Meta Platforms, the parent company of Facebook and Instagram, has reported a significant surge in earnings for the third quarter, attributing it to a boost in advertising revenue and reduced expenses following a substantial workforce reduction.
In the period spanning July to September 2023, the California-based company disclosed earnings of $11.58 billion, or $4.39 per share.
It marks a notable increase from the previous year's figures of $4.4 billion, or $1.64 per share. Additionally, revenue grew by 23%, ascending from $27.71 billion to $34.15 billion.
This photo illustration created in Washington, DC, on July 6, 2023, shows the opening page of Threads, an Instagram app, near the Meta logo. More than 10 million people have signed up to Threads, Meta's rival to Twitter, within the first few hours of its launch, the company's CEO Mark Zuckerberg said July 6. The app went live on Apple and Android app stores in 100 countries at 2300 GMT on July 5, 2023, and will run with no ads for now, but its release in Europe has been delayed over data privacy concerns.
Meta's Q3 Performance in Numbers
Mark Zuckerberg, the founder and CEO of Meta, expressed satisfaction with the quarter's performance, citing advancements in AI and mixed reality through the launch of Quest 3, Ray-Ban Meta smart glasses, and the company's AI studio.
Family daily active people (DAP) averaged 3.14 billion for September 2023, signifying a 7% year-over-year increase. On the other hand, family monthly active people (MAP) reached 3.96 billion by September 30, also showing a 7% year-over-year upswing.
Facebook's daily active users (DAUs) averaged 2.09 billion in September, reflecting a 5% year-over-year surge. Similarly, monthly active users (MAUs) on Facebook reached 3.05 billion by September 30, indicating a 3% year-over-year rise.
The third quarter of 2023 has witnessed a 31% year-over-year increase in ad impressions delivered across Meta's Family of Apps. Conversely, the average price per ad saw a 6% year-over-year decrease.
Revenue for the period amounted to $34.15 billion, marking a 23% year-over-year increase. This figure represents a 21% year-over-year rise on a constant currency basis. On the other hand, total costs and expenses experienced a 7% year-over-year reduction, amounting to $20.40 billion.
Regarding capital expenditures, including principal payments on finance leases, Meta allocated $6.76 billion for the third quarter of 2023. The company also repurchased $3.70 billion of its Class A common stock in the same period.
As of September 30, Meta had $37.22 billion available and authorized for repurchases. The company also reported $61.12 billion in cash, cash equivalents, and marketable securities. Notably, free cash flow for the third quarter of 2023 was $13.64 billion.
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Meta's 4th Quarter Look
The restructuring process to enhance efficiency and align business priorities has seen substantial progress, with planned employee layoffs nearing completion.
According to the company, efforts to assess facilities consolidation and data center restructuring initiatives are ongoing. For the fourth quarter of 2023, Meta anticipates total revenue to fall within the range of $36.5 to 40 billion.
This projection assumes a 2% foreign currency tailwind to year-over-year total revenue growth. The outlook for full-year 2023 total expenses has been adjusted to $87-89 billion, down from the previous estimate of $88-91 billion.
This revision includes approximately $3.5 billion in restructuring costs. Furthermore, Meta anticipates an increase in Reality Labs' operating losses year-over-year in 2023.
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