Meta's Q3 Sales Slip 4%. Mark Zuckerberg Says 3.7 Billion People Use One Of Meta's Apps Monthly
Meta clocked total revenue of $27.71 billion and net income of $4.4 billion for the third quarter, which was down 52 per cent year over year and fell short of Wall Street projections
Meta was logged a 4 per cent year-on-year (YoY) revenue loss, while missing Wall Street estimates on the bottom line in the third quarter as significant metaverse investments continued to eat into earnings, reported Variety.
Mark Zuckerberg, chief executive officer (CEO) of Meta Platforms, in his Facebook statement said 3.7 billion people use one of Meta's apps monthly. The number of people using Facebook each day is the highest it's ever been. "Instagram has more than 2 billion monthly actives. WhatsApp has more than 2 billion daily actives. We're also seeing strong momentum in Reels with 140 billion plays across our services each day. Overall, our product trends look better than some of the recent commentary I've seen," said Zuckerberg.
According to Variety, Facebook DAUs had previously fallen by roughly 1 million in Q4 2021. Meta clocked total revenue of $27.71 billion and net income of $4.4 billion for the third quarter, which was down 52 per cent year over year and fell short of Wall Street projections, Variety said.
The YoY revenue decline was only the corporation's second as a public company, following a 1 per cent loss in Q2.
Zuckerberg in his address said, “Our community continued to grow this quarter. We now reach more than 3.7 billion people monthly across our family of apps. And while we continue to navigate some challenging dynamics -- a volatile macroeconomy, increasing competition, ads signal loss, and growing costs from our long term investments -- I have to say that our product trends look better from what I see than some of the commentary I've seen suggests.”
He pointed out that there has been a bunch of speculation about engagement on our apps and what we're seeing is more positive. “On Facebook specifically, the number of people using the service each day is the highest it's ever been, nearly 2 billion, and engagement trends are strong. Instagram has more than 2 billion monthly actives. WhatsApp has more than 2 billion daily actives, also with the exciting trend that North America is now our fastest growing region. Across the family, some apps may be saturated in some countries or some demographics, but overall our apps continue to grow from a large base. We're also seeing engagement grow, especially strong growth in Reels, and I'll share more details around that when I discuss our product priorities shortly.”
Meta is going to focus on investments on a small number of high priority growth areas, which means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today,” Zuckerberg wrote on Facebook.
According to the Meta CEO, three of the primary areas the company is going to focus on are AI discovery engine that's powering Reels and other recommendation experiences, ads, and business messaging platforms, and future vision for the metaverse. “The internal indications I've seen suggest we're doing leading work and are on the right track with these investments, so I think we should keep investing heavily in these areas,” he said.
Variety quoted Refinitiv data according to which, analysts expected revenue of $27.38 billion. Alphabet (parent of Google and YouTube) and Snap both reported Q3 earnings losses, citing deterioration in ad expenditure during the period.
Meta also predicted a loss in revenue for the fourth quarter, projecting sales of $30 billion to $32.5 billion, a 3.5 per cent- 11 per cent decrease from the previous year.
Shares of Meta declined over 18 per cent in after-hours trading as a result of the earnings failure and Q4 revenue estimate. Year to date, the stock is down more than 68 per cent.
Meanwhile, Meta has been investing billions in its metaverse projects, most recently releasing the high-end Meta Quest Pro headgear ($1,500), a turn suggested by the social network giant's new moniker.
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