The debate over whether Meta is in decline may settle down, at least for now.
After three straight quarters of declining revenues, Meta, the company formerly known as Facebook, reported Wednesday that first-quarter revenues were up 3 percent to $28.6 billion from a year ago. Earnings fell 24 percent to $5.7 billion, due in part to restructuring costs.
The results, which beat expectations from Wall Street and Meta’s own guidance, were supported by growth in user base. The company added 37 million daily users to Facebook, its major app, a 4 percent increase from a year earlier and a reversal from the first-ever drop in users it reported in early 2022.
“We’ve had a good quarter and our community continues to grow,” Mark Zuckerberg, Meta’s CEO, said in a statement. He added that the company is “becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver on our long-term vision.”
The appearance comes amid a year of turmoil for the social media company, which is trying to reinvent itself after dealing with declining revenues and what Mr. Zuckerberg has called an overcrowded workforce.
He has moved the company into the so-called immersive world of the metaverse, an untested market. Meta also faces fierce competition from adversaries such as TikTok, which steals advertising dollars from social media companies, and Apple, which has brought down Facebook’s ad technology with privacy updates to its iOS software.
Those challenges, which follow years of rampant growth at Meta, have raised questions about the company’s future and its vulnerabilities.
In an attempt at turnaround, Mr. Zuckerberg embarked on what he calls a “year of efficiency” and has reined in spending and slashed the workforce by more than 21,000 people, or about 30 percent. Meta’s share price, which rose about 9 percent in after-hours trading, is up 63 percent since the company announced its first round of layoffs in November.
Those moves have also led to a drop in employee morale. Workers wonder if they will be among those cut in Meta’s culls from the workforce. Mr. Zuckerberg has said he is trying to eliminate “managers managing managers,” the result of a glut of middle management driven by overzealous hiring in the pandemic era. He has announced two rounds of layoffs so far and further cuts are expected next month.
The company said its workforce totaled 77,114 as of March 31, down 1 percent from a year ago.
Even with the latest results, Meta’s challenges remain. The company’s expenses continued to climb, jumping 10 percent, to $21.4 billion from a year ago and outpacing revenue growth.
Now that the hype for the metaverse has died down and shifted to artificial intelligence, Meta is also trying to position itself as a leader in the field, leveraging years of investment. Mr. Zuckerberg attends weekly meetings with his executive team focused specifically on the company’s AI strategy. He has told investors that the company’s AI helps suggest more relevant photos and videos to people on Instagram and Facebook.
“Our AI work is driving good results in our apps and operations,” said Zuckerberg.
