mark zuckerberg
Tom Williams/CQ-Roll Call, Inc (via Getty Images)
Meta reported first-quarter sales of $36.5 billion, up 27% from the same period last year and beating Wall Street expectations.
The company, which owns companies such as Facebook and Instagram, had forecast first-quarter sales of $34.5 billion to $37 billion. Mehta reported his $12.4 billion revenue, up 117% year-over-year.
“This year is off to a good start,” Meta founder and CEO Mark Zuckerberg said. “The new version of Meta AI with Llama 3 is another step towards building a world-leading AI. We are experiencing healthy growth across our apps and are making steady progress in building the Metaverse. It continues.”
Zuckerberg said on the earnings call that last week's rollout of the new Meta AI, an assistant that can be used within search to answer complex queries, make recommendations, create animations from things like still images, He said it is doing well and has tens of millions of pieces of content available. People who try it and give positive feedback. This tool can be used within his Facebook, Instagram, WhatsApp and Messenger.
He said that while the company previously viewed AI as a way to enhance its social media products, he now believes the company has the potential to become “the world's leading AI service.” .
“We're not just building great AI models that can build new, great social and commerce products. In fact, we're building cutting-edge models that will enable us to become the world's leading AI company. I think we're at a point where we can prove that,” Zuckerberg said.
He noted that 30% of posts in Facebook feeds are served by the company's AI recommendation system, which has doubled in the past two years. And now over 50% of his content on Instagram is recommended by AI.
Zuckerberg said the company will continue to invest in AI, including creator AI, which helps creators engage with their communities and fans, and business AI, which helps customers make purchases and receive customer support. The company has so far said it is leveraging AI to improve ad engagement and expand business messaging, but Zuckerberg said the division won't generate much revenue in the short term. He warned that there was a high possibility.
“While we remain focused on running the rest of our company efficiently as we grow our capital and energy spending on AI, the reality is that many of our existing resources Even as we shift to focus on AI, investment will still increase.''Meaningful efforts will be needed before we can see much revenue from these new products,'' Zuckerberg said.
Shares fell 13% in after-hours trading after Meta announced that it would “significantly increase investment in infrastructure over the next few years.” The company provided updated guidance for capital expenditures in 2024, expanding that range from $30 billion to $37 billion to $35 billion to $40 billion due to investments in AI. Mehta said he expects capital spending to continue increasing next year.
Zuckerberg on Wednesday compared Wall Street's reaction to the investment to the volatility the company has experienced with Reel and Stories, among others.
“Historically, investing in building these new scaled experiences in our apps has been a very good long-term investment for us and for the investors who have stuck with us. Again, the initial signs are very positive, but building cutting-edge AI will be a larger undertaking than any other experience we've added to the app, and will likely take several years.” Berg said.
In the first quarter, Meta reported that daily active family members, including use of all apps, averaged 3.24 billion in March 2024, an increase of 7% year over year. The company doesn't release daily and monthly active user numbers for Facebook or other individual brands, but Zuckerberg highlighted WhatsApp on the call, saying, “Daily active users and messages sent in the U.S. are gaining momentum. continues to increase.''
Susan Lee, Meta's chief financial officer, was asked if Meta could benefit from legislation passing that would force the sale of TikTok to another owner or ban the app in the United States. However, he said it was too early to tell.
“We have obviously been closely monitoring events related to TikTok, but at this stage it is too early to assess the impact and what it means for our business. I think so,” Lee said.
