Meta’s Q3 2023 Earnings: A Stellar Quarter Amid a Major Rebranding

Meta, the parent company of Facebook, Instagram, WhatsApp and other social media platforms, reported strong financial results for the third quarter of 2023, beating analysts’ expectations on both revenue and earnings. Here are some of the key factors that contributed to Meta’s performance:

Meta’s advertising business is booming, as the company benefits from the recovery of digital ad spending amid the easing of pandemic-related restrictions and the improvement of the macroeconomic environment. Meta’s revenue increased by 23% year-over-year to $34.15 billion, driven by a 31% increase in ad impressions across its family of apps. The average price per ad decreased by only 6%, compared to a 16% decline in the same period last year. Meta’s ad revenue growth was also supported by its artificial intelligence (AI) products, such as Reels, which help to improve ad targeting and monetization.

Meta’s user base continues to grow, as the company attracts more people to its social media platforms. Meta reported that its family daily active people (DAP) was 3.14 billion on average for September 2023, an increase of 7% year-over-year. Its family monthly active people (MAP) was 3.96 billion as of September 30, 2023, an increase of 7% year-over-year. Facebook’s daily active users (DAUs) and monthly active users (MAUs) also increased by 5% and 3%, respectively, year-over-year. Meta’s user growth reflects its ability to offer engaging and diverse content and services to its global community.

Meta’s profitability improved significantly, as the company achieved higher operating margins and lower costs. Meta’s net income more than doubled to $11.58 billion, or $4.39 per share, compared to $4.40 billion, or $1.64 per share, in the same quarter last year. Meta’s operating margin increased to 40%, compared to 20% in the same period last year. Meta’s total costs and expenses decreased by 7% year-over-year to $20.40 billion, as the company completed most of its planned employee layoffs and continued to pursue greater efficiency and strategic realignment.

In summary, Meta delivered a strong quarter for its community and business, showing resilience and innovation in a challenging and competitive environment. The company also announced its new corporate name and vision to build the metaverse, a virtual environment where people can interact with each other and digital content in immersive ways. Meta’s future prospects depend on its ability to execute its ambitious plans and overcome the regulatory and reputational risks it faces.