For the first quarter of this year, Meta, the company that owns Facebook and Instagram, reported a profit of $5.7 billion (£4.6 billion), exceeding analysts’ expectations for a time when many jobs were lost.
The company claimed that artificial intelligence (AI) was “driving good results” throughout its operations.
While the number of monthly users of Facebook increased to just under three billion, total revenue was $28.6 billion.
“Our community continues to grow,” said Mark Zuckerberg, the company’s CEO.
“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,” he added.
No longer behind in building AI
Meta sees “an opportunity to introduce AI agents to billions of people in ways that will be useful and meaningful,” Mr. Zuckerberg told investors.
Although he didn’t go into much detail, he did say that Meta was “exploring chat experiences in WhatsApp and Messenger, visual creation tools for posts in Facebook and Instagram and ads, and over time video and multimodal experiences as well.”
Due to the industry’s overabundance of hype surrounding its capabilities, the company plans to commercialise its privately-run generative AI and join Google in finding useful applications for the technology.
Meta established Facebook’s AI Research lab in 2013, but hasn’t yet made significant strides in this field like some other major tech companies, like Microsoft, have.
However, Mr Zuckerberg insisted that Meta was “no longer behind in building our AI infrastructure” and declared that generative AI products from Meta, which can instantly create sentences and graphics, would be made available in the coming months.
The decision, he continued, would not compromise Meta’s virtual reality initiative, the metaverse.
Last quarter, the Reality Labs division of Meta reported a $4 billion net loss, and the company stated that it anticipated “operating losses to increase year over year in 2023.”
The “narrative that has developed that Meta is moving away from the metaverse,” according to Mr. Zuckerberg, was “not accurate,” and it was still intended to introduce the newest Quest VR headset later this year.
Cost-cutting pays off
The moment when Meta has reduced projects and jobs also happens to be when the financial results are positive. 2023 was supposed to be “a year of efficiency,” according to Mr. Zuckerberg.
When it comes to downsizing, Meta has been the most aggressive big tech company in the US, eliminating more than 20,000 positions, or over a quarter of its total global staff, in a matter of months.
“The year of efficiency is off to a stronger than expected start for Meta,” said Debra Aho Williamson, chief analyst at Insider Intelligence.
After the catastrophe of 2022, she continued, “3% year over year sales increase is an accomplishment in this economic scenario.
Zuckerberg described 2022 as “a humbling wake-up call” and advised “preparing ourselves for the worst.”
“You have to take your hat off to Mark Zuckerberg and Meta given the transformation of the business over the last six months,” said Ben Barringer of the investment management company Quilter Cheviot.
“Zuckerberg’s ‘year of efficiency’ is succeeding, as they say. These results significantly exceed forecasts, and given the strengthening macroeconomic environment, Meta should continue to recover favourably.