By
Chimamanda U. Martha
April 12th, 2024
Meta released its eagerly anticipated Q2 2022 earnings came in less-than-stellar, as the company’s metaverse division sustained huge losses.
Meta Platforms Inc (NASDAQ: META) posted its Q2 2022 earnings report on Wednesday, which revealed a revenue miss amid an underperforming quarter. The drop in Meta’s Q2 2022 revenue haul resulted from a poor-performing metaverse division for the quarter. According to Meta, its Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations, sustained a massive $2.81 billion loss in Q2. However, the loss is less than the $2.96 billion the company suffered in the first quarter. Furthermore, Meta’s metaverse division managed to fare much better than analysts’ estimated $3.67 billion loss for the quarter.
Meanwhile, Meta’s FRL division’s revenue in Q2 was at least $200 million less than realized in Q1. In the second quarter, the metaverse division made $452 million compared to the $695 million it generated a quarter earlier. This figure is very small compared to the $28.4 tillion Meta generated in Q2 from apps such as Facebook, Instagram, and WhatsApp.
For the second quarter, Meta also missed on earnings across other segments and has now issued a weak forecast for Q3. Meanwhile, shares of the Facebook parent dropped 3.8% in extended trading.
Meta Q2 2022 Earnings by the Numbers
Meta’s reported earnings per share (EPS) of $2.46 for the second quarter of 2022, compared to analysts’ expectations of $2.59. In addition, revenue for the tech giant came in at $28.82 billion versus $28.94 billion expected.
For the second quarter, Meta reported a daily active userbase (DAU) of 1.97 billion compared to analysts’ expectations of 1.96 billion. Furthermore, the Facebook parent’s monthly active userbase (MAU) also came in at 2.93 billion, less than the estimated 2.94 billion. For average revenue per user (ARPU), Meta posted $9.82 versus $9.83 expected, according to StreetAccount.
Other Meta News
Since the beginning of the year, Meta shares have lost around half of their value. This is causing concern among investors who worry that the company’s core online advertising business is in jeopardy. For instance, an Apple iOS privacy update last year limited Meta’s ability to track users. Furthermore, a weakening economy has seen some companies take drastic measures to cut costs – including slashing advertising budgets.
Meta is currently taking measures to remain profitable. For instance, on a call with analysts, chief executive officer Mark Zuckerberg revealed some of the steps the company is currently considering. According to Zuckerberg, Meta plans to cut down on its workforce ahead of an economic slowdown. As Zuckerberg put it:
“This is a period that demands more intensity and I expect us to get more done with fewer resources.”
Furthermore, Zuckerberg also provided insight into Meta’s operational plans regarding sustainability. According to the CEO, the company wants to focus more on its long-term metaverse and Reels growth, instead of maximizing short-term revenue from monetization.