Facebook parent Meta Platforms META 1.39%increase; green up pointing triangle reported its highest quarterly sales growth since 2021 as digital advertising continued to rebound, but the company also signaled that spending for its experimental metaverse unit would surge in 2024.
The social media giant’s advertising revenue grew about 12% in the quarter, a turnaround driven by improved use of AI technology that has enabled better ad-targeting, after Apple privacy changes in 2021 cost the company $10 billion in sales.
Meta has cut costs aggressively this year in what Chief Executive Mark Zuckerberg has called a “year of efficiency.” But some of those spending reductions have been offset by higher costs in its Reality Labs business, which produces headsets and content for immersive worlds that the company sees as a linchpin of the future of technology.
While some investors have urged caution in spending related to that business, Zuckerberg has steadfastly stood by his big bet, insisting that it will position the company to be a leader in what he believes will emerge as the next major computing platform.
Meta’s shares surged by more than 7% in after-hours trading, a sign that investors are encouraged by improvements in digital advertising even as concerns about the metaverse remain. The company reported second-quarter revenue of $32 billion, up 11% compared with a year ago, and the largest quarterly growth since the final quarter of 2021.
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