Meta Earnings Relief

Shares of Meta Platforms rise following a better-than-expected earnings report

Shares of Facebook parent Meta Platforms (FB) rose nearly 16% in pre-market trading after the company posted better-than-expected profit and users of its social media platforms, which include Facebook, Instagram, and WhatsApp.

After Google parent Alphabet reported its ad revenue for its YouTube video business showed weak sales growth, concerns rose that Meta Platforms would face a similar weakness.

Meta missed earnings expectations but added users for the first quarter. Daily active users (DAU) increased 4% to nearly 2 billion users in the quarter. Last quarter, the company reported Facebook lost 1 million DAU. The loss in users along with a sharper-than-expected drop in profits and a gloomy outlook sent shares sinking 40%. 

Meta did post its slowest revenue growth in the first quarter since going public a decade ago, as it faced growing competition from rivals like TikTok and dealt with the impact of Apple’s new privacy policies. The company had warned that those new tracking changes would cost it $10 billion this year. 

Still, Meta missed Q2 revenue expectations, with the company saying it will have revenues from $28 billion to $30 billion, compared to analyst forecasts of more than $30 billion. 

Meta shares are still down nearly 48% this year.

Meta was able to buck the trend of declining user engagement last quarter as daily active users (DAU), actually increased, in a reversal from the fourth quarter. That's a good sign for Meta's advertising revenue, which is still at risk given changes to Apple's privacy policies," stated Caleb Silver, Investopedia's editor-in-chief.

Meta (FB) Stock YTD
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