Meta Q3 Earnings Beat Expectations with 19% Revenue Growth

October 31, 2024 at 6:12:39 AM

TL;DR Meta's Q3 FY24 earnings showed daily active users up 5% to 3.29B and ad impressions up 7%. Revenue increased 19% to $40.6B, beating expectations. EPS was $6.03, also beating forecasts. Q4 revenue is projected between $45B and $48B. Capex for FY24 is expected to be $38-40B, with significant growth in 2025. Despite strong earnings, stock fell 3%. Meta's AI strategy and new AR products are progressing, but the company faces high capital expenditures and legal issues.

Meta Q3 Earnings Beat Expectations with 19% Revenue Growth

Meta Platforms, Inc. (META) reported its fiscal third quarter earnings for FY24, surpassing analysts' expectations on both revenue and earnings per share (EPS). Key highlights include:

Financial Performance

Daily active people increased by 5% year-over-year (Y/Y) to 3.29 billion.
Ad impressions grew by 7% Y/Y.
Revenue rose by 19% Y/Y to $40.6 billion, beating estimates by $0.3 billion.
Operating margin improved by 2 percentage points Y/Y to 43%.
EPS was $6.03, exceeding expectations by $0.74.
Capital expenditures (Capex) for FY24 are projected to be between $38-40 billion, slightly up from the previous range of $37-40 billion.

Q4 and Future Projections

Meta forecasts Q4 revenue between $45 billion and $48 billion, compared to analysts' expectations of $46.09 billion.
Significant capital expenditure growth is expected in 2025, with a notable increase in infrastructure expenses.

Stock Performance

Despite the strong financial results, Meta's stock fell over 3% following the earnings report.

Segment Performance

Advertising revenue was $39.8 billion, slightly above expectations of $39.7 billion.
Reality Labs segment generated $270 million in revenue, below the expected $312 million, and posted a loss of $4.4 billion, better than the anticipated $4.6 billion loss.

AI and Product Development

Meta is advancing its AI capabilities, comparable to Microsoft, Google, and Amazon.
The company is rolling out its Llama family of models across consumer and advertiser products, and offering the platform as open-source software.
Organizations like Accenture, DoorDash, and Goldman Sachs are using Llama to develop AI software.
Meta is developing its own search functionality for its Meta AI service to reduce reliance on Google and Microsoft's search engines.

Recent Developments

Meta Connect conference showcased a prototype of Orion augmented reality glasses and the Quest 3S entry-level augmented reality headset.
The Ray-Ban Meta smart glasses are gaining popularity.
Capital expenditures for the quarter were $9.2 billion.