sales so far. The app family with Facebook, WhatsApp and Instagram accounts for 97.5 percent of the revenues. The Reality Labs, which are responsible for the development of the Metaverse in the group, contribute revenues of only 695 million dollars. At the same time, this division writes a loss of three billion dollars – 62 percent more than a year ago.
Meta generates its income almost exclusively from advertising. Those sales are up 6 percent year over year to $27 billion. However, compared to the previous three months, the typically more profitable fourth quarter, advertising revenue is down 17 percent. Average earnings per user fell to $7.72 — the lowest since fall 2020.
Forecast: previous year’s level
Meta expects sales of between 28 and 30 billion dollars for the current quarter. This would mean that the proceeds would reach the level of the previous year, when 29 billion dollars were booked. The group also announces that it will reduce costs this year. So far, spending has been estimated at $90 to $95 billion. Meta is now expecting a range of $87 billion to $92 billion. (with dpa material)
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