But he reduced it to $6.25bn earlier this month after bringing in co-investors. Musk originally took a $12.5bn margin loan against stock of his electric car maker company Tesla to help fund his purchase of Twitter. Susan Li, Meta's current vice president of finance, will become CFO.The world’s richest man is also in talks with shareholders, including former Twitter CEO Jack Dorsey, for additional financing commitments to fund the deal, he said in the filing. In November, Chief Financial Officer David Wehner will become Meta's first chief strategy officer. Its second-quarter operating profit margin fell to 29% from 43% as costs rose sharply and revenue dipped. Meta broke out the Reality Labs segment in its results for the first time earlier this year, when it revealed the unit had lost $10.2 billion in 2021. Its Reality Labs unit, which is responsible for developing metaverse-oriented technology like the VR headsets, reported sales of $452 million, down from $695 million in the first quarter.Īlthough Meta has recently slowed investments as cost pressures increased, executives reassured investors it was still on track to release a mixed-reality headset called Project Cambria later this year, focused on professionals. In the second quarter, Meta reported $218 million in non-ad revenue, which includes payments fees and sales of devices like its Quest virtual reality headsets, down from $497 million last year. On Monday, two of Instagram's biggest users, Kim Kardashian and Kylie Jenner, both shared a meme imploring the company to abandon its shift to TikTok-style content suggestions and "make Instagram Instagram again." read moreĬEO Mark Zuckerberg did not appear to be swayed, however.Ībout 15% of content on Facebook and Instagram is currently recommended by AI from accounts users do not actively follow, and that percentage will double by the end of 2023, he told investors on the call.įor now, at least, the metaverse part of Meta's business remains largely theoretical. Meta should really pay attention to that." "Meta has a problem because they're chasing TikTok and if the Kardashians are talking about how they don't like Instagram. "They are being greatly affected by everything," Bokeh Capital Partners' Kim Forrest said, referring to the economic slowdown as well as competition from TikTok and Apple. However, Reels cannibalizes more profitable content that users could otherwise see and will continue to be a headwind on profits through 2022 before eventually boosting income, executives told analysts on Wednesday.
They added that Reels, a short video product Meta is increasingly inserting into users' feeds to compete with TikTok, was now generating over $1 billion annually in revenue. Meta executives told investors they were making progress in replacing ad dollars lost as a result of the Apple changes but said it was being offset by the economic slowdown. The company is simultaneously carrying out several expensive overhauls as a result, revamping its core apps and boosting its ad targeting with AI, while also investing heavily in a longer-term bet on "metaverse" hardware and software. On top of economic pressures, Meta's core business is also experiencing unique strain as it competes with short video app TikTok for users' time and adjusts its ads business to privacy controls rolled out by Apple Inc (AAPL.O) last year.
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