Meta announced its third-quarter results after the closing bell on Wednesday, with quarterly revenue of $40.59 billion, beating analyst estimates. User growth was slightly lower than expected, and Meta’s stock price fell more than 3% in after-hours trading after a call with analysts.
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Meta achieved better-than-expected sales and profits in its third-quarter results announced Wednesday. The company has also made clear that it will not ease spending in building out its AI infrastructure this year, and expects these costs to increase in 2025.
Meta CEO Mark Zuckerberg said, “We had a good quarter due to advances in AI across our apps and business.” “There is also strong momentum in meta-AI, Llama adoption, and AI-powered glasses.”
The company’s revenue for the quarter was $40.59 billion, beating expectations of $40.25 billion. Earnings per share came to $6.06, beating expectations of $5.25.
Meta said that in its core advertising business, the average price per ad rose 11% year-on-year.
However, the company disappointed expectations regarding user growth. According to the report, the number of daily active users increased by 5% from the previous year to 3.29 billion. This was lower than the expected 3.31 billion daily users.
Shares fell more than 3% after Meta’s earnings call with analysts, during which Zuckerberg spoke about the company’s AI investment strategy, saying, “This is the most dynamic I’ve seen in this industry.” It could be a moment.”
The company’s big bet on AI, which included both training its own AI models and launching consumer products across platforms powered by AI models, continued to drive up costs.
“We continue to expect a significant increase in capital spending in 2025,” Mehta said. The company expects “infrastructure spending growth to accelerate significantly next year due to expected higher depreciation and operating expenses for expanded infrastructure.”
Zuckerberg and Chief Financial Officer Susan Lee were asked on the earnings call about the huge costs associated with AI spending and infrastructure.
Zuckerberg said Meta is building out its infrastructure faster than originally expected. This means higher expenses will be reflected in the bottom line, but it also positions the company to continue growing at that pace, he said. The CEO said that while racking up larger spending “may not be what investors want”, he was “pleased with how well the team has executed it.” ” he said.
Meta expects 2024 losses for its Reality Labs division, which covers AR, VR and Metaverse products, to be “significantly higher year-over-year.” The company has lost tens of billions of dollars over the years on this effort. Asked by an analyst whether Meta’s losses were approaching a “peak” for the sector, Mr. Lee did not directly answer, but Reality Lab said, “Clearly the company’s strategic long-term “This is one of our priorities,” he said.
Meta is also hiring, with headcount up 9% year-over-year. Meta said it is considering where to invest in strategic opportunities such as AI, infrastructure and Reality Labs, while also looking at ways to streamline operations in other areas. Meta has laid off more than 20,000 employees since late 2022.
