TechFlow news — Meta Platforms (META.O) released its second-quarter financial report, with Q2 revenue exceeding market expectations and optimistic sales outlook for Q3. The company expects Q3 revenue to be between $38.5 billion and $41 billion, above analysts' forecast of $39.1 billion. Despite a 7% increase in costs during Q2, revenue grew at a faster pace, driving operating margin up from 29% to 38%.
The Reality Labs division, responsible for the metaverse, reported a Q2 loss of $4.48 billion, generating less than 1% of Meta's total revenue. Losses have been expanding steadily in recent years, reaching $6 billion in 2020 and $16 billion in 2023. In June, the company laid off about 100 employees, including several vice presidents and managers.
Former employees revealed issues such as lack of clear vision, frequent reorganizations, and leadership lacking expertise in AR/VR. The company is currently developing AR glasses codenamed "Orion," but former staff have questioned their commercial viability. CEO Zuckerberg stated that while AI may arrive earlier than holographic AR, the company is already prepared.
Meta will continue heavy investment in AI infrastructure. Capital expenditures for 2024 are expected to range between $37 billion and $40 billion.
Max Willens, an analyst at eMarketer, said this quarter's results may ease investor concerns over Meta's spending on AI and the metaverse.
