Meta, formerly Facebook, reported better than expected advertising revenue against strong competition and an uncertain global economy.
Analysts were surprised at the 3% rise to $US28.6 billion in total revenue (Instagram, Facebook and WhatsApp) for the March quarter.
The company is forecasting June quarter total revenue to be $29.5 billion-$32 billion.
Shares in Meta jumped almost 14% to $US238.56.
The global social media platform, caught in a global slide among digital players, has been cutting expenses and axing jobs.
And Meta is continuing to keep a tight rein on its expenses, with one eye on a volatile world.
Restructuring and layoffs continue and from May will focus on Meta’s business groups.
CEO and founder Mark Zuckerberg says Meta is seeing growing momentum.
More than 3 billion people use at least one of Meta’s apps each day. Facebook hit 200 million daily actives in the US and Canada after last quarter reaching 2 billion daily actives worldwide.
“The goals of our efficiency work are to make us a stronger technology company that builds better products faster, and to improve our financial performance to give us the space in a difficult environment to execute our ambitious long term vision,” Zuckerberg told analysts in a briefing.
“When we started this work last year, our business wasn't performing as well as I wanted. But now we're increasingly doing this work from a position of strength.
“Even as our financial position improves, I continue to believe that slowing hiring, flattening our management structure, increasing the percent of our company that is technical, and more rigorously prioritising projects will improve the speed and quality of our work.
“I also believe that a stronger financial position will enable us to weather a volatile environment while remaining focused on our longer term priorities.”
Will Easton, managing director Meta Australia and New Zealand, says user engagement in Australia, like Meta’s broader business, is at an all time high, driven by investments in AI recommendations and ranking systems.
“As we invest in new ad tech, we’re also hearing feedback from Australian advertisers that ad performance and return on advertising spend continues to grow, delivering meaningful returns for their businesses,” he says.
Debra Aho Williamson, principal analyst at Insider Intelligence, says the year of efficiency is off to a stronger than expected start for Meta.
“In this economic environment—and after the disaster that was 2022—3% year over year revenue growth is an accomplishment,” she says.
“Meta’s strong guidance for Q2 revenue is another indicator that the company may be starting to come out of the woods."
"But Meta can’t afford to sit still in this environment; it must finish rebuilding its ad targeting capabilities after the Apple privacy debacle, make a strong case to advertisers for why they should invest in Reels instead of TikTok, and keep restless creators in the fold.
“It also needs to confront the rise of retail media networks and Amazon, which will scoop up ad spending from companies that want to reach consumers closer to the point of purchase. If it does these four things, it will emerge stronger as the year of efficiency progresses."
Insider Intelligence forecasts Meta's worldwide ad revenue to grow 6.3% this year to $120.82 billion.
That gives it a 20.1% share of the global digital ad market and second place behind Google with 28.4%.
Meta's March quarter 2023 numbers:
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