Meta Platforms Inc (META) delivered a strong performance in the third quarter, surpassing analysts’ expectations on both revenue and earnings per share. The company’s financial report, released after market close on Wednesday, showcased a robust performance fueled by its dominant social media platforms and continued advancements in artificial intelligence (AI).
Financial Highlights:
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Revenue:
Meta recorded a revenue of $40.59 billion for the third quarter, exceeding analysts’ estimates of $40.29 billion. This marks a significant 19% year-over-year increase, demonstrating the company’s continued growth trajectory.*
Earnings per Share:
The company reported adjusted earnings of $6.03 per share, surpassing analysts’ estimates of $5.25 per share. This impressive performance marks seven consecutive quarters where Meta has exceeded expectations on both top and bottom lines.*
User Growth:
Family daily active people (DAP) saw a 5% year-over-year increase, reaching 3.29 billion. This indicates a continued expansion in the user base, solidifying Meta’s position as a global social media powerhouse.*
Advertising Performance:
Ad impressions jumped 7% year-over-year, while the average price per ad increased by 11% year-over-year. This demonstrates the strength of Meta’s advertising business, which remains a key revenue driver.AI Focus and Future Investments:
Meta’s CEO, Mark Zuckerberg, highlighted the company’s significant progress in AI as a key driver of its success. He mentioned strong momentum with Meta AI, the adoption of Llama (Meta’s large language model), and AI-powered glasses. This indicates a continued focus on AI development and integration across its platforms.
Looking forward, Meta anticipates continued growth in revenue and significant investments in its Reality Labs division. The company expects fourth-quarter revenue to fall between $45 billion and $48 billion, exceeding analysts’ estimates of $40.29 billion.
Investment Implications:
Meta’s strong financial performance and commitment to AI development have bolstered investor sentiment. The stock, which was already up approximately 68% year-to-date, remained flat in after-hours trading following the earnings release. The company’s strategic focus on AI and its expanding user base continue to position Meta for future growth and innovation.
