Meta has booked huge advertising revenue growth in the June quarter as the cost of advertising on its platforms increased.
Its total ad revenue for the quarter was $59.4 billion (A$85.6 billion), up 26 per cent year-on-year when currency fluctuations are discounted.
The revenue hike is down to Meta increasing the cost of advertising on its apps (Facebook, Instagram, WhatsApp and Threads), up 12 per cent, as well as the volume of ads it served in the quarter, up 14 per cent.
Meta’s results are all the more remarkable as its daily active users number remained relatively flat (up 3 per cent to 3.6 billion — 43 per cent of the world’s population).
Although Meta’s revenue growth is remarkable, its cost base increased at a higher clip, up 55 per cent year on year to $42 billion for the quarter.
The bulk of this is capital expenditure into AI tech; Meta forecasts it will spend between $130-145 billion.
The business also cut 8,000 staff in May, which also impacted the Australian market, costing the company $1.18 billion in severance payments.
Meta global founder and CEO Mark Zuckerberg said the glowing results are evidence its costly AI investment strategy is paying dividends.
“AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” he said.
It was a point reiterated by Meta ANZ managing director William Easton.
“It’s been a landmark quarter for AI innovation at Meta. We shipped Muse Spark 1.1, which made Meta AI significantly smarter across our Family of Apps, launched Meta Glasses, and introduced the Meta AI business agent to help advertisers automate and optimise their campaigns,” he said.
“These products show that our investments in AI are having an impact across our business and will improve the capabilities of our AI, and I believe this will lead to new offerings from Meta to service enterprise customers and advertisers of all sizes.”
