Meta Q3 Results: Facebook Parent Logs 23 Per Cent Growth As Ads Rebound; Beats Revenue Estimates

Meta's earnings per share increased to $4.39, compared with $1.64 in the prior year. The company’s operating margin in Q3 doubled to 40 per cent

Meta Platforms, the parent firm of social media platforms Facebook and Instagram, beat Street expectations, as the company clocked a 23 per cent rise in revenue to $34.15 billion for the quarter ended September (Q3), growing at the quickest pace in two years. Analysts expected revenue of $33.56 billion, according to LSEG data. Meta’s revenue grew, led by a recovery in digital advertising spending.

Meta's earnings per share increased to $4.39, compared with $1.64 in the prior year. The company’s operating margin in Q3 doubled to 40 per cent. Meta Platforms, which also owns WhatsApp, clocked its best operating margins in two years and also trimmed expenses for the year.

The company's total expenses in 2023 were cut to a range of $87 billion to $89 billion, from a previous range of $88 billion to $91 billion. It expected 2024 total expenses in the range of $94 billion to $99 billion, higher than estimates. It forecast fourth quarter revenue between $36.5 billion and $40 billion, in line with analyst expectations.

Meta CEO Mark Zuckerberg told analysts on a conference call that artificial intelligence would constitute the top investment priority for 2024. The company will de-prioritise a number of non-AI projects to avoid adding too much headcount, Zuckerberg said, without providing specifics.

A lean company culture provided stability for Meta to “see our long-term initiatives through in a very volatile world," he added. The US giant planned to end 2024 with "meaningfully higher" headcount than its approximately 66,000-person workforce as of the end of September, CFO Susan Li said.

As reported by news agency Reuters, the social media firm forecast 2024 spending that will exceed Wall Street estimates, as it pushed hiring needs from this year to the next and continued to invest in AI infrastructure. It also suggested the conflict in Israel and Gaza could dampen fourth quarter sales.

Meta has axed 21,000 employees since 2022, particularly in non-engineering roles. The company is keeping focus on engineering talent as it makes plans to rev up hiring again next year, executives said.