Goal Wednesday reported a 27 percent increase in revenue and profit that more than doubled in the first quarter, as the company said it planned to spend billions of dollars more than expected on infrastructure to support its artificial intelligence efforts.
Revenue for the company, which owns facebook, instagram, WhatsApp and Messenger, was $36.5 billion in the first quarter, up from $28.6 billion a year ago and slightly above Wall Street estimates of $36.1 billion. million dollars, according to data compiled by FactSet. Profits were $12.4 billion, up from $5.7 billion a year earlier.
“It's been a good start to the year,” said Meta CEO Mark Zuckerberg, referring to the company's ai efforts and “healthy growth across all of our applications.”
But Meta's ai efforts, which require substantial computing power, come at a high price. The Silicon Valley company said it planned to raise its spending forecast for the year to between $35 billion and $40 billion, up from a previous estimate of between $30 billion and $37 billion. The move was driven by heavy investments in ai infrastructure, including data centers, chip designs and research and development costs.
Additionally, the company said it anticipated slightly lower-than-expected revenue in the second quarter compared to analysts' expectations, spooking investors and sinking the stock price in after-hours trading.
Meta shares fell more than 11 percent Wednesday afternoon after ending regular trading at $493.50.
Meta has increasingly positioned itself as poised to capitalize on artificial intelligence, a technology that has seen a surge in interest following an explosion in generative ai, which can produce text, video, audio and images. Meta has spent years investing in engineers and infrastructure to drive ai advancements, some of which have improved their advertising systems and increased their revenue.
After OpenAI launched the ChatGPT chatbot in 2022, Zuckerberg refocused Meta to plug ai-powered products into nearly every corner of his empire, from instagram and facebook search tools, to image-generating software and smart glasses. Last week, Meta unveiled new versions of its ai-powered smart assistant software that it has built into its apps.
Zuckerberg has also spent billions on graphics processing units, or GPUs, the chips that can perform complex calculations to power artificial intelligence systems.
But Meta also continues to burn billions of dollars pursuing Zuckerberg's vision of the immersive digital world of the metaverse. Reality Labs, Meta's hardware division, lost about $3.8 billion in the first quarter and posted $440 million in revenue, spending heavily on building virtual and augmented reality glasses and software, as well as the company's Horizon operating system. company for virtual reality headsets.
Meta has been in perpetual transition for the past four years. After a surge in users and activity during the initial Covid-19 lockdowns, the company's business was hit by a decline in the digital advertising market in 2022. Last year, Zuckerberg instituted a reduction program costs in an “efficiency year,” eliminating about a third of the company’s workforce and flattening layers of middle management.
Since then, revenue has increased, driven by an uptick in the advertising market and more people regularly returning to one or more of the company's apps.
