High Q3 Profits for Meta Due to Ad Revenue Growth

The parent company of Facebook and Instagram, Meta Platforms, has reported a significant increase in earnings for the third quarter. The company attributes this increase to an increase in advertising revenue as well as reduced expenses as a result of a significant reduction in workforce size.

Earnings of $11.58 billion, or $4.39 per share, were reported by the California-based company for the three months beginning in July 2023 and ending in September 2023.

When compared to the numbers from the previous year, which were $4.4 billion, or $1.64 per share, this represents a significant increase. Additionally, sales increased by 23%, going from $27.71 billion to $34.15 billion, bringing the total to $34.15 billion.

Meta’s Q3 Performance in Numbers

Mark Zuckerberg, the founder and CEO of Meta, expressed satisfaction with the company’s performance during the quarter. He cited advancements in artificial intelligence and mixed reality as the reason for his satisfaction. These advancements were made possible by the launch of Quest 3, Ray-Ban Meta smart glasses, and the company’s AI studio.

The number of family daily active people (DAP) averaged 3.14 billion for September 2023, which represents an increase of 7% year-over-year. On the other hand, the number of family monthly active people (MAP) reached 3.96 billion as of September 30. This represents an increase of 7% when compared to the same period last year.

The number of daily active users (DAUs) on Facebook reached an average of 2.09 billion in September, representing an increase of 5% year-over-year. In a similar vein, the number of monthly active users (MAUs) on Facebook had reached 3.05 billion as of September 30, representing an increase of 3% year-over-year.

The number of ad impressions that were sent through Meta’s Family of Apps during the third quarter of 2023 increased by 31% when compared to the same period the previous year. On the other hand, the typical cost of an advertisement experienced a decline of 6% year over year.

The total revenue for the period was $34.15 billion, representing an increase of 23% when compared to the previous year’s total. This number represents an increase of 21% when compared to the previous year using the same currency base. On the other hand, total costs and expenses went down by 7% year-over-year, coming in at $20.40 billion. This represents a reduction of $1.3 billion.

For the third quarter of 2023, Meta has budgeted a total of $6.76 billion for capital expenditures. This amount takes into account principal payments on finance leases. During the same period, the company also repurchased Class A common stock for an amount equal to $3.70 billion.

As of September 30, Meta had an available and authorized balance of $37.22 billion for repurchases. The amount of cash, cash equivalents, and marketable securities held by the company was reported to be $61.12 billion. It is important to note that free cash flow came in at $13.64 billion for the third quarter of 2023.

Meta’s 4th Quarter Look

The process of restructuring, which aims to increase productivity and better align business priorities, has seen significant progress, and the laying off of employees that was planned is getting close to being finished.

The company claims that there are currently ongoing efforts to assess the viability of facility consolidation and data center restructuring initiatives. Meta estimates that its total revenue will fall somewhere in the range of $36.5 billion to 40 billion dollars during the fourth quarter of 2023.

This forecast assumes that favorable exchange rates will contribute a boost of 2% to year-over-year growth in total revenue. The revised forecast for total expenses for the full year 2023 is now estimated to be $88-89 billion, which is a decrease from the previous estimate of $88-91 billion.

This new estimate takes into account restructuring costs totaling approximately $3.5 billion. In addition, Meta forecasts that Reality Labs will incur greater operating losses compared to the previous year in 2023.