Meta’s Q3 ad revenue drives record quarterly growth
Total revenue
Yesterday, Meta reported its third-quarter earnings. The company reported a record $40.59 billion, exceeding analysts' expectations of $40.29 billion. This marks a 19% increase compared to the same quarter last year. Meta says this growth is largely credited to Meta’s ongoing investments in artificial intelligence and its ad business.
Net income for Q3 2024 reached $15.69 billion, a 35% year-over-year increase and well above analysts’ predictions. Earnings per share (EPS) landed at $6.03, surpassing Wall Street's expectations.
Meta’s ad revenue
According to the report, Meta’s ad revenue reached $39.9 billion for the quarter, up 18.7% year-over-year. It accounted for over 98% of the company’s total revenue. The average price per ad increased by 11%, while ad impressions across Meta’s suite of apps rose 7% from last year.
Meta’s CEO, Mark Zuckerberg, said more than one million advertisers have adopted Meta's generative AI advertising tools, which drive the company’s ad business.
Meta’s user base
Daily active users across Meta’s platforms averaged 3.29 billion in September, a 5% increase from the previous year. This is slightly below analysts’ projections of 3.31 billion.
Meta’s share dip
Despite the record earnings, Meta’s stock dropped more than 3% following its earnings call. However, the company said it plans to continue investing in AI infrastructure. “This might be the most dynamic moment I’ve seen in our industry,” Zuckerberg said. He added that Meta’s focus on AI advancements includes Meta AI, Llama, and AI-powered wearables.
Meta expects Q4 revenue of $45-$48 billion, in line with market expectations. It forecasts 2024 capital expenditures of $38-$40 billion, with strong growth in 2025. However, it states that ongoing regulatory efforts in the U.S. and E.U. could affect its business and financial outcomes.
The company has introduced several updates. It launched Movie Gen, a set of AI models that can generate realistic videos from text prompts or edit existing ones. Meta plans to integrate this feature into Instagram by 2025. The platform also introduced a generative AI feature that creates videos from still images. The company is also reportedly developing an AI search tool to compete with Google and Microsoft’s Bing.
Meta’s earnings report follows results from other companies including Google’s Alphabet. Alphabet's ad revenue hit a record $65.85 billion, a 10% rise year-over-year, contributing to its total revenue of $88.3 billion for the quarter.