Do you hear that? It's the sound of every Meta executive sighing relief, because unlike last quarter, Facebook's daily active users are up.
Meta has reported its quarterly earnings for the second time. Last time, the Facebook platform reported its first decline in its eighteen-year history, but now, it boasts 1.96 billion DAUs, up from 1.92 billion last quarter.
The star of the show is Meta's family of apps. The revenue from these apps is helping to fund Meta's projects in virtual reality, which he is betting will become the company's crown jewel in the future.
Was it worth changing the company's name? Reality Labs lost over $10 billion last year and in the first quarter of this year.
It won't be until those products really hit the market and scale in a meaningful way that this will be a big revenue or profit contributor to the business.
In-app purchases won't move the needle much if the platform doesn't significantly woo more users. Soon, Meta will roll out a web version of Horizon Worlds that will be open to people who don't have $300 to drop on a headset. The company's strategy is to develop the metaverse.
It's expensive to build this. It is something that has never been built before. Since ad revenue hasn't grown as fast as expected, Meta's overall profitability won't grow in 2022.
The Russian War on Ukraine has caused a downward trend in ad revenue at Meta. Overall, Meta's revenue rose by 7%, missing analysts' expectations. The Asia-Pacific region, where ads cost less, is where Meta's apps are growing the most.
The headsets themselves are the most promising money-maker from Reality Labs. The company is looking toward releasing its newest headset later this year, after the Meta Quest 2 had a big boost in sales during the holiday season.
The new, premium headset will be focused on work use cases and eventually replacing your laptop or work setup. He said we can expect more news on the headset in the months to come.
Meta faces competition from TikTok as it tries to overtake the platform as the leader in short-form video. 20% of the time that users spend on the photo-sharing site is spent on Reels, which is the result of the company's investment in the clone of TikTok. 50% of the time that users spend on Facebook is spent on video.
The company is positioning itself as the premier company for building the future of social interaction and the metaverse.
Facebook isn’t growing anymore
Meta’s Oculus VR companion app gained ~2M downloads since Christmas
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