Meta Platforms beats expectations in its Q3 financials, helped by an ongoing uptick in digital ad spend and cost cutting measures
Meta Platforms has posted impressive financial results in its third quarter as the Facebook parent continues to reap the rewards from strong spending on digital advertising.
Both profits and revenues saw impressive increases, and this was coupled with Mark Zuckerberg’s pledge of a ‘year of efficiency’ in 2023 after a tough 2022.
However a cautionary outlook from CFO Susan Li over potential ad softness going forward due to the Middle East conflict, triggered a hit to Meta’s share price.
Despite this, Meta delivered a very positive set of financial results for its third quarter.
For the period ending 30 September, Meta posted a net profit that had increased by a whopping 164 percent to $11.6bn, from a profit of $4.4bn in the same year-ago quarter.
There was also good news on the sales side, as Q3 revenue rose 23 percent (the fastest rate of growth since 2021) to $34.1bn from $27.7bn a year earlier.
“We had a good quarter for our community and business,” admitted Mark Zuckerberg, Meta founder and CEO.
Digging into Meta’s operating highlights, it revealed that Facebook daily active users (DAUs) were 2.09 billion on average for September 2023, an increase of 5 percent year-over-year.
Facebook monthly active users (MAUs) were 3.05 billion as of 30 September, an increase of 3 percent year-over-year.
Meanwhile ad impressions and price per ad in the second quarter increased by 31 percent year-over-year and the average price per ad decreased by 6 percent year-over-year.
Meta also provided an insight to cost cutting measures, when it revealed that costs and expenses came in at $20.40bn, a decrease of 7 percent year-over-year.
Year of efficiency
This has no doubt been helped by the huge numbers of job losses at the firm in the past 12 months, which has now left Meta with a total workforce of 66,185 as of 30 September 30.
This was a decrease of 24 percent year-over-year.
Meta said that a substantial majority of the employees impacted by the layoffs are no longer included in its reported headcount as of 30 September, and it has “substantially completed planned employee layoffs while continuing to assess facilities consolidation and data centre restructuring initiatives.”
The scaling back of Meta’s real estate portfolio comes amid Meta’s efficiency drive after a tough 2022, where it contended with a post-pandemic slump in digital ads, coupled with heavy spending on the Metaverse that unsettled some investors.
Zuckerberg recognised this investor concern in February this year, after Meta posted a notable decline in profits, coupled with a third straight quarter revenue decline, which led him to promise investors that 2023 would be a “year of efficiency”.
As part of that Meta had already announced back in November 2022 that it was axing 13 percent of its employees, or roughly 11,000 jobs.
Then in March 2023 CEO Mark Zuckerberg informed staff that he had made the “difficult decision” to axe another 10,000 positions.
In April this year Meta began laying off technical staff.