Meta CEO Mark Zuckerberg testifies during the Senate Judiciary Committee hearing titled “Big Tech and the Online Child Sexual Exploitation Crisis,” at the Dirksen Building on Wednesday, January 31, 2024.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
dead It reported weaker-than-expected user numbers and warned of a significant acceleration in infrastructure spending in 2025 in its third-quarter earnings report on Wednesday.
The company's stock price fell slightly in after-hours trading.
Here are the results.
Earnings per share: $6.03 vs. $5.25 expected by LSEG Revenue: $40.59 billion vs. $40.29 billion expected by LSEG
Sales in the third quarter jumped 19% year over year while net income grew 35% to $15.7 billion from $11.6 billion a year earlier. This represents the lowest year-over-year net income growth for Meta since the second quarter of 2023.
The company reported 3.29 billion daily active people in the third quarter. This rose 5% year-on-year, but was below analysts' expectations of 3.31 billion.
Meta also raised its capital expenditure guidance for fiscal year 2024 to between $38 billion and $40 billion, up from $37 billion to $40 billion previously. Additionally, the company said it expects capital expenditures to continue to grow significantly in 2025 due to accelerating infrastructure expenditures.
“Our investments in AI still require serious infrastructure, and I expect to continue investing significantly there as well,” Meta CEO Mark Zuckerberg said Wednesday on a call with analysts.
Zuckerberg points to the company's massive investments in artificial intelligence, which includes spending billions of dollars on Nvidia's popular GPUs, as helping to improve the company's core online advertising business in the wake of Apple's 2021 privacy update to iOS. The company is improving and building more data centers to help provide the technology infrastructure needed for its AI strategy.
More than 1 million advertisers have used Meta's generative AI advertising tools, Zuckerberg said.
Meta said it expects total expenditures for fiscal year 2024 to be between $96 billion and $98 billion, lower than previous guidance of $96 billion to $99 billion.
Meta advertising revenue was $39.9 billion for the quarter, up 18.7% year over year. Ads accounted for 98.3% of Meta's total revenue in the third quarter.
Revenue from Meta's Asia-Pacific region grew 15%, representing the company's slowest-growing region, CFO Susan Lee said on the call. This represents a decline from the 28% growth in the second quarter, and Li attributed the slowdown to growing demand from advertisers in China. Investors were concerned that a slowdown in digital ad spending by China-linked online retailers such as Temu and Shein would impact Meta's overall revenue.
Meta said it expects fourth-quarter revenue to range between $45 billion and $48 billion. The midpoint of this guidance is above analyst consensus of $46.3 billion.
The company's Reality Labs hardware unit reported an operating loss of $4.4 billion in the third quarter, lower than analysts' expectations of $4.68 billion. Sales at that unit jumped 29% year over year to $270 million in the third quarter, missing analysts' expectations of $310.4 million.
Since 2020, Meta's Reality Labs unit has posted an operating loss of more than $58 billion.
The company's total headcount grew 9% year over year to 72,404 as of September 30.
The social media company's results come a day after digital advertising companies alphabet, Reddit and pop All reported strong quarterly earnings. Microsoft It announced third-quarter earnings on Wednesday that beat the top and bottom lines.
Alphabet said Tuesday that third-quarter sales from its Google Cloud unit were $11.35 billion, up 35% from a year earlier. The company attributed its strong cloud results to its AI offerings, which include subscriptions for enterprise customers.
Microsoft reported on Wednesday that revenue from its Azure cloud unit rose 33% year over year, with 12 points coming from artificial intelligence services.
apple and Amazon Quarterly financial data report on Thursday.
