Meta spotlights AI innovation as Q3 revenue climbs to $34B

Meta’s revenue shows no sign of slowing down, with the social media giant posting revenue of $34.146 billion (A$54.295) in the third quarter of 2023.

Speaking on the third-quarter earnings call, CEO Mark Zuckerberg said the company had recorded its “highest operating margin in two years”, with revenue up 23% year-on-year (YoY) for the quarter ending September 30 2023.

Globally, costs and expenses were down 7% YoY to $20.40 billion (A$32.438 billion), which could be due in part to a global wave of layoffs which has seen Meta’s total headcount decline 24% YoY, to 66,185.

The efforts to make Meta more efficient have been ongoing since the beginning of 2023, with the first nine months of the year having accrued $2.303 billion (A$3.663 billion) in restructuring costs for the business.

During the third quarter Meta rolled out a number of new AI-driven products, including its latest mixed reality VR headset, Quest 3 and a smart glasses collaboration with Ray-Ban. The owner of Facebook and Instagram also launched its own AI studio. Zuckerberg indicated that AI would continue to be at the centre of Meta’s strategy moving forward.

“AI advances are driving a lot of our product and business performance. GenAI will be increasingly important going forward,” Zuckerberg noted on the Q3 earnings call. “We are building foundation models like Llama 2, which we believe is now the leading open-source model, with over 30 million Llama downloads last month.”

As for the growing role of AI in Meta’s ad systems, Zuckerberg said that more than half of the company’s advertisers were using its ‘Advantage+Creative’ tools to optimise images and text in their creative.

The momentum was mirrored in the Australia and New Zealand market, where Meta ANZ managing director, Will Eaton, said the company had “experienced similar growth”.

“Our significant investments into AI have helped deliver strong performance for our advertisers in Australia and New Zealand, and we look forward to helping them further grow and succeed as we enter the crucial retail season,” he said.

Advertising revenue account for the bulk ($33.643 billion or A$53.529 billion) of overall revenue, while Meta’s Reality Labs venture continues to operate at a loss. While the VR and AR unit brought in $210 million (A$334.131 million) in revenue, it posted losses of $3.742 billion (A$5.954 billion).

Facebook’s daily active users were 2.09 billion on average for September 2023, an increase of 5% YoY. Ad impressions delivered across its Family of Apps are said to have increased by 31% YoY and the average price per ad decreased by 6% YoY.

The company posted a revenue guidance “in the range of $36.5 billion (A$ billion) for Q4 2023 and a $87-89 billion (A$ billion) full-year total expense.

The results comes as research this week from The Money Mongers found Meta’s data mining and sharing practices to be the most invasive compared to other apps.


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