Strong Q3 Performance from META with Revenue Climbing 23%
META’s Earnings Report Indicates Digital Advertising Revival
Meta, the esteemed parent company to prominent platforms like Instagram, WhatsApp, Threads and Messenger, recently announced a tremendous leap of 23% in its Q3 revenue, bringing it to $34.15 billion. This impressive growth from Meta indicates a resurgence in the digital advertising sector.
Increased Ads Viewed and Decreased Price Per Ad
META’s Q3 report revealed a 31% spike in the number of ads viewed, in comparison to the same period last year. Meanwhile, META Plan’s ad prices experienced the smallest decline in seven quarters, falling just 6%. META’s Chief Financial Officer, Susan Li, noted on an analyst call yesterday that “the year-over-year decline in pricing was driven by strong impression growth, especially from lower monetizing surfaces and regions,” while promising continuous improvements in ad targeting and measurement to enhance results for advertisers.
Cost Cuts and User Growth Contribute to Profit Growth
META’s robust profit growth was also attributed to an effective cost-cutting strategy. Over the past year, META has downsized its workforce by approximately a third and streamlined its organizational structure. As a result, expenses fell 7% from a year earlier to $20.4 billion.
Furthermore, the Q3 report reflected a surge in user engagement across META’s key markets, including the United States and Canada. Daily usage spanned approximately 3.14 billion people, marking a 7% increase compared to last year, and nearly 4 billion individuals (half the world’s population) utilized at least one META’s app each month.
Meta’s Dependence on AI Technology Increasing
META has heavily leveraged AI in their quest for efficiency and cost reduction. This dependence on AI-powered marketing planning and ad measurement has played a critical role in growth over recent years. However, CEO Mark Zuckerberg highlighted that customer utilization of chatbots is in the early stages and will need further “tuning.”
Zuckerberg conveyed that META anticipates hiring more AI-specialized technologists and increasing its overall headcount in the near future to manage its “sizable hiring backlog.”
As for the current quarter, META forecasts strong performance but cautioned possible volatility due to disturbances in the Middle East. CFO Li clarified that “it’s hard for us to attribute demand softness directly to any specific geopolitical event,” but the company recognizes that the conflict has influenced its Q4 revenue outlook.
1. How much did Meta’s Q3 revenue increase by compared to the same period last year?
A: META’s Q3 revenue surged by 23%, reaching $34.15 billion.
2. What has driven the drop in ad pricing according to META?
A: META’s CFO, Susan Li, mentioned that the year-over-year ad pricing decline was primarily due to strong impression growth, especially from regions and surfaces with lower monetization.
3. What measures is META, taking to handle potential demand softness due to geopolitical events?
A: META acknowledges the potential influence of geopolitical events on demand and suggests adjustments to its Q4 revenue outlook accordingly, although attributing demand softness to any specific event is a complex task.