Meta's September quarter profits above Wall Street's forecasts on Wednesday, demonstrating the company's “year of efficiency” turnaround approach. After a tough 2022, Meta claims it has “substantially completed” its layoffs cost-cutting strategy.
Facebook reported 23% year-over-year quarterly revenue growth to $34 billion, above analysts' $33.5 billion forecast. Meta reported net income of about $11.6 billion, more than twice the year-ago quarter's earnings, which had decreased by half.
The company's primary advertising sector also showed improvement. September quarter ad impressions across all Meta applications rose 31% year-over-year. The average ad price fell 6% year-over-year. Still, it's slower than last year's 18% drop in average ad price.
Meta is utilizing artificial intelligence to strengthen its ad targeting technologies to boost advertiser ROI and monetise Instagram's Reels feature. “Reels has graduated from being an early initiative to being a core part of our apps,” Zuckerberg said on an analyst call Wednesday.
Cohen said Meta's strong quarter supports the idea that marketers are prioritizing market giants like Facebook and Instagram over smaller social media networks.
Snap, another social media platform, reported on Tuesday that some advertisers temporarily paused their spending after the Israel-Hamas war began earlier this month, raising questions about the impact on the digital advertising industry.
Meta confronts further problems. A day earlier, dozens of states sued Facebook for damaging teenage users' mental health with addicting features like limitless news feeds and frequent notifications that need constant attention. Meta denied the charges, stating it has over 30 tools to help kids and their families.
Zuckerberg said Wednesday that Meta's efficiency objective won't alter. In the September quarter, the firm had its greatest operating margin in two years. The CEO expressed his enthusiasm for maintaining this discipline. He said AI will be the company's greatest investment in 2024.
Threads, Meta's Twitter competitor, has over 100 million monthly active users, Zuckerberg claimed. After a boom in sign-ups and a drop in activity after its July launch, the site is steadily attracting active users. Zuckerberg said the site has a “good chance” of reaching 1 billion users in the next years if it expands.