Meta Platforms has announced a significant increase in sales for Q1 2023, despite falling advertising prices. The Facebook group’s user base rose to 3.02 billion across all its apps, which contributed to a 3% increase in sales to $28.6 billion. However, operating profit fell by 15% to $7.2 billion, while net income was down by 24% to $5.7 billion. The company’s costs have continued to rise, particularly for Metaverse. The department is responsible for nearly $4 billion in operating losses, although the company expects these losses to increase through the year.
Despite the falling advertising prices, Meta was able to increase its advertising revenue by 26% through the simultaneous increase in the amount of advertising played out. This has been a common challenge among online advertising giants, with Google’s parent company Alphabet experiencing similar issues. However, Alphabet has seen an increase in sales and has maintained its advertising sales.
For Q2 2023, Meta has forecasted sales of $29.5-$32 billion, which would be a 2%-11% increase from the same period last year, when its profits fell. The forecast is higher than expected, with analysts predicting just $29.5 billion. The news has given investors confidence, with the stock price up nearly 12% in after-hours trading. Although the stock price is rising since January, it is still around 30%-40% below the highs of H2 2021.
