For the first time in more than a year, Meta has reported an increase in quarterly revenue.
Revenue was up 6% year-over-year on a constant currency basis, reversing a streak of under-performing quarters due to Apple’s ATT and a pullback in advertiser spending globally. The company still ended the quarter in a loss, however, due to a 10% increase in expenses that largely came from $1.14 billion USD in charges it took related to restructuring efforts and layoffs.
Daily active users across the company’s platforms increased by 5% year-over-year, with monthly active users also up 5%. Average revenue per user, however, dipped slightly to $7.59 USD from $7.72 a year ago.
In a call with investors, CFO Susan Li said the growth was largely due to strong spending from advertisers in China, particularly those in commerce verticals and brands targeting users in other markets as COVID-related restrictions ease in the country. Outside of that, however, she said many advertiser categories continue to pull back on spending, particularly in financial services and technology.
Ad revenue in the quarter was up 7% in the quarter on a constant currency basis, with 6% growth in North America and 4% growth in Asia Pacific.
The total number of ad impressions served across Meta services increased 26%, while the average price per ad decreased 17%. Li said the decline in pricing was primarily driven by strong impression growth in lower-monetizing platforms (such as Reels, which the company expects to be neutral to ad revenue by the end of the year), as well as lower advertising demand and foreign currency rates.
Li said that Reels are viewed for longer than content in feeds or stories on Facebook and Instagram, providing fewer opportunities to serve ads, but the company is incrementally growing monetization per time spent on Reels, with a 24% increase in time spent on Instragram since launching Reels.
A big theme during the call with investors was AI, particularly when it came to driving both performance for advertisers and efficiency within the company. Li said that while Meta is continuing to invest in things that were meant to compensate for changes brought by Apple’s ATT, such as the Conversions API, the current focus is improving ad performance with the current signals it has available to it.
AI is being used in the company’s Advantage+ Shopping product, which Li said has continued to gain adoption and positive feedback, and points to opportunities for more “tools that make it easier for businesses to not only find the right audience for their ad, but also optimize and eventually develop their ad creative.” CEO Mark Zuckerberg added that a big opportunity was for Meta to help advertisers develop new creative using AI, as well as in business-focused chat and messaging services.
