Meta's Q3 Earnings Surge: AI Drives Growth Amid Increased Infrastructure Spending

Meta's Q3 profit surges 35pc reflecting strong ad revenue and its AI push

AP - Meta Platforms Inc posted stronger-than-expected third-quarter results on Wednesday fuelled by its advertising revenue growth and its push to incorporate artificial intelligence (AI). But the Instagram and Facebook parent company warned that it expects a "significant acceleration" in infrastructure spending next year as it continues to pour money into developing AI. Nearly all of Meta's revenue comes from advertising on its platforms, so a slight shortfall in user numbers also put a dent in an otherwise strong quarter. Meta said it's "family daily active people" - that is the number of users who signed into at least one of its apps (Facebook, Messenger, Instagram, WhatApp and Threads) in a day - was 3.29 billion on average for September. Analysts had expected 3.31 billion. "The miss in its user metric, daily active people, is concerning, as Meta will need to squeeze more revenue out of its existing users as growth slows," said Emarketer analyst Jasmine Enberg. She added, though, that the company is in a good position to do so "as its AI-powered tools are boosting engagement by helping show users more of what they like and making its ads, particularly on Reels, more effective". For the three months ended on September 30, the Menlo Park, California-based company earned USD15.69 billion, or USD6.03 per share, up 35 per cent from USD11.58 billion, or USD4.39 per share, in the same period a year earlier. Revenue rose 19 per cent to USD40.59 billion from USD34.15 billion. Analysts, on average, were expecting earnings of USD5.22 per share on revenue of USD40.21 billion, according to FactSet Research. "We had a good quarter driven by AI progress across our apps and business," CEO Mark Zuckerberg said in a statement. "We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses." For the current quarter, Meta is forecasting revenue of USD45 billion to USD48 billion. Analysts are expecting USD46.18 billion. "Meta's solid quarter adds further evidence to the view that digital advertisers are choosing to spend their budget on the so-called market leaders, such as Facebook and Instagram, at the expense of the smaller social media networks, like Snap," said Investing.com analyst Jesse Cohen. Cohen added that while AI is "clearly driving growth" at Meta, "investors appear to be disappointed over the company's forward guidance and rising costs needed to develop AI features". Meta said it expects 2024 operating losses at its Reality Labs segment - which includes its virtual- and augmented-reality glasses - will "increase meaningfully" due to product development costs and other investments. Last Month, Meta teased a prototype for Orion, the holographic augmented reality glasses it's been working on for a decade. But Orion doesn't have a release date yet, in large part because it is currently so expensive to make. Zuckerberg called it a "glimpse of the future". Meta's shares slipped about three per cent in after-market trading following the earnings report.

Meta Platforms Q3 Earnings: Revenue Beat, EPS Beat, Daily Actives Up 5%, 'Strong Momentum' In AI - Meta Platforms (NASDAQ:META)

Meta reports third-quarter adjusted earnings of $6.03 per share, beating analyst estimates of $5.25 per share. Meta Platforms Inc META reported third-quarter financial results after the market close on Wednesday. Here's everything you need to know from the quarter. Q3 Earnings: Meta reported third-quarter revenue of $40.59 billion, beating analyst estimates of $40.29 billion. The company reported third-quarter adjusted earnings of $6.03 per share, beating analyst estimates of $5.25 per share. Meta has now beat analyst estimates on the top and bottom lines in seven consecutive quarters, according to Benzinga Pro. Total revenue was up 19% on a year-over-year basis. Family daily active people were up 5% year-over-year to 3.29 billion. Ad impressions jumped 7% year-over-year and average price per ad increased by 11% year-over-year. Costs and expenses came in at $23.24 billion, up 14% year-over-year. Capital expenditures came in at $9.2 billion. The company ended the quarter with $70.9 billion in cash, cash equivalents and marketable securities, and $28.82 billion of long-term debt. Meta noted that its headcount was up 9% year-over-year to 72,404 as of Sept. 30. "We had a good quarter driven by AI progress across our apps and business," said Mark Zuckerberg, founder and CEO of Meta. "We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses." Related Link: Alphabet's Earnings Rally Pushes Magnificent 7 Market Cap To Record $16.8 Trillion: 10 Tech-Heavy ETFs Moving Wednesday Outlook: Meta expects fourth-quarter revenue to be in the range of $45 billion to $48 billion versus estimates of $40.29 billion. Meta expects full-year 2024 total expenses to be in the range of $96 billion to $98 billion, versus prior guidance of $96 to $99 billion. The company expects full-year 2024 capital expenditures to be in the range of $38 billion to $40 billion, versus its prior guidance range of $37 billion to $40 billion. "For Reality Labs, we continue to expect 2024 operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and investments to further scale our ecosystem," the company said. Meta executives will hold a conference call to discuss the company's quarterly results at 5 p.m. ET. META Price Action: Meta Platforms shares were up approximately 68% year-to-date heading into the report. The stock was flat after-hours, trading at $592 at the time of publication Wednesday, according to Benzinga Pro. Read Next: Apple Refreshes MacBook Pro Lineup With M4 Pro and M4 Max 3Nm Chips Photo: Shutterstock. Market News and Data brought to you by Benzinga APIs

Meta set to report Q3 earnings after the bell

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., arrives for the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 25, 2024. Meta is slated to report third-quarter earnings on Wednesday after the close of regular trading. Here's what analysts polled by LSEG are expecting: Meta shares are up almost 70% this year and trading near a record, boosted by a string of strong earnings reports. The company's gains on Wall Street have benefited Meta CEO Mark Zuckerberg, who earlier in October surpassed Amazon founder Jeff Bezos as the world's second-richest person for the first time, according to the Bloomberg Billionaires Index. Zuckerberg has been pointing to Meta's massive investments into artificial intelligence, which includes spending billions of dollars on Nvidia's popular graphics processing units, as helping improve the company's core online ad business in the aftermath of Apple's 2021 iOS privacy update. With Meta in July reporting its fourth straight quarter of sales growth above 20%, investors remain optimistic about the company's overall financial health. Bernstein analysts said in a research note last week that Meta replaced Alphabet as the firm's "set-it-and-forget-it blue chip holding" because of the company's "healthy core business" and its low-risk AI strategy. Meta's results come a day after digital ad companies Alphabet, Reddit and Snap all reported solid quarterly earnings. Microsoft reports after the bell on Wednesday, and the big week for tech earnings wraps up on Thursday, when Apple and Amazon report quarterly financials. One possible concern for Meta could be slowing revenue growth. If Meta hits analysts' expectations for third-quarter revenue, that would represent 18% year-over-year growth, down from 23% a year ago. At that time, Meta was heavily benefiting from the massive digital ad spending from China-linked retailers like Temu and Shein, and it's unclear how long those companies will continue their digital marketing blitzes.

Earnings snapshot: Meta tops expectations for earnings and revenue (NASDAQ:META)

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