Meta Platforms and its investors are enjoying a glowing earnings report and high stock values—coming out of a period of tech layoffs, stock buybacks, hemorrhaging operational costs, and metaverse failures.
- Meta Platform’s stock has risen 15.2% since Thursday morning, as Wednesday’s quarterly earnings report came in hot.
- The company grossed $29.5 billion to $32 billion in revenue, after projecting $29.48 billion.
- Stocks are trading about $239 per share—the highest the company has attained since February 2022, and a 164% increase from its yearly low of $90 in November 2022.
- Meta’s widespread layoffs were partially responsible for the bump, analysts say, with costs decreasing from nearly $101 billion in October to as low as $86 billion for this year. At least 21,000 of its 87,000 have been laid off since November.
Why It’s News
As we previously reported, 2023 has been a very good year for Meta Platforms. Its previous quarterly earnings report came in with higher-than-expected revenue. The company’s value grew for the first time since August 2021, and it has continued to see improvements. As a result, it was able to perform two significant stock buybacks of $9.22 billion in the first quarter and $41.73 billion in March.
A notable offset for Wednesday’s good news was the report that Reality Lab’s operating losses exceeded expectations, with the virtual reality laboratory costing $3.99 billion against projections of $3.8 billion. The company is likely beginning to marginalize Reality Labs and the Metaverse to offset costs as it shifts focus from virtual reality research to artificial intelligence.
Meta has pivoted significantly in the past several months, shifting the direction of the company toward more pressing technologies and reducing operational costs. The company made the mistake of bringing on 10s of thousands of additional employees during the pandemic, which has proved unsustainable. It may continue with more layoffs later this year.
Investors have praised the company’s decisive response, as Meta has pronounced 2023 the “Year of Efficiency.”
“We had a good quarter, and our community continues to grow. Our AI work is driving good results across our apps and business. 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,” says Meta CEO Mark Zuckerberg.