Meta doubled profits in September quarter up 23%

Meta again exceeded Wall Street’s expectations on Wednesday when it reported earnings for the quarter ended in September, in another sign that the company’s “year of efficiency” turnaround strategy continues to deliver. The strong results come as Meta says it has “substantially completed” the layoffs portion of its cost cutting plan following a brutal 2022.

The Facebook parent company posted year-over-year quarterly revenue gains of 23% to more than $34 billion, exceeding the $33.5 billion analysts had projected. Meta also more than doubled profits compared to the year-ago quarter, reporting net income of nearly $11.6 billion — during the same quarter in the prior year, Meta’s profits had dropped by half.

Meta (META) shares jumped as much as 4% in after-hours trading Wednesday following the report. Meta stock was already up 140% year-to-date as of Wednesday’s close.

Meta's been navigating rough waters, steadying itself as an AI-powered advertising giant and working through its capital-intensive expansion into VR and AR. The Facebook and Instagram parent has been in the process of shoring up two key areas of interest for investors — its AI efforts and its position in the digital advertising market, which has been in a prolonged slump and is just showing signs of a rebound.

Meta's Q3 advertising revenue came in at $33.64 billion, compared to the expected $32.94 billion. The company beat on ad impressions estimates, clocking an increase of 31% year over year, versus the expected 29.6%.

LSEG. At the midpoint of the range, growth in the quarter will be about 19% higher from a year earlier.

Meta said expenses for 2023 will be in the range between $87 billion and $89 billion, which is down from its previous forecast of $88 billion to $91 billion. Expenses for 2024 will fall in the range between $94 billion and $99 billion.

“In terms of investment priorities, AI will be our biggest investment area in 2024, both in engineering and computer resources,” Zuckerberg said on the call.

Zuckerberg on Wednesday stressed that Meta’s focus on efficiency won’t change anytime soon. The company posted its highest operating margin in two years during the September quarter, and “I look forward to carrying … this operating discipline forward,” he said. He added that AI is set to be the company’s biggest investment area in 2024.

Zuckerberg also said that Threads — Meta’s competitor to the platform formerly known as Twitter — now has just under 100 million monthly active users. The announcement indicates that the platform is now steadily growing active users after an early boom in sign-ups and then sharp decline in engagement following its launch in July. Zuckerberg said he believes the platform has a “good chance” of reaching 1 billion users if it continues growth over the next several years.

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Sarah H

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