The earnings results published late Wednesday showed Meta Platforms experienced a 23 percent increase in revenue during the third quarter, thanks to its cost -eduction efforts and a resurgence in digital advertising revenues.
Facebook parent company’s revenue for the quarter ended Sept. 30 was $34.146 billion, a 23.21 percent increase from the $27.714 billion in third quarter fiscal year 2022.
Adjusted earnings were $4.39 per share as net income rose 164 percent, to $11.58 billion.
The company outperformed estimates in ad impressions, hitting a 31 percent year-over-year increase instead of the expected 29.6 percent.
Meta’s income from operations rose 142.73 percent year over year, to $13,748 million, compared to $5,664 million in the year-ago quarter.
Meta’s results indicate a 168 percent year-over-year earnings surge and a 23 percent spike in sales.
Meta stock has soared nearly 150 percent so far this year, placing it among the top performers in the S&P 500 Index.
Metaverse Suffers Losses With Reality Labs
Meta’s Reality Labs division continued to be a cash-burning endeavor.The division incurred a loss of $3.75 billion for the third quarter, in contrast to $3.67 billion in the previous year. The metaverse-oriented division saw a 26 percent decline in revenue, totaling $210 million.
Regarding platform Threads, Mr. Zuckerberg said “people love it so far” and expressed hope the network would hit one billion users one day.
“We’re three months in now, and I’m very happy with the trajectory,” the Meta CEO said during an investor call. “There are just under 100 million monthly actives at this point. And we’re now getting to the point where we’re going to be focusing on growing the community further.”
Meta Widens Revenue Guidance Range
For the next quarter, Meta is looking to widen its revenue guidance range.The range, slated to be between $36.5 billion and $40 billion, is higher than the usual amount of $2.5 billion that the company typically offers.
Meta CFO Susan Li attributed the influence of macroeconomic factors, such as the war in the Middle East, on the company’s advertising performances.
“Now in terms of how this translates into impact on the fourth-quarter business, first of all, I should say that coming into the fourth quarter, we’ve been seeing continued strong advertiser demand in key segments, including online commerce and gaming,” said Ms. Li during an investor call.
“But having said that, we are also seeing more volatility at the start of the quarter. That’s in part why we widened our guidance range to capture that uncertainty.”
AI Will Be Meta’s Biggest Investment
Regarding investment priorities, Mr. Zuckerberg stated that AI will be Meta’s primary focus in 2024, encompassing both engineering and compute resources.“This year alone, we’ve seen a 7 percent increase in time spent on Facebook and a 6 percent increase on Instagram as a result of recommendation improvements,” he said.
“Our AI tools for advertisers are also driving results with Advantage+ shopping campaigns, reaching a $10 billion run rate and more than half of our advertisers using our Advantage+ creative tools to optimize images and text in their ads creative.”
He indicated that Meta intends to persist in downgrading various non-AI projects within the organization, prioritizing the engagement of personnel in AI-related initiatives instead.
In 2022, Meta began a comprehensive restructuring process that involved downsizing the workforce and streamlining projects.
These measures aimed to refocus the company’s efforts on enhancing its AI-driven algorithms, enabling more accurate and personalized recommendations.
