What just happened? Facebook has seen its number of daily active users (DAUs) increase in Q1 2022 after experiencing its first-ever decline a quarter earlier, helping push its shares up 19%. But the AR and VR division (Reality Labs), an important part of its metaverse plans, lost $2.96 billion, adding to the $10.2 billion loss it recorded throughout last year.
It was a mixed bag of first-quarter earnings results for Meta. Facebook DAUs, which had fallen from 1.93 billion to 1.92 billion in Q4 2021, were up to 1.96 billion in Q1 2022, beating Wall Street estimates of 1.95 billion. But the company's total quarterly revenue of $27.91 billion missed analysts' estimates of $28.20 billion, a 7% year-over-year growth that marks the smallest since Facebook went public a decade ago and 21% lower than a year earlier.
Meta's combined businesses, including Facebook, Instagram, and WhatsApp, saw DAUs increase 6% YoY to 2.87 billion, or around 36% of the world's population. But net income from its family of apps was down 13% YoY to $11.48 billion.
"More people use our services today than ever before, and I'm proud of how our products are serving people around the world," said Meta CEO Mark Zuckerberg.
Meta's vision for the metaverse is a big part of its plans, hence the name change last year, but it is one that will take a lot of time and money. Reality Labs' $2.96 billion loss is over one billion dollars more than the $1.83 billion it lost a year ago. Zuckerberg insisted, however, that the project would pay off by the end of the decade. "Primarily this is laying the groundwork for what I would expect to be a very exciting 2030," he said, though not all Meta employees are as enthusiastic about the metaverse as their leader.
The next quarter isn't expected to be a good one for Meta. Russia's invasion of Ukraine and rising inflation are expected to result in monthly active user numbers being flat or declining, while revenue is predicted to be between $28 billion and $30 billion, lower than analysts' estimates of $30.6 billion.