Meta has presented a mixed bag of first quarter results for investors and shareholders to digest, after net profits at the social networking giant fell 21 percent.

Despite that, shares in Meta rose 20 percent, as Wall Street reacted with relief as Facebook signalled its intent to cut costs, and its key daily active users (DAU) metric for advertisers came in at 1.96 billion, slightly higher than the estimate of 1.95 billion, Reuters reported.

Meta had alarmed Wall Street investors in February when for the first time Facebook’s DAU metric declined, and the firm posted weaker than expected fourth quarter results, causing its share price to plunge more than 20 percent.

Facebook becomes Meta

Mixed results

So the first quarter results from Meta was keenly awaited by shareholders and investors alike.

For the first quarter ending 31 March, Meta posted a net profit down 21 percent at $7.5bn, from $95bn in the same year-ago quarter.

Despite this profit decline, it was less of a decline than Wall Street had been expecting.

Revenues meanwhile during the first three months of 2022 rose a modest 7 percent to $27.9bn from $26.2bn a year earlier, which is the firm’s slowest revenue growth in a decade.

“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” said Mark Zuckerberg, Meta founder and CEO.

“More people use our services today than ever before, and I’m proud of how our products are serving people around the world,” said Zuckerberg.

Digging down into the other metrics, Facebook’s daily active users (DAUs) were 1.96 billion on average for March 2022, an increase of 4 percent year-over-year.

Facebook monthly active users (MAUs) were 2.94 billion as of 31 March, an increase of 3 percent year-over-year.

Meta also noted that as of 31 March, its total workforce numbered 77,805, an increase of 28 percent year-over-year.

But it remains to be seen whether its headcount will be trimmed going forward, as Meta also lowered its projections for total expenses for the year, adjusting the upper limit of its expected spending from $95 billion down to $92 billion.

Looking forward, Meta predicted second quarter 2022 total revenue to be in the range of $28-30 billion.

Challenges ahead

Meta is facing some challenges posed by the likes of TikTok, as well as its monetisation of video content.

And Meta continues to face disruption to its vital advertising revenues, because of changes to Apple’s privacy policies.

Meta has previously told analysts that the impact of Apple’s privacy changes could be “in the order of $10 billion” for 2022.

Apple’s changes to its operating software give users the choice to prevent apps from tracking their online activity for adverts, making it harder for advertisers that rely on this data to develop new products and know their markets.

Facebook was the most vocal opponent of Apple’s privacy change, and launched an ad campaign in 2020 slamming Apple, claiming the change would be “devastating” to smaller businesses.

Meta meanwhile also noted ‘softness’ in its first quarter that ‘coincided’ with Russia’s illegal invasion of Ukraine.

Last month, Facebook and then Instagram was blocked by Russian authorities, although WhatsApp is still allowed.

Indeed, WhatsApp and Telegram are now the two last communication apps left standing in Russia.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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