Meta also lowered its projections for total expenses for the year, adjusting the upper limit of its expected spending from $95 billion to $92 billion. The adjustment was probably welcomed by investors wary of how much the company is shelling out on its plans for an augmented- and virtual-reality enabled future.
The company reported total quarterly revenue up 7% year-over-year to $27.9 billion, and net income of nearly $7.5 billion, or $2.72 per share.
“We made progress this quarter across a number of key company priorities and we remain confident in the long-term opportunities and growth that our product roadmap will unlock,” CEO Mark Zuckerberg said in a statement.
Meta also noted that its business was affected by Russia’s war in Ukraine — the company’s Facebook and Instagram platforms were blocked in Russia last month — and expects those challenges to continue in the current quarter.
In the last quarter of 2021, Meta began breaking out its Reality Labs segment, which includes its AR and VR efforts, from its larger family of apps. In the first quarter of 2022, the Reality Labs unit posted a loss of nearly $3 billion during the quarter. And Zuckerberg analysts warned on Wednesday’s earnings call to expect continued challenges.
“Based on the strong revenue growth we saw in 2021, we kicked off a number of multi-year products to accelerate some of our longer-term investments,” he said. “But with our current business growth levels, we are now planning to slow the pace of some of our investments.”
Zuckerberg said Meta hopes in the coming years to generate sufficient operating income growth from its family of apps to fund its investments in Reality Labs while still growing the company’s overall profitability.
“Of course, our priority remains building for the long-term, so while we’re currently building our plans to achieve this, it is possible that prolonged macroeconomic or business uncertainty could force us to trade off against shorter-term financial goals,” Zuckerberg said. “But we remain confident in our long-term opportunities.”