Meta is set to report Q3 earnings today at 5:00 PM Eastern time. Highlights from the earnings report published earlier today reveal growth that beat analysts’ expectations, driven by a significant rise in advertising revenue.
Key takeaways from Meta’s Q3 2023 earnings report include:
- Revenue of $34.1 billion, up 23% year-over-year
- Advertising revenue grew 21%, excluding currency impact
- Earnings per share of $4.39, far exceeding estimates
- Net income increased 164% to $11.6 billion
- Expenses decreased 7% compared to Q3 2022
- Reality Labs operating loss was $3.7 billion as metaverse investment continues
- Revised 2023 expense outlook to $87-89 billion, down from the prior $88-91 billion range. Now expects 2023 capital spending of $27-29 billion
- Increasing legal and regulatory scrutiny cited as a headwind
- User growth and revenue growth had slowed in recent quarters
Stay tuned as we live blog key earnings insights for digital marketing professionals.
5:02 PM ET: CEO Mark Zuckerberg says Meta had a “good quarter” overall, with three billion users across platforms.
He highlights new product launches like the Meta Quest 3 VR headset and Ray-Ban Stories smart glasses.
5:05 PM ET: Zuckerberg called out Meta’s AI work as another earnings highlight. This included Meta AI, the AI creative studio, the EMU model, early testing of a business AI platform, and plans to launch a creator-focused AI next year.
5:07 PM ET: Zuckerberg revealed Meta will de-prioritize non-AI projects and make AI the singular top priority for the company in 2024.
5:09 PM ET: Zuckerberg says Reels has increased time spent on Facebook and Instagram by over 40% since launching.
5:11 PM ET: Zuckerberg shared that AI-powered recommendations in Facebook and Instagram feeds have driven single-digit increases in time spent on each platform.
5:13 PM ET: Meta provided an update on its Threads app, saying it now approaches 100 million monthly active users. Zuckerberg said he believes Threads can reach a billion users.
5:17 PM ET: CFO Susan Li joins the call to discuss earnings, which are highlighted at the top of this post.
5:19 PM ET: Li reports daily active users on Facebook increased 5% year-over-year.
5:20 PM ET: Li highlighted how improvements to Meta’s ad targeting capabilities are leading to better campaign performance for marketers.
5:21 PM ET: Meta’s Reality Labs segment, which contains its metaverse efforts, posted a $3.7 billion operating loss last quarter.
5:25 PM ET: Meta outlined four focus areas to improve monetization on its platforms: Monetizing Reels, engaging on-platform ads, making it easier for brands to leverage their own data, and using AI advancements to drive better campaign outcomes.
5:27 PM ET: After previously sharing specific ad revenue figures for Reels, Meta announced it will no longer quantify Reels ad revenue separately.
5:29 PM ET: Li outlined Meta’s top priorities in 2024:
- AI – Continuing major investments in artificial intelligence across all platforms and products.
- Infrastructure – Building out AI supercomputing infrastructure and connectivity.
- Reality Labs – Developing metaverse hardware and software.
- Monetization – Improving ad experiences and formats to drive more revenue.
- Regulatory Compliance – Adapting to changing regulatory environments, especially in Europe.
5:31 PM ET: Li predicts Meta’s total expenses will grow to approximately $99 billion in 2024, including further losses in VR/AR.
5:37 PM ET: During the Q&A, Zuckerberg emphasized Meta’s commitment to open-source technology. He cited benefits like increased adoption, collaboration, transparency, and accountability.
5:44 PM ET: Asked about generative AI for ads, Meta revealed three new tools launching soon:
- Text Variation – Automatically generates different ad copy options
- Image Expansion – Creates additional asset sizes and formats
- Background Generation – Produces complementary backgrounds for products
5:49 PM ET: A question is asked about Meta’s perspective on AI chatbots and monetization.
Meta sees AI tools like its Meta AI assistant and AI Studio as new use cases that will increase the time spent on the platform. More engagement provides an opportunity for more monetization.
Zuckerberg believes people will interact with many different AI assistants from different providers.
5:58 PM ET: Meta declined to share any specifics on the Meta Quest 3 VR headset, including potential sales projections.
6:03 PM ET: The conference call concludes with a question asked regarding Meta’s commitment to AI compared to other product launches. Zuckerberg says it’s hard to predict outcomes given Meta’s unique approach to developing AI technology.
He believes AI-generated content will become more prevalent on Meta’s platforms over time. Meta may eventually be able to automatically generate personalized content for each user based on their interests and preferences.
Featured Image: Dennis Diatel/Shutterstock
