Meta Platform delivered strong third-quarter results, surpassing Wall Street expectations thanks to advertising revenue and the company’s increasing focus on artificial intelligence. The parent company of Instagram and Facebook, Meta has steadily integrated AI to optimize ad targeting and enhance user experiences.
Sales in the third quarter were up 19% year over year with net income growing 35% to $15.7 billion from $11.6 billion a year earlier.
“Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too,” Meta CEO Mark Zuckerberg said on a call with analysts, adding that over a million advertisers have used Meta’s generative AI advertising tools.
Looking ahead, however, Meta signaled a “significant acceleration” in infrastructure spending in 2024 as it intensifies its AI investments. The company’s spending outlook underscores the high costs associated with staying at the forefront of AI development, suggesting that future profitability could be impacted by these escalated infrastructure expenses. The market reacted to the news with the stock falling −18.80 (3.18%) in after-hours trading.
Also dampening the earnings report were weaker-than-expected user numbers. The company reported 3.29 billion daily active people for the third quarter. That was up 5% year over year but came in below analysts’ expectations of 3.31 billion.
Meta forecasts fourth-quarter revenue between $45 billion and $48 billion, with the midpoint surpassing the analyst consensus of $46.3 billion.
Meta Third Quarter 2024 Financial HighlightsFamily daily active people (DAP) – DAP was 3.29 billion on average for September 2024, an increase of 5% year-over-year.Ad impressions – Ad impressions delivered across our Family of Apps increased by 7% year-over-year.Average price per ad – Average price per ad increased by 11% year-over-year.Revenue – Total revenue was $40.59 billion, an increase of 19% year-over-year. Revenue on a constant currency basis would have increased 20% year-over-year.Costs and expenses – Total costs and expenses were $23.24 billion, an increase of 14% year-over-year.Capital expenditures – Capital expenditures, including principal payments on finance leases, were $9.20 billion.Capital return program – Share repurchases were $8.86 billion of our Class A common stock and total dividend and dividend equivalent payments were $1.26 billion.Cash, cash equivalents, and marketable securities – Cash, cash equivalents, and marketable securities were $70.90 billion as of September 30, 2024. Free cash flow was $15.52 billion.Long-term debt – Long-term debt was $28.82 billion as of September 30, 2024.Headcount – Headcount was 72,404 as of September 30, 2024, an increase of 9% year-over-year.
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{Author}BIA Staff{/Author}
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