Meta's social media empire continues to generate substantial digital ad revenue, while its AR/VR and metaverse business incurs increasing losses.
The company, which operates Facebook, Instagram, and WhatsApp, reported $39.07 billion in revenue, a 22% year-over-year increase, driven almost entirely by advertising. Net income reached $13.47 billion, or $5.16 per share, surpassing Wall Street's expectations of $38.31 billion in revenue and $4.73 EPS, according to LSEG.
"We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year," said Meta co-founder, CEO, and chairman Mark Zuckerberg. He highlighted the release of Meta's first frontier-level open-source AI model, success with Ray-Ban Meta AI glasses, and growth across its apps.
The company forecasts Q3 2024 revenue between $38.5 billion and $41 billion, aligning with analyst expectations.
However, Meta’s Reality Labs segment, which includes the Quest AR/VR headset and metaverse initiatives, reported increased Q2 losses. The unit's sales rose 28% to $353 million, but it posted an operating loss of $4.49 billion, up from $3.74 billion a year earlier. Since 2019, Reality Labs has accumulated losses of $59.5 billion. Meta anticipates these losses to increase in 2024 due to ongoing product development in AR/VR and ecosystem scaling investments.
Meta is also heavily investing in artificial intelligence. In April, the company raised its 2024 capital spending forecast to $35 billion-$40 billion, up from $30 billion-$37 billion, due to accelerated AI infrastructure investments. Recently, Meta adjusted this forecast to $37 billion-$40 billion. While no 2025 guidance was provided, Meta expects significant capital expenditure growth next year to support AI research and product development.
As of Q1 2024, Meta no longer reports average monthly users for its apps or daily/monthly user figures for Facebook. In June 2024, daily active users across Meta’s apps averaged 3.27 billion, a 7% year-over-year increase.
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