Meta reported better-than-expected results for the third quarter with a 23% increase in revenue, the fastest growth rate since 2021. The company’s stock rose about 4% in extended trading on Wednesday.
Meta Earnings Report
Following the company’s announcement of better-than-expected results in the third quarter, there was a surge in Meta’s stock on Wednesday. Meta, the parent company of Facebook, Instagram, WhatsApp, and Threads, reported a significant revenue of $34.2 billion for the third quarter ending on September 30, driven by a 23% increase. Wall Street’s expectation was $33.5 billion, and this level was exceeded.
The profit margin also exceeded expectations, reaching $4.39 per share, a 168% increase compared to the previous year. Analysts had expected earnings per share of $3.61, which was also surpassed. Another important point is the rise in operating margin.
As part of Meta’s cost-saving move, the company’s margin doubled to 40% compared to the previous quarter, demonstrating a positive return. Costs and expenses decreased by 7%, and there was also a decrease in the number of employees, which dropped by 24% to 66,185 at the end of the quarter.
Meta also shared in the report that there was a positive increase in the number of “daily active users.” The number of daily users increased by 7% to reach 3.14 billion compared to a year ago. When looking at the monthly active user count, there was a 7% increase to 3.96 billion. Facebook experienced a 5% increase in daily active users, reaching 2.09 billion. The monthly active user count also increased by 3% to 3.05 billion.
Current Status of Meta and Metaverse
Reality Labs, the arm that manages Meta’s Metaverse and Quest headset processes, incurred a loss of $3.74 billion in the third quarter, causing an increase in the $3.67 billion loss seen in the previous year. The total loss announced by Reality Labs this year amounted to $11.47 billion. The company’s report stated that the losses in the unit would not remain at 2023 levels and would further grow in 2024.
In the disclosed report, Zuckerberg stated that artificial intelligence would be the biggest investment area for the company in 2024. The Meta report also mentioned that as investments in artificial intelligence and the metaverse continue, it would lead to higher infrastructure costs.