There has been a rebound in online advertising post pandemic.
Facebook and Instagram's parent company, Meta Platforms, posted stronger-than-expected results for the second quarter on Wednesday, helped by a rebound in online advertising after a post-pandemic slump.
The social media giant earned $7.79 billion (€7.07 billion) in the April-June period, up 16% from $6.69 billion (€6.08 billion) over the same period a year earlier.
Revenue jumped 11% to $32 billion (€29 billion) in the year-ago quarter. It's the first double-digit revenue growth for the company since 2021.
Analysts, on average, were expecting earnings of $2.91 (€2.64) per share on revenue of $31.08 billion (€28.2 billion), according to a poll by FactSet Research.
Squeezed by a slump in online advertising and uncertainty around the global economy, Meta has cut more than 20,000 jobs since last November. It had 71,469 employees as of June 30, down 14% from a year earlier.
Many other tech firms, including Google's parent company Alphabet and Amazon, have also cut thousands of jobs.
“There’s a lot to feel good about when it comes to Meta right now. It has been able to maintain decent growth in monthly and daily active users across both Facebook and its family of apps, and it has seen strong performance from Advantage, its AI-driven suite of ad automation tools,” said Debra Aho Williamson, an analyst with Insider Intelligence.
Meta's rebound followed a solid earnings report from Alphabet a day earlier.
Meta's stock jumped $14.45 (€13.12), or 4.8%, to $313.02 (€284.42) in after-hours trading in response to the results.
Some 3.88 billion people worldwide used at least one of the group's platforms (Facebook, Instagram, Messenger and WhatsApp) every month in the second quarter.
New ventures and challenges
Williamson said Meta was still facing challenges, however, as its marketing share in digital advertising should drop due to the progress of TikTok and Amazon.
Still, Meta launched a new text-based conversation app called Threads in the US and the UK as a rival to Twitter, which has been struggling following a takeover by Elon Musk last year.
But Meta's Reality Labs, the unit responsible for developing augmented and virtual reality devices and applications, lost $3.7 billion (€3.36 billion) in the second quarter. It has lost more than $21 billion (€19 billion) since 2022, reported CNBC.
Meta has also been joining other tech companies such as Google and Microsoft in investing in generative AI.
Meta announced last week that it would make its artificial intelligence system Llama 2 free for research and commercial use.