The debate about whether Meta is in decline can be quieted down, at least for now.
After three straight quarters of falling revenue, Meta, the company formerly known as Facebook, on Wednesday reported That first-quarter revenue rose 3 percent, to $28.6 billion, from a year ago. Profit fell 24 percent to $5.7 billion, partly due to restructuring charges.
The results, which exceeded Wall Street expectations and Meta’s own guidance, were bolstered by growth in users. The company added 37 million daily users to Facebook, its flagship app, up 4 percent from the previous year and a turnaround from its first user drop it reported in early 2022.
“We had a good quarter and our community continues to grow,” said Mark Zuckerberg, CEO of Meta, in a statement. He added that the company was “becoming more efficient so that we can build better products faster and put ourselves in a stronger position to deliver on our long-term vision.”
The performance comes amid a tumultuous year for the social media company, which is trying to revamp itself after experiencing declining revenue and what Zuckerberg has called an overstretched workforce.
He has been moving the company into the so-called immersive world of the metaverse, an untested market. Meta also faces stiff competition from adversaries such as TikTok, which is stealing ad dollars from social media companies, and Apple, which has screwed up Facebook’s ad tech with privacy updates to iOS software.
Those challenges, which follow years of rampant growth at Meta, have raised questions about the future of the company and its vulnerabilities.
In a bid for change, Zuckerberg has embarked on what he calls an “efficiency year” and has reined in spending and cut employee ranks by more than 21,000 people, or about 30 percent. Meta’s share price, which has risen about 9 percent in after-hours trading, has risen 63 percent since the company announced a first round of layoffs in November.
Those moves have also led to a drop in employee morale. Workers wonder if they will be among those eliminated in the Meta workforce selection. Zuckerberg has said he is trying to weed out “managers running managers,” the result of a glut of middle managers fueled by overzealous hiring in the pandemic era. He has announced two rounds of layoffs so far, with more cuts expected next month.
The company said its employees totaled 77,114 as of March 31, down 1 percent from a year ago.
Even with the latest results, Meta’s challenges continue. The company’s costs continued to rise, jumping 10 percent, to $21.4 billion, from a year ago and outpacing revenue growth.
As enthusiasm for the metaverse has died and shifted to artificial intelligence, Meta is also trying to position itself as a leader in the field, leveraging years of investment. Mr. Zuckerberg attends weekly meetings with his executive team, focused specifically on the company’s AI strategy. He has told investors that the company’s AI is helping suggest more relevant photos and videos to people on Instagram and Facebook.
“Our AI work is generating good results in our applications and businesses,” Zuckerberg said.