Meta reported better-than-expected Q3 earnings, driven by growth in advertising revenue and advancements in artificial intelligence (AI), AP News reports.
The company earned $15.69 billion, marking a 35% increase from the previous year, with revenue rising 19% to $40.59 billion, exceeding analyst expectations. However, Meta saw a slight decline in its daily active user count, averaging 3.29 billion, which fell short of analysts’ expectations of 3.31 billion. This discrepancy raises concerns about the company’s ability to generate revenue from a potentially stagnating user base, although analysts noted that AI-powered tools are enhancing user engagement and ad effectiveness.
Meta expects significant infrastructure spending in 2024, especially for AI development, which could lead to increased operating losses in its Reality Labs segment. The company is forecasting fourth-quarter revenue between $45 billion and $48 billion, aligning with analyst expectations of $46.18 billion. However, shares fell about 3% in after-hours trading, as investors expressed concern over rising costs and the company’s forward guidance.
