Meta Q3 Earnings Report 2024

Meta reported weaker-than-expected user numbers and warned of a significant acceleration in its infrastructure spending in 2025 in its third-quarter earnings report on Wednesday.

The company’s share price fell slightly in after-market trading.

Here are the results.

• Earnings per stock: $6.03 vs. $5.25 expected by LSEG
• Revenues: $40.59 billion vs. $40.29 billion expected by LSEG

Third-quarter sales rose 19% year over year, while net income grew 35% to $15.7 billion from $11.6 billion a year earlier. That represents Meta’s lowest year-over-year net income growth since the second quarter of 2023.

The company reported 3.29 billion daily active people in the third quarter. That was an increase of 5% year-on-year, but it came in short of analysts’ expectations of 3.31 billion.

Meta also raised investment guidance for fiscal 2024 to between $38 billion and $40 billion, up from $37 billion to $40 billion previously. In addition, the company said it expects capital spending to continue to grow significantly in 2025.

The company expects “a significant acceleration in infrastructure cost growth next year as we recognize higher growth in depreciation and operating costs for our expanded infrastructure fleet,” Meta said in a press release.

Meta said it expects total spending for fiscal 2024 to be in the range of $96 billion to $98 billion, which is lower than previous guidance of $96 to $99 billion.

Revenue from Meta’s advertising business came in at $39.9 billion for the quarter, up 18.7% year over year. Advertising accounted for 98.3% of Meta’s total revenue in the third quarter.

Meta said it expects fourth-quarter revenue to be between $45 billion and $48 billion. The midpoint of that guidance is higher than analysts’ consensus of $46.3 billion.

The company’s Reality Labs hardware unit posted an operating loss of $4.4 billion in the third quarter, which was less than analysts’ expectations of $4.68 billion. Sales in that unit rose 29% year-over-year to $270 million in the third quarter, beating analysts’ expectations of $310.4 million.

Since 2020, Meta’s Reality Labs unit has recorded an operating loss of more than $58 billion.

The company’s total headcount grew 9% year-on-year to 72,404 per 30 September.

Meta CEO Mark Zuckerberg has pointed to the company’s massive investments in artificial intelligence, which include spending billions of dollars on Nvidia’s popular graphics processing units, which help improve the company’s core online advertising business in the wake of Apple’s 2021 iOS privacy update.

The social media company’s results come the day after digital advertising companies Alphabet, Reddit and Snap all reported solid quarterly results. Microsoft reported third-quarter results on Wednesday that beat the top and bottom lines.

Apple and Amazon submit quarterly accounts on Thursday.

CLOCK: Meta’s revenue has room to run despite all their AI spending.