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Artificial intelligence continues to drive Meta’s yearlong recovery. Revenue from its Advantage+ Shopping Campaigns (ACS) more than doubled since last year, CEO Mark Zuckerberg said during the company’s first-quarter-2024 earnings call.
Meta, parent company of Facebook and Instagram, reported a 27% increase in revenue, reaching $36.5 billion, compared with $28.6 billion in the first quarter of 2023. Advertising contributed 97% of that revenue, or $35.6 billion, and the average price of ads rose 6%.
“For all the recent scrutiny of its effectiveness, Meta’s ad business is humming,” said eMarketer senior analyst Max Willens. “With inventory levels and average price per ad rising, Meta is back to delivering enviable margins even as it continues to invest in opportunities that may be years away from contributing to profits. It must continue that upward momentum in the face of rising costs.”
Meta’s emphasis on integrating AI into its products has yielded strong financial results for the second consecutive quarter. Last week, the company unveiled its assistant, Meta AI powered by Llama 3, with plans to introduce the chatbot in multiple languages and countries over the coming months, per the company.
“It’s been a good year,” said Zuckerberg, referring to the company’s AI efforts, including Meta AI seeing “healthy growth across our applications.”
Driven by substantial investments in AI infrastructure, including data centers and chip design, Meta said its projected capital expenditure for 2024 is expected to range between $35 billion and $40 billion. This marks an increase from the earlier forecast of $30 billion to $37 billion.
The total number of people using Meta’s apps is up 7% year-over-year, reaching 3.24 billion users on average for March in its “family of apps” such as Facebook, Instagram, Messenger and WhatsApp.
But it wasn’t all good news. The tech giant expects lower revenue for the second quarter, ranging from $36.5 billion to $39 billion, dipping below analyst expectations of $38.3 billion per FactSet’s survey.
