Meta Posts Record $15.7 Billion Profit as Net Income Balloons 35% in Q3

Meta, the parent company of Facebook and Instagram, reported a record quarterly profit on Wednesday afternoon, as well as stronger-than-expected sales figures, despite a minor slow down in revenue growth. Overall, Meta’s net income jumped 35% year-over-year to $15.68 billion.

“We had a good quarter driven by AI progress across our apps and business,” Meta CEO Mark Zuckerberg said in a statement.

Zuckerberg, on the company’s earnings call on Wednesday afternoon, said 500 million users interact with Meta’s AI chatbot, which offers answers to users on apps like Facebook and Instagram, each quarter. He also said the company would continue to invest in AI, AR, and VR, even if means irritating some investors with short-term losses in that sector, because the upside is so big.

Here are the top-line results: 

Revenues: $40.59 billion, up 19% from $34.15 billion in 2023. Meta’s Q3 sales topped analysts from Zack’s Investment Research estimated revenue of $40.21 billion. The company’s quarter-over-quarter revenue growth was slower than during Q2, when the company reported a 22% annual jump in sales. As usual, the bulk of Meta’s sales — 96% — came from ads.

Net income: $15.68 billion, an increase of 35% compared to $11.58 billion the year prior. Meta’s diluted earnings per share of $6.03 beat Zack’s estimate EPS of $5.19. The company’s Q3 profit topped its previous record for quarterly net income, which it set during the fourth quarter of last year when it posted a $14 billion profit.

Daily active users: 3.29 billion DAUs across its family of apps — Facebook, Instagram, WhatsApp, and Threads — by the end of September, up 5% year-over-year. Meta added 30 million daily users quarter-over-quarter, although the company didn’t share how those gains breakdown by app.

Threads: Zuckerberg offered an eye-catching figure on the company’s earnings call: Threads, the company’s social app that launched as a rival to X last year, now has 275 million monthly users. That’s up 37.5% from Q2, when the company said Threads was approaching 200 million monthly users. CFO Susan Li, on the company’s earnings call, said it’s seen healthy Threads growth in the U.S. and markets like Taiwan. At the same time, company Li said “We don’t expect Threads to be a meaningful driver of 2025 revenue.”

Average price per ad: The average price of an ad on one of Meta’s apps increased 11% year-over-year, indicating the appetite for reaching users on Facebook and Instagram remains strong.

Head count: Meta reported 72,404 employees at the end of September, up 9% from the year prior. Meta’s growth stands out, as many tech companies, including TikTok, have cut jobs in recent months.

Guidance: Meta said it expects to report between $45 billion and $48 billion in sales next quarter.

Facebook Reality Labs, the company’s unit dedicated to virtual and augmented reality hardware and software, continued to standout from the rest of Meta’s report due to its losses. FRL’s operating loss was $4.4 billion for Q3, up 19% from the year prior. In the first nine months of 2024, Meta has lost $12.76 billion on FRL, which is currently developing its Orion AR-powered smart glasses.

Zuckerberg is bullish on the future of smart glasses, saying last month they’ll “gradually replace phones by 2030.” And Meta appears to be unfazed by FRL’s losses so far.

Li on Wednesday said the company expects “operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and investments to further scale our ecosystem.”

Zuckerberg added it was important for the company to continue investing in AI, AR, and VR, even if that’s not “what investors want to hear in the near-term” as losses increase. “I just think that the opportunities here are really big,” Zuckerberg said.

The company’s stock, which has been red hot in 2024, took a momentary breather after Meta’s Q3 report posted. Meta’s stock dropped 1.5% in early after-hours trading to $583 per share. On the year, Meta’s stock is up 70%.

Meta has continued its push into artificial intelligence in recent months, as the company battles Alphabet, Apple, and Microsoft, as well as Microsoft-backed OpenAI, in the budding sector. Last month, the company announced its AI chatbot would be voiced by Hollywood stars like Kristen Bell and Keegan-Michael Key. And last week, Meta struck a multi-year deal with Reuters to include the news organization’s content in responses from its AI chatbot.

In an effort to reduce its dependence on Google and Bing, Meta is also working to build its own AI-powered search engine, that would drive its chatbot’s responses.

When it comes to another hot topic — politics — Meta has been conspicuously quiet during the run up to Election Day. In 2020, the company — after facing backlash for Russian bots being able to run ads during the ’16 presidential race — tightly policed COVID-19 and election news on its platform. Most notably, Facebook took steps to limit the distribution of a New York Post report on Hunter Biden, the son of then-nominee Joe Biden, in October 2020. This year, Meta has opted to deemphasize political content on its platforms, at the behest of Zuckerberg. Instead, Meta’s apps are now more likely to recommend sports, cooking and celebrity news to users.

On the Instagram front, Meta announced last month it would start applying restrictions to kids’ accounts in an effort to make the app more “safe,” in the company’s words.

Looking ahead, Zuckerberg said he was “pretty amped” about the work Meta is doing on the AI and AR/VR front.

“This may be the most dynamic moment that I’ve seen in our industry,” Zuckerberg said on the Q3 call. “And I am focused on making sure that we build some awesome things and make the most of the opportunities ahead.”

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