Mark Zuckerberg, CEO of Meta, spent the last two years weathering a decline in digital advertising and cutting costs. This year, he proclaimed, would be a “year of efficiency” for his company.
Some fruits of that labor are now beginning to be seen.
Meta, owner of Facebook, Instagram, WhatsApp and Messenger, reported On Wednesday, those revenues rose 23 percent to $34.15 billion in the third quarter, above Wall Street estimates of $33.6 billion, according to data compiled by FactSet. Profits were $11.6 billion, more than double the previous year’s $4.4 billion.
Meta’s growth was fueled by a rebound in digital ads, which also boosted the financial performance of other companies. On Tuesday, Google reported an increase in advertising sales, and Snap also revealed an increase in sales after revenue declined for two quarters.
But Meta’s results also benefited from its cost cuts, as expenses fell 7 percent from a year earlier to $20.4 billion.
The results underscore Meta’s resilience amid a tumultuous few years for Silicon Valley. The company saw record profits and user growth in the early days of the pandemic, when people were forced to stay home and connected through their devices and apps. But pandemic relief, combined with higher interest rates and global economic uncertainty, later hit Meta. The company reduced its workforce by about a third and flattened its organizational structure.
Meta’s user growth continued in some of its key markets, including the United States and Canada. About 3.14 billion people use one or more of the company’s apps every day, up 7 percent from last year.
Meta said it expected revenue in the current quarter to be between $36.5 billion and $40 billion. He also forecast that his spending next year would be lower than previously forecast, between $87 billion and $89 billion, down from previous guidance of $88 billion to $91 billion. Meta added that he expected losses from his Reality Labs division, which is working on metaverse-related products, to continue rising next year.
“The company may be starting to get out of the woods as the Mark Zuckerberg-led company continues to focus on improving operational efficiency,” said Jesse Cohen, senior analyst at Investing.com.
This is a developing story. Please check back for updates.
