Meta's net profit dropped significantly by 24% in Q1 2023. Why is it so?

Meta beat the Wall Street's expectations for the March quarter when it announced revenue of USD 28.65 billion, up 3 percent year-over-year, as the company still validates Metaverse. But the company's profits say otherwise. The company's net profit fell by 24 percent to USD 5.7 billion in the first quarter of 2023, from USD 7.5 billion in the first quarter of 2022.

Daily active domestic users (DAP) in the application family averaged 3.02 billion for March 2023, an increase of 5 percent, and monthly active domestic users (MAP) was 3.81 billion, again an increase of 5 percent for every 100 people. Facebook alone has reached 2.04 billion daily active users (DAUs), a 4 percent increase. Then why is the net profit decreasing?



This is because of the AI work, says Mark.

“We had a good segment, and our segment continues to grow. Our AI work is driving better results in our applications and businesses. We are evolving to be able to create better products faster and position ourselves with a powerful way to present our own products.” long-term vision,” said Mark Zuckerberg, Meta's founder and CEO.

But Meta Reality Labs (the AR-VR division) lost nearly USD 4 billion in the March quarter and will lose USD 13.7 billion by 2022.

"Our vision for AR glasses includes an Artificial Intelligence based workflow that we believe will be the foundation of next generation computing," Zuckerberg told analysts in an earnings call Wednesday afternoon. Meta expects total revenue to be in the USD 29.5-32 billion range for the second quarter of 2023.

"We expect our total spending for the full year 2023 to be in the USD 86-90 billion range, reversing the previous outlook given in March," Meta said. said.

This outlook includes restructuring costs of USD 3-5 billion related to consolidation and separation costs and other personnel costs.

"We continue to expect Reality Labs' operating loss to increase year-over-year in 2023.", says Zuckerberg.