The strong pull in advertising revenue has allowed Meta, the company that owns Facebook, Instagram and Whatsapp, to increase its turnover by 23% in the third quarter of the year, up to 34,146 million dollars (about 32,300 million euros at the exchange rate). current change). Furthermore, it has done so in the middle of a cost containment exercise, with which profits have skyrocketed by 164%, to $11,583 million. Both turnover and profits have far exceeded analysts’ forecasts.
The increase in profit occurs despite the fact that the company has incurred restructuring charges amounting to $2,303 million, derived mainly from severance payments and real estate reorganization. Meta has reduced its workforce by 24% in one year and closed September with 66,185 employees. The third quarter figures represent a clear acceleration in revenue growth, which is increasing at the fastest rate in two years. In the accumulated of the first nine months of the year, billing increases by 12%, to 94,791 million dollars and profit improves by 35%, to 25,081 million.
Advertising revenues, which account for almost the entire group’s business, increased by 23% year-on-year in the summer quarter and show the strength of the business that was already indicated by the Google accounts presented this Tuesday. The company has increased advertising insertions by 31%, while the average price has been reduced by 6%.
The advertising bonanza makes it easier for Meta to invest in artificial intelligence and virtual reality. The applications business segment, where Facebook and Instagram are located, had an operating profit of 17,490 million in the quarter, while the Reality Labs area, where the metaverse and virtual reality devices are included, continues to be ruinous and had operating losses of 3,742 million, according to a presentation to company analysts. Meta expects those operating losses to increase “significantly” in 2024.
What investments in artificial intelligence have been useful for has been to improve its advertising management, especially since Apple imposed new privacy requirements that damaged its commercial strategy.
“We had a good quarter for our community and our business,” said Mark Zuckerberg, founder and CEO of Meta. through a statement. “I am proud of the work our teams have done to advance artificial intelligence (AI) and mixed reality with the launch of Quest 3, Ray-Ban Meta smart glasses and our AI studio.”
Meta expects its revenue to be between $36.5 billion and $40 billion in the current quarter, which represents growth between 13.5% and 24% compared to the fourth quarter of 2022. Expenses for the year as a whole are They will be between 87,000 and 89,000 million dollars, compared to the forecast of 88,000 to 91,000 million that it had until now. Of course, after this year of maximum austerity, expenses will grow next year to around 94,000-99,000 million dollars, according to what the company has announced.
The company has presented results the day after 41 states have filed lawsuits accusing its social networks of being addictive and harmful to minors. The lawsuits claim that “Meta has repeatedly misled the public about the substantial dangers posed by its social networks.” They argue that Mark Zuckerberg’s company has developed its products to make them addictive for minors and has targeted them especially at those under 13 years of age, despite the fact that the use of Facebook and Instagram is discouraged for this population.
Meta has appreciated 140% on the stock market so far this year after the falls in 2022. The company is valued at about $770 billion. After the publication of the results, the price has reacted upward outside of normal market hours, with increases of around 3%.
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