The tech giant's revenue for the quarter went up by 23% from last year to $34.15 billion.
For Q3 FY23, Meta, the parent company of Facebook, WhatsApp, and Instagram, reported a revenue of $34.15 billion, marking a 23% increase from the previous year. Net income for the company more than doubled, reaching $11.58 billion.
The company saw a 21% increase in its advertising revenue. The company reported $33.64 billion in revenue from the ad business. Meta saw a 31% increase in ads viewed compared to the previous year's Q3. Although the average price per ad decreased by 6%, this decline slowed down, marking the slowest pace in seven quarters.
During the earnings call, Meta outlined four focus areas to improve monetisation on its platforms: Monetising Reels, engaging on-platform ads, making it easier for brands to leverage their own data, and using AI advancements to drive better campaign outcomes.
Meta’s social-networking services, including Facebook, Instagram, WhatsApp, and Messenger, continued to grow, albeit at lower rates given their already-massive user base.
Facebook’s daily active users averaged 2.09 billion in September 2023, reflecting a 5% increase from the previous year. Total daily active users across Meta’s family of apps reached an average of 3.14 billion, showing a 7% annual increase.
The company reported that its short-form video format, Reels, represented over 40% of time spent on Instagram since its launch. Reels has become “net neutral” to overall company revenue, generating ad revenue comparable to other areas of Meta’s apps.
Additionally, Meta introduced Threads, a Twitter-like service, which garnered just under 100 million monthly active users within three months of its launch.
This strong performance followed a period of year-over-year revenue declines in the first nine months of 2022, during which Mark Zuckerberg, CEO, Meta, said that the company has made significant job cuts, reducing the workforce by over 21,000 employees.
In the Q3 earnings call, Susan Li, CFO, Meta, provided a bullish revenue expectation for Q4 2023, estimating sales in the range of $36.5 billion to $40 billion. However, she also acknowledged potential challenges due to the volatile situation created by the Israel-Hamas conflict, which could impact advertising demand.
Despite the positive financial results, Meta cautioned about potential challenges in the coming months. The company forecasted increased spending for 2024, surpassing Wall Street estimates.
This decision was influenced by Meta’s focus on investing in AI infrastructure and the need to hire additional personnel, which was deferred from the current year. Furthermore, the conflict in Israel and Gaza was cited as a factor that might dampen the company's sales in the fourth quarter.