Meta Platforms Inc. topped forecasts for second-quarter sales and gave a rosy outlook for the current period, signaling that the social networking giant is succeeding in migrating advertisers to its new Reels short-video feature.
Shares climbed 4.5% in late trading after the company said second-quarter revenue was $32 billion, compared with analysts’ average projections for $31.1 billion. In a statement Wednesday, Meta said sales in the current quarter will be $32 billion to $34.5 billion, also topping average estimates.
The company is betting on Reels—short-form videos that are similar to what users see on rival TikTok to draw more attention to its social networks, Facebook and Instagram. The format has succeeded in increasing usage, and is now also helping draw advertisers, reigniting their spending after an industry-wide budget tightening in 2022.
Meta has been cutting thousands of jobs and teams in what CEO Mark Zuckerberg calls its “year of efficiency.” Investors have rewarded the strategy, causing the company’s stock price to more than double so far this year. Meta has also been investing heavily in artificial intelligence, using the technology to make recommendations—for both content and advertising—more tailored to users’ interests.