Meta, formerly Facebook, saw its slowest revenue growth since it went public a decade ago during the first quarter of the year. Still, the company outperformed analyst expectations and revenue was up 7% to US$27.9 billion. These better-than-expected results sent Meta’s stock up over 18% after-hours.
Aside from the intensifying competition and regulatory battles, why did Wall Street have relatively low expectations, though? Well, Apple has been implementing new rules about ad-tracking, and since Apple users make up a massive portion of Facebook users, they sort of have to take the L and deal with lower ad revenue.
“We had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow,” said Mark Zuckerberg, Meta founder and CEO, in a statement from last year. “I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse.”
“This outlook reflects a continuation of the trends impacting revenue growth in the first quarter, including softness in the back half of the first quarter that coincided with the war in Ukraine,” Meta said.