Meta Records Over $13B in Profits Amid AI Advancements But Loses $4.5B on Metaverse

Tech giant Meta Platforms' Q2 2024 earnings report shows its revenue surpassed expectations, up significantly from last year's earnings.The report shows that much of Meta's earnings come from AI advancements, including social apps like WhatsApp and Threads.

However, in Q2 2024, the firm recorded $4.5 billion in losses from its Metaverse unit, Reality Labs.Following this bullish Q2 earnings call, Meta's shares recorded a 7% price increase in after-hours trading.

Details of Meta's Q2 2024 Earnings

According to its July 31 quarterly earnings report, Meta Platforms recorded $42 billion in revenue in Q2 2024. This figure marks a 22% increase from 2023, making it Meta's second-largest quarter since its inception.

Further, the Silicon Valley-based tech behemoth recorded approximately $13.5 billion in profit. According to Mark Zuckerberg, much of this profit is attributed to the growth of the company's social apps, WhatsApp and Threads, and its AI advancements.

Zuckerberg revealed that Meta's AI assistant is poised to become the world's most used AI assistant by the end of 2024. He also revealed that it recorded increased demand and sales of its AI-powered Ray-Ban Meta smart glasses, released in September 2023.

Notably, Meta has integrated its Meta AI across social media applications, including Facebook, Messenger, Instagram, and WhatsApp. This integration must have contributed to the growth of these apps, which Zuckerberg acknowledged during the earnings call.

Zuckerberg said: ...And we're driving good growth across our apps."

Furthermore, Zuckerberg noted that Facebook's Marketplace has witnessed an increase in younger users despite the general perception of Facebook being a platform for older folks.

Meta's Q2 earnings surpassed the expectations of many financial analysts. Following the release of this earnings call, the price of shares soared over 7% in after-hours trading.

According to market data, Meta's stock, META, currently trades around $517, up over 8.9% in the last 24 hours.Meta noted that it plans to increase its capital investment by 2025. Much of this investment will focus on AI research and development.

Tech Giant Records More Loses from its Metaverse Endeavors

It also mentioned its Metaverse research arm, Reality Labs, Which develops virtual reality headsets, such as the Meta Quest 3.

This unit recorded $353 million in sales in Q2 and a loss of $4.5 billion. Since its launch in 2019, Reality Labs has consistently encountered losses, amounting to $59.9 billion following the recent $4.5 billion.

However, it doesn't seem wavered by these losses, as it continues to push the Metaverse initiative. According to the company's financial officer, Susan Li Reality Lab is expected to encounter significantly increased losses year-over-year.

This is because augmented/virtual reality (VR/AR) products are still under development. So, more investments are needed to expand the growing metaverse ecosystem.

The post Meta Records Over $13B in Profits Amid AI Advancements But Loses $4.5B on Metaverse appeared first on The Tech Report.