Meta Q2 Sales Jump 22% in Wall Street Beat as Its AR/VR and...
Meta’s social-media empire continues to thrive in the digital advertising space, with its metaverse and AR/VR business seeing significant growth despite incurring larger losses. The company, known for its popular apps such as Facebook, Instagram, and WhatsApp, reported a remarkable 22% year-over-year increase in top-line revenue, totaling $39.07 billion, primarily driven by advertising. Net income for the quarter stood at $13.47 billion, translating to $5.16 per share. Wall Street analysts had anticipated revenue of $38.31 billion and earnings per share of $4.73, according to data from financial provider LSEG.
Strong Performance and Future Expectations
Meta's co-founder, CEO, and chairman, Mark Zuckerberg, expressed his satisfaction with the company's performance, highlighting the advancements in Meta AI and its projected position as the world's most utilized AI assistant by the year's end. Zuckerberg also mentioned the release of a cutting-edge open-source AI model, the positive reception of Ray-Ban Meta AI glasses, and the overall growth across Meta's suite of apps.
The company forecasts a total revenue range of $38.5 billion to $41 billion for the third quarter of 2024, in alignment with analyst forecasts.
Reality Labs and AI Investments
Meta's Reality Labs division, housing products like the Quest AR/VR headset and metaverse initiatives, reported increased losses in Q2. Despite a 28% rise in quarterly sales to $353 million, the operating loss reached $4.49 billion, up from $3.74 billion in the previous year. Reality Labs has accumulated a total loss of $59.5 billion since the beginning of 2019. Meta anticipates a substantial surge in operating losses for Reality Labs in 2024, attributed to ongoing AR/VR product development and ecosystem scaling efforts.
In addition to AR/VR investments, Meta is heavily focused on artificial intelligence. The company revised its 2024 capital spending forecast to $35 billion-$40 billion, emphasizing accelerated investments in AI-related infrastructure. Meta is poised for significant capital expenditure growth in 2025 to support AI research and product development.
User Metrics and Future Projections
As of Q1 2024, Meta ceased reporting average monthly users across its app portfolio and specific user figures for the flagship Facebook app. Daily active users for Meta's apps collectively averaged 3.27 billion in June 2024, marking a 7% year-over-year increase.
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