Q3 2024 Meta Earnings Report

Meta Shares fell 2% after the company reported weaker-than-expected user numbers in its third-quarter earnings report.

Here are the results.

• Earnings per share: $6.03 versus $5.25 expected from LSEG
• revenue: $40.59 billion versus LSEG's expected $40.29 billion

Revenue rose 19% year over year in the third quarter, while net income rose 35% to $15.7 billion, compared to $11.6 billion a year earlier. This represents Meta's lowest annual net income growth since the second quarter of 2023.

Revenue from Meta's advertising business was $39.9 billion in the quarter, up 18.7% year over year. Advertising accounted for 98.3% of Meta's total revenue.

The company expects fourth-quarter revenue to be between $45 billion and $48 billion. The midpoint of this forecast is above the analyst consensus of $46.3 billion.

According to Meta, the number of daily active people rose 5% year-on-year to 3.29 billion in the third quarter, below analyst expectations of 3.31 billion.

The company said its guidance for total spending in fiscal 2024 will be in the range of $96 billion to $98 billion, which is lower than its previous forecast of $96 billion to $99 billion.

Meta said its fiscal 2024 investment forecast will be between $38 billion and $40 billion, up from $37 billion to $40 billion.

Meta said it expects capital spending to continue to increase significantly in 2025.

Additionally, the company said it expects a “significant acceleration” in infrastructure-related spending next year.

Meta CEO Mark Zuckerberg has highlighted Meta's massive investments in artificial intelligence, which include billions of dollars Nvidia's popular graphics processing units that will help improve the company's core online advertising business following Apple's 2021 iOS privacy update.

Meta's Reality Labs unit, which is tasked with developing virtual and augmented reality technologies, posted a third-quarter operating loss of $4.4 billion, beating analysts' expectations of $4.68 billion US dollars. Third-quarter revenue for the division rose 29% year-over-year to $270 million, falling short of analysts' expectations of $310.4 million.

Since 2020, Meta's Reality Labs unit reported an operating loss of more than $58 billion.

The total number of employees increased by 9% year-on-year to 72,404 (as of September 30, 2024).

Meta's findings come a day after digital advertising companies alphabet, Reddit And Snap All reported solid quarterly results. Microsoft reported third-quarter results on Wednesday, where the company beat on both revenue and profit.

Apple And Amazon report quarterly financial figures on Thursday.

REGARD: Meta's sales still have room to maneuver despite all the AI ​​spending.