Tech giant Meta is the latest company to beat Wall Street revenue expectations as the number of people using its platforms grew, but Metaverse losses mounted and AI spending rose.
Revenue at the WhatsApp, Instagram and Facebook parent company was up 11% to $32bn (£24.7bn), greater than the 7% growth expected by analysts.
User numbers were up both on Facebook and Meta platforms more broadly.
Daily active users on Facebook grew 5% to 2.06 billion on average for last month. Across the family of Meta products daily active people averaged 3.07 billion in June, up 7% on a year earlier.
But losses are to grow in some of the biggest parts of the business the company said in its trading update for the second quarter of 2023.
Meta’s signature virtual reality project, the metaverse, will rack up further losses, the company said. Operating losses will “increase meaningfully” due to product development and investment in scaling up the virtual world.
As well as the metaverse, artificial intelligence (AI) will be a driver of increased spending next year, the results said.
The Q2 results also suggested Meta’s programme of job cuts may not have come to an end.
Head count fell 14% from June 2022 to the same month this year with about half of the staff impacted by the 11,000 job losses having been made redundant by the end of last month.
While the company said it had “substantially completed” planned layoffs, Meta said it was “continuing to assess facilities consolidation and data centre restructuring initiatives”.
Despite the drop in employee numbers, Meta said payroll costs will rise at it moves to employ “higher-cost technical roles”.
Greater expenses, in the region of $88-91bn (£68bn-70.3bn) for all of 2023, will also come due to legal costs recorded in the three month to the end of June, the results said, more than the $86-90bn previously expected.
In May Meta was slapped with a record fine of €1.2bn (£1.04bn) by the Irish data protection regulator.
It was the biggest fine ever levied for breach of the general data protection regulations (GDPR), which require the data holder’s permission before using their personal information.
The fine was incurred for transferring EU users’ data to the United States for processing, despite a 2020 verdict handed down by the highest EU court saying the data was insufficiently protected from US spying agencies.
Earlier this month Meta launched its rival to Twitter, the message posting app Threads which has more than 100 million users signed up in its first five days.