Meta, Snap, and Alphabet shared their first-quarter revenue growth which exceeded analysts' estimates, proving that digital advertising is back on track.
The financial gain was primarily attributed to the ad businesses, run by the tech companies, which were previously affected in 2022.
(Photo : Austin Distel via Unsplash)
Read Also: Threads Allows Users to Automatically Hide Custom Words
Tech Giants Starts 2024 With Revenue Boosts
Meta reported a 27% increase in its first-quarter revenue to $36.5 billion, marking its strongest result since 2021. The company lost two-thirds of its value two years ago, resulting in layoffs.
Alphabet also gained 15% overall with $61.66 billion in ad revenue. Its entertainment platform, YouTube, had a 21% jump in ad revenue, equivalent to $8.09 billion. The parent company's stock also increased by 10%, its greatest feat since 2015.
Snap recorded a 21% boost in its revenue to $1.19 billion. Previously, the company's sales only grew in single digits or decreasing manner. The shares also jumped 28%, citing the accelerating demand for its ad business.
Tech Giants Pushes 2022's Dark Era for Businesses
Several companies faced challenges in 2022 which resulted in low profit turnout. The primary cause of the issue was traced back to the increasing inflation rate. By 2023, tech giants and digital advertising companies had to conduct layoffs and cost cuts.
In addition, Apple's iOS privacy change proved difficult for social media companies to implement target ads. While the companies have started to show increasing numbers, investors and analysts remain alert due to political and economic instability.
Meta's CEO Mark Zuckerberg reported a decline in shares as the company attempts to expand beyond advertising, such as the metaverse.
"We've historically seen a lot of volatility in our stock during this phase of our product playbook where we're investing in scaling a new product but aren't yet monetizing it," the CEO explained.
Other companies like Pinterest, Amazon, and Reddit, are expected to report their first-quarter earnings. The reports will solidify investors' outlook on the digital ad landscape for 2024.
Related Article: Google Tests AI Conversation for People Learning English Language
