Meta Platforms Inc (FB.O) shares climbed on Wednesday as Facebook’s quarterly results reported that daily active users were above Wall Street estimates, despite Meta recording its slowest revenue growth in a decade.
Shares of the social media giant rose 15% in extended trading.
Profit soundly beat Wall Street targets at $2.72 per share, compared with an analyst consensus of $2.56, according to a report by Reuters.
Facebook daily active users (DAU), a key metric for advertisers that indicates activity on the platform, were 1.96 billion, slightly higher than the estimate of 1.95 billion, according to IBES data from Refinitiv. Monthly active users came in at 2.94 billion, missing Wall Street estimates by 30 million.
Meta has lost about half of its value since the start of the year, after dismal February earnings when it reported a decline in Facebook’s daily active users for the first time and forecast a gloomy quarter, blaming factors including Apple’s (AAPL.O) privacy changes and increased competition from platforms like ByteDance’s TikTok.
“It’s good news that Meta somehow managed to eke out growth in DAU. It needed to show some sort of turnaround from last quarter’s performance. However, growth in monthly active users is slowing quickly. A few quarters ago it could count on developing markets to keep the growth engine going but it’s likely that even these high-growth opportunities are starting to dry up,” Insider Intelligence analyst Debra Williamson.
Total revenue, the bulk of which comes from ad sales, rose 7% to $27.91 billion in the first quarter, but missed analysts’ estimates of $28.20 billion, according to IBES data from Refinitiv.
Net income fell 21% to $7.47 billion in the first quarter, but beat analysts’ estimates of $7.15 billion, according to IBES data from Refinitiv.
Meta forecast second-quarter revenue between $28 billion and $30 billion. Analysts on average were expecting current-quarter revenue of $30.63 billion. The company said its outlook reflected factors including the war in Ukraine. It also said it was monitoring the potential impact of regulatory moves in Europe.
Meta lowered its expected 2022 total expenses to between $87 billion and $92 billion, down from its prior outlook of $90 billion to $95 billion.