Meta Platforms (META) stock experienced a 14% surge on Thursday after the company’s Q1 results, released late Wednesday, exceeded expectations. The company also raised its forecast for the current quarter while lowering its expense outlook. Trading at $239, shares of the Facebook and Instagram parent company reached their highest levels since late January 2022. Meta, having dubbed 2023 its “Year of Efficiency,” announced it has “substantially completed” its 2022 layoffs, but will continue with further staff reductions this year.
Meta’s key earnings figures surpassed analysts’ estimates compiled by Bloomberg, with revenue of $28.65 billion against an estimated $27.67 billion and EPS of $2.20 versus an estimated $2.01. The growth in ad impressions contributed to the company’s ad revenue beat, showing a 26% YoY increase across Meta’s “Family of Apps,” including Facebook, Instagram, and WhatsApp. CEO Mark Zuckerberg highlighted the company’s progress, saying, “Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster.”
In its relentless pursuit of cost-cutting, Meta has reduced its 2023 expense projections to between $86 billion and $90 billion, including restructuring costs, down from its October guidance of $96 billion to $101 billion. The revised figures also factor in expected ongoing losses in Meta’s metaverse division, Reality Labs, which lost $13.7 billion in 2022. As of Q1’s end, the company reported a headcount of 77,114, a 1% decrease from the previous year.
Despite the layoffs, Meta is following in the footsteps of Alphabet (GOOG, GOOGL) and Microsoft (MSFT) with its buyback strategy. The company repurchased $9.22 billion of its shares in Q1 2023, and as of March 31, Meta was authorized to buy back $41.73 billion of its stock.