Inside Meta: As expenses stabilize, is Zuckerberg's 'year of efficiency' still going?
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In February, Meta Platforms (NASDAQ:META) CEO Mark Zuckerberg declared 2023 to be a "year of efficiency." This came as the Facebook parent looked to tamp down the aggressive spending that marked the early part of the decade, when the company anticipated an imminent spike in consumer interest in the metaverse.
With mainstream acceptance of the metaverse lagging behind META's projections, the company announced a series of cost cuts. In recent months, this expense-reduction program has remained a key thrust, even as efforts like its Twitter-competitor Threads took over the headlines.
Still, META's latest quarterly report showed a more complicated story. Far from a sharp downward trajectory for expenses, R&D expenses remained largely stable with the previous quarter and came in at higher levels than those posted last year. At the same time, marketing costs ticked up on a quarter-over-quarter basis.

Looking at specifics, R&D expense came in at $9.34B in Q2 compared to $9.38B in the previous quarter. This remained higher than the $8.69B seen in the same period last year and well above the approximately $5.2B total for research expenses that existed in Q1 of 2021.
For marketing and sales, costs edged up to $3.15B versus $3.04B in the prior quarter. This figure did remain below the amount seen last year, when META reported nearly $3.6B.
Turning to general and administrative expenses, the figure for Q2 nominally reached $4.16B. However, this included $1.87B in accrued legal expenses, which the company explained mostly "relate to the fine imposed by the Irish Data Protection Commission in the ongoing data transfers matter and the adoption of new fining guidelines by the European Data Protection Board."
Excluding this legal expense, the figure came in at about $2.29B (the number used in the chart above). This represented the main area of sustained cost cutting, with general and administrative expenses (excluding the legal cost mentioned) reaching their lowest level since Q2 2021, when the total sat below $2B.
The spending figures for the latest quarter come as META wraps up a major restructuring effort. In May, reports indicated that Meta had launched the last round of its layoff plan. Originally announced in March, the cost-cutting plan targeted a reduction of 10,000 positions.

Following a string of disappointing reports, Meta's Q1 results showed the social media giant beating expectations. This was repeated with Street-topping results in Q2. The last several months have seen rising hope about ad revenue, along with optimism about AI initiatives and the launch of the company's Twitter competitor, Threads.
More on Meta Platforms:

Meta gets Strong Buy rating from Seeking Alpha's Quant rating system, despite valuation concerns
Meta named one of the top 10 stocks for the second half of 2023 by SA's Steve Cress
The main competitor for Meta's Threads product has rebranded from Twitter to "X"
Even amid cost-cutting, Meta remains a player in AI