- Meta reported third-quarter earnings after the closing bell on Wednesday.
- Its quarterly revenue of $40.59 billion exceeded analysts’ estimates. User growth slightly missed expectations.
- Meta’s stock was down more than 3% in after-hours trading following its call with analysts.
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Meta delivered better-than-expected revenue and profit in its third-quarter earnings on Wednesday. The company also made it clear it would not be slowing down on its spending while building out its AI infrastructure this year — and expects those costs to increase in 2025.
“We had a good quarter driven by AI progress across our apps and business,” Meta CEO Mark Zuckerberg said. “We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”
The company’s revenue for the quarter was $40.59 billion, ahead of the expected $40.25 billion. Earnings per share were in at $6.06, above the expected $5.25.
In its core business of advertising, Meta said its average price per ad had increased 11% year over year.
However, the company missed expectations for user growth. It said daily active users grew 5% year over year to 3.29 billion. That was lower than expectations of 3.31 billion daily users.
Shares dipped more than 3% following Meta’s earnings call with analysts, during which Zuckerberg talked through the company’s AI investment strategy and said that “this might be the most dynamic moment I’ve seen in our industry.”
The company’s big bet on AI, which includes both training its own AI models and launching consumer products across its platforms powered by them, continued to drive up its costs.
“We continue to expect significant capital expenditures growth in 2025,” Meta said. The company expects “a significant acceleration in infrastructure expense growth next year as we recognize higher growth in depreciation and operating expenses of our expanded infrastructure fleet.”
Zuckerberg and CFO Susan Li were asked questions about the hefty costs related to AI spending and infrastructure on the earnings call.
Zuckerberg said Meta was building out its infrastructure faster than initially expected. While that means higher expenses reflected in its earnings, it also positions the company to continue with that pace of growth, he said. The CEO said he was “happy the team is executing well on that,” even if racking up bigger expenses is “maybe not what investors want to hear.”
Meta expects 2024 losses from its Reality Labs segment, which is responsible for the company’s AR, VR, and metaverse products, to “increase meaningfully year-over-year.” The company has lost tens of billions on the initiatives over the years. Asked by an analyst if Meta was nearing “peak” losses for the division, Li didn’t answer directly but said Reality Labs is “clearly one of our strategic long-term priorities.”
Meta has also been hiring, with its head count up 9% year-over-year. Meta said it is examining where to invest in strategic opportunities, including AI, infrastructure, and Reality Labs, while keeping an eye on ways to streamline operations elsewhere. Since late 2022, Meta has laid off more than 20,000 employees.