The parent company of Instagram and Facebook, Meta, has reported a significant surge in profits this spring, thanks to soaring sales of adverts on its platforms. The company announced that revenue rose to over $39 billion in the three months leading up to June, marking a 22% increase from the same period last year.
Despite heavy investments in artificial intelligence (AI) projects, Meta’s profits jumped to nearly $13.5 billion. The company’s founder and chief executive, Mark Zuckerberg, expressed satisfaction with the strong quarter and highlighted the progress of their AI system, which is on track to become the most used AI assistant globally by the end of the year.
Meta has been heavily investing in AI, augmented reality, and virtual reality products, such as their headsets that allow users to immerse themselves in games and exercise classes. The company’s Reality Labs unit, responsible for developing these products, reported a loss of $4.5 billion, higher than analysts had anticipated.
Despite the financial success, Meta recently agreed to a $1.4 billion settlement with the state of Texas over allegations of improper data collection. The company also announced plans to spend up to $40 billion this year on AI development, with continued high spending expected in 2025.
Analysts have praised Meta’s strategic moves, such as introducing ads on Reels to compete with TikTok, and believe the company is well-positioned to deliver on AI tools. While some have raised concerns about Meta’s aggressive spending, others see it as a necessary step to maintain its competitive edge in the tech industry.
Meta has also been streamlining its operations by cutting thousands of posts, reducing its global workforce to 70,799 employees. However, the company’s chief financial officer, Susan Li, indicated that the headcount is expected to increase significantly by the end of 2024.
Overall, Meta’s latest financial results have impressed investors and analysts, showcasing the company’s ability to capitalize on the growing demand for online advertising and innovative technology solutions.
