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Six months after rebranding from Facebook, Meta Platforms reported its slowest quarterly growth since the company went public in 2012.
Its anemic quarterly revenue gain marked Meta’s lowest since the social media company’s 7% revenue increase during the first quarter of 2022.
The company’s Reality Labs division, which produces virtual and augmented reality infrastructure and software, exceeded expectations for the first quarter. The unit brought in $695 million in revenue, exceeding the $683 million analysts were expecting, according to the earnings report.
The company is going to continue to invest heavily in its metaverse ventures, CEO Mark Zuckerberg said during Meta’s earnings call Wednesday. Horizon Worlds, Meta’s digital ecosystem that will allow users to sell virtual assets and experiences, is expected to launch on the web this year.
“Our other focus for Horizon is building up the metaverse economy and helping creators make a living working in the metaverse,” Zuckerberg said. “We expect to be meaningfully better at monetization than others in the space.”
Meta reported 3.64 billion monthly users for its family of apps, which includes Facebook, Instagram, Messenger and WhatsApp, over the course of the first quarter — a 6% year-over-year increase.
In addition to expanding into the metaverse and creator economy, as competition from other video-based social media apps increases, Meta hopes to improve its Reels advertising options, Sheryl Sandberg, Meta’s chief operating officer, said.
Meta is continuing to consider regulatory risks associated with privacy and data protection, Sandberg added, in response to a question during the earnings call.
“Overall, the regulatory environment is a real challenge for our industry,” Sandberg said. “We think we are well set up to meet [requirements by] working closely with regulators and doing things in our technology like privacy enhancing technologies, to do more with less data, but we expect this to continue to be a significantly challenging time not just for us but across our whole industry.”
Meta stock, which is down 48% year-to-date, was trading about 19% higher during after-hours trading following the release of the earnings report.