Mark Zuckerberg, CEO of Meta, testifies during the Senate Judiciary Committee hearing titled “Big Tech and the Online Child Sexual Exploitation Crisis,” in Dirksen building on Wednesday, January 31, 2024.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
Meta shares were down 2% after the company reported weaker-than-expected user numbers in its third-quarter earnings report.
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. That represents Meta’s lowest year-over-year growth for net income since the second quarter of 2023.
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.
The company said it is expecting fourth-quarter revenue to be between $45 billion and $48 billion. The midpoint of that guidance is higher than the analyst consensus of $46.3 billion.
Meta said daily active people grew 5% year-over-year for the third quarter to 3.29 billion, which was lower than analyst expectations’ of 3.31 billion.
The company said that guidance for its fiscal 2024 total expense will be in the range of $96 billion to $98 billion, which is lower than previous guidance of $96 to $99 billion.
Meta said that capex guidance for the 2024 fiscal year will be between $38 billion to $40 billion, up from $37 billion to $40 billion.
Meta said that it expects capital expenditures to continue to grow significantly in 2025.
Additionally, the company said that it expects a “significant acceleration” on expenses relating to infrastructure next year.
Meta CEO Mark Zuckerberg has been pointing to Meta’s massive investments into artificial intelligence, which includes spending billions of dollars on Nvidia’s popular graphics processing units, as helping improve the company’s core online ad business in the aftermath of Apple’s 2021 iOS privacy update.
Meta’s Reality Labs unit, tasked to develop virtual and augmented reality technologies, posted an operating loss of $4.4 billion in the third quarter, which beat analyst expectations of $4.68 billion. Sales in that unit jumped 29% year-over-year to $270 million in the third quarter, trailing analysts’ expectations $310.4 million.
Overall headcount grew 9% year-over-year to 72,404 as of Sept. 30, 2024.
Meta’s results come a day after digital ad companies Alphabet, Reddit and Snap all reported solid quarterly earnings. Microsoft reported third-quarter earnings on Wednesday in which it beat on the top and bottom lines.
Apple and Amazon report quarterly financials on Thursday.
WATCH: Meta’s revenue has room to run despite all their AI spending.
