What happened
Shares of Meta Platforms (META 3.45%) rose 13.4% in April, according to data provided by S&P Global Market Intelligence.
This rise means that shares of the social media company have nearly doubled year to date from just $125 to $240.
Image source: Getty Images.
So what
Meta Platforms released its latest set of quarterly earnings that breezed past analysts' estimates. Revenue, at $28.65 billion, was higher than the consensus estimate of $27.67 billion while earnings per share was almost 10% higher than the projected $2.01.
For the company's fiscal 2023 first quarter, revenue inched up 3% year over year while operating income fell by 15% year over year due to higher expenses. Net income slipped 24% year over year to $5.7 billion because of additional pre-tax restructuring charges of $621 million, but the social media company continued to churn out positive free cash flow of $7.1 billion for the quarter.
Investors were probably also happy to note that Facebook's user base continues to grow despite a slowdown in advertising revenue. Daily active users were up 3.9% year over year to 2 billion while monthly active users edged up 1.8% year over year to 2.99 billion.
Meta Platforms' "Year of Efficiency," so-termed because of the company's renewed focus on cost management and profitability, has included one round of layoffs back in November 2022. Three more rounds are slated that will result in approximately 10,000 staff leaving the company across the Family of Apps and Reality Labs business segments, with another $477 million of restructuring charges set to hit Meta Platforms' books in the remainder of this year.
Now what
Meta Platforms may have hit a stumbling block in implementing its growth plan, though. Earlier this month, the Federal Trade Commission (FTC) proposed to bar the company from monetizing children's data after it claimed that Meta Platforms violated a 2020 privacy order. This order implies that the social media outfit cannot monetize data from users below 18, which will affect its ability to launch new products or services that target this demographic. In essence, the company needs to convince the FTC that it is in compliance with the 2020 order and also obtain consent from users for facial recognition technology before it can move forward.
Elsewhere, Meta Platforms has hired a team of Norwegian engineers skilled in building artificial intelligence (AI) networking technology from British company Graphcore. These specialized engineers will help the company develop AI-related infrastructure that should assist its Facebook and Instagram products with targeted advertising. Meta Platforms is also keen to churn out products based on generative AI that can create human-like writing, art, music, and other content that will engage its customers and keep them loyal.
