Facebook-parent Meta – On Wednesday, Meta Platforms surpassed third-quarter profit and sales projections, aided by its continuous cost-cutting efforts and a rebound in digital advertising expenditure ahead of the holiday season.
The owner of social media sites Facebook and Instagram cut spending for the year as it announced its greatest operating margins in two years.
However, the business forecasted 2024 spending that will exceed Wall Street forecasts, owing to the fact that it moved employment demands from this year to the next and continued to invest in AI infrastructure. It also predicted that the violence in Israel and Gaza could have a negative impact on fourth-quarter sales.
Meta shares, which have surged over 150% this year, flipped in after-hours trading, initially gaining 3% then reverting to trade 3% lower two hours later.
Meta, which also owns WhatsApp, has been recovering from a bruising 2022, when investors fled as the business spent billions building the metaverse – the shared virtual world environments that individuals can access via the internet – in the face of competing challenges and a post-pandemic fall in digital marketing.
Facebook-parent Meta
Meta’s operating margin more than doubled to 40% in the third quarter. Revenue increased at the fastest rate in two years as well.
Total 2023 expenses were reduced from $88 billion to $91 billion to a range of $87 billion to $89 billion.
According to LSEG statistics, the social media business indicated it expected total expenses in the region of $94 billion to $99 billion in 2024, which was higher than expected.
It declined to provide fresh justifications for the spending, citing the same increased AI infrastructure investments, recruiting plans, and predicted losses on its metaverse-focused Reality Labs unit as in the prior quarter.
After falling behind in adopting AI-friendly hardware and software systems, the corporation has been hurrying to modernize its data centers. It predicted that capital expenditures in 2024 will be in the $30 billion to $35 billion range, with growth attributable to investments.
After falling behind in adopting AI-friendly hardware and software systems, the corporation has been hurrying to modernize its data centers. It predicted that capital expenditures in 2024 will be in the $30 billion to $35 billion range, with growth attributable to investments.
Meta’s ad views climbed 31% year on year in the third quarter ended September 30. The average price per ad fell by 6%, but at the slowest rate in seven quarters.
In line with expert projections, the business expects fourth-quarter revenue of $36.5 billion to $40 billion.
“The expected global surge in digital ad spending, which is expected to reach $667.6 billion next year, combined with Meta’s effective execution and cost control, puts the company on solid ground,” said Insider Intelligence chief analyst Jeremy Goldman.
However, Meta noted “softness” in ad expenditure at the start of the fourth quarter, which looked to be tied to the start of Israel’s conflict with Hamas. Li stated that the impact was accounted for in the company’s fourth-quarter outlook.
Revenue increased 23% to $34.15 billion in the September quarter. According to LSEG statistics, analysts expected revenue of $33.56 billion.
Meta’s daily active population (DAP) increased by 7%. The metric is used by the corporation to count unique users who use any of its apps in a day, such as Facebook, Instagram, Messenger, or WhatsApp. DAP increased by 7% in the previous June quarter.
Daily active users on Facebook increased by 5%, while ad impressions across Meta’s apps increased by 31%.
Add Comment