Meta has exceeded Wall Street’s expectations for second quarter (Q2) 2024 report in revenue and profit, after issuing a better-than-expected forecast for the period.
The tech giant posted a revenue of $39.07 billion, compared to $38.31 billion expected. It posted an earnings per share of $5.16 vs $4.73 per share expected. Capital expenditures were $8.47 billion, below the $9.51 billion analysts estimation.
Meta revenue growth reflects a 22% increase recorded from the previous year earlier which it posted a revenue of $32 billion. Net income jumped 73% to $13.47 billion from $7.79 billion, or $2.98 a share, a year earlier.
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
The tech giant impressive result, points to continued share gains in the digital ad market, the company’s core business. Advertising revenue, which comes largely from the Facebook and Instagram apps, rose 22% from a year earlier.
Also, it is worth noting that Meta’s financial performance has continued to improve greatly, partly due to the aggressive cost-cutting measures implemented in late 2022. Recall that in February 2023, Meta declared it the “year of efficiency” during the company’s fourth-quarter earnings call.
The company’s CEO Mark Zuckerberg stated that Meta was returning to its roots, advertising, which was followed with massive job cuts that saw about 21,000 jobs lost over multiple round of layoffs. This strategy impacted Meta’s operating income which climbed 58% from a year earlier to $14.9 billion, and Meta’s operating margin expanded to 38% from 29% during the year-earlier period.
While it has continued to operate a lean strategy, the company has shifted its spending to investments in advanced technology like Artificial Intelligence (AI) and the virtual reality and augmented reality tech needed to underpin the metaverse. This has played out positively, as a key factor in Meta’s financial success is its substantial investment in artificial intelligerce (Al). The company’s Al initiatives have significantly enhanced ad targeting and content recommendations, which in turn have boosted user interaction and ad revenues. Notably, Al-recommended posts have become a major driver of engagement on Facebook, leading to a 7% increase in user time spent on the platform.
Additionally, Meta’s Al advancements, such, as the introduction of the Llama 2 large language model, are positioning the company as a significant player in the Al space. These innovations are not only enhancing Meta’s current offerings but also setting the stage for future growth in Al-driven products.
Commenting on this, the company’s CEO Mark Zuckeberg said,
“We had a strong quarter, and Meta Al is on track to be the most used Al assistant in the world by the end of the year. We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta Al glasses, and we’re driving good growth across our apps.”
While Meta’s VR-focused Metaverse project has not yet become profitable, Zuckerberg emphasized the company’s continued commitment to this vision, highlighting the upcoming release of the Quest 3 headset.
The company has stated to continue to refine its plans for next year, as it expects significant capital expenditure growth in 2025, while it continues to deepen investment in AI and product development efforts. Like other tech giants, Meta is spending billions of dollars on Nvidia’s graphics processing units (GPUs), which are needed to train AI models and run hefty workloads.