Amid the ongoing quarterly earnings season, it is Facebook-parent Meta’s turn. For the three months ended September 30, the social media company witnessed a rise in its revenue and profitability alike. Its revenue amounted to $40.59 billion, beating the estimated $40.29 billion and clocking an annual growth of 19%.
For the same period, the company reported earnings per share (EPS) of $6.03, significantly exceeding Wall Street’s expectation of $5.25. Its net income, on the other hand, clocked a rather slow growth – rising by 35% annually to amount to $15.7 billion for the period. Its operating margin also clocked a small growth to reach 43%, while Meta’s overall costs and expenses for the quarter rose by 14% to amount to $23.24 billion. Going forward, the company expects its revenue for the current quarter to amount to $45-48 billion, while its overall expenses for the full year is estimated to fall somewhere between $96-98 billion.
“We had a good quarter driven by AI progress across our apps and business,” Mark Zuckerberg, Meta founder and CEO, commented on the matter. “We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”
In similar segments, the social media giant reported a strong growth in its advertising revenue for the quarter – the revenue rose by 18.7% year-over-year to amount to $39.9 billion. Still, this comes at a time when the company’s advertising business is facing challenges, and CFO Susan Li noted that Meta has witnessed a slowdown in the growth of revenue in the Asia-Pacific region. In the area, revenue growth was heavily impacted by decreased digital ad spending by major Chinese advertisers, falling to 15% for the quarter. The average price per ad estimate, though, seems to have risen by 6.76%.
Meta’s family of apps clocked a strong performance for the quarter – the number of daily active users (DAUs) rose by 5% YoY to amount to 3.29 bullion. Overall, the Family of Apps – which includes Facebook, Threads, Instagram and WhatsApp – generated a total of $40.3 billion in revenue for the quarter. It also pocketed $21.7 billion in income for operations for the same period. This increase in revenue can largely be attributed to the strong performance (and rising popularity) of Meta’s Threads app, which now has “almost 275 million” monthly users, according to Zuckerberg. “It’s been growing more than a million sign ups per day,” Zuckerberg spoke on the matter, adding that users are engaging more and more on the platform.
AI has been the central focus of almost every major tech company in recent years, and Meta is no different. Reality Labs – which is responsible for Meta’s forays into the AR and VR landscape – continues to bleed heavily. The unit generated $0.27 billion in revenue for the quarter (falling behind analyst estimates of $310.4 million), while being hit with a loss of $4.4 billion from its operations. This comes even as Meta has been heavily investing in AI, including in Nvidia’s GPUs. Meta AI, thankfully, has not disappointed, and Zuckerberg notes that the AI assistant has breached the 500 million user mark. In addition to this, more and more advertisers are reportedly leveraging Meta’s range of AI tools – so much that the past month saw over 15 million ads created with the help of generative AI.
