Meta Platforms, the parent company of Facebook and Instagram, has delivered a stellar performance in the third quarter of this year, surpassing analysts’ expectations and demonstrating substantial revenue growth. The company’s financial results were driven by a combination of strong advertising revenue and ongoing cost-saving initiatives.
In the latest earnings report, Meta announced earnings of $11.6 billion, translating to $4.39 per diluted share, marking an astonishing 164% increase when compared to the same period last year.
Equally remarkable, the company’s quarterly revenue surged to $34.1 billion, reflecting an impressive 23% improvement over the previous year, outperforming the best-case projections of industry analysts. This surge in revenue was primarily attributed to the company’s substantial gains in advertising revenue.
While Meta has been somewhat slower than its tech peers like Microsoft and Alphabet in adopting artificial intelligence (AI) technology, the company is actively working to attract advertisers by introducing AI-driven tools. Just recently, Meta unveiled generative AI tools that empower advertisers to automatically generate new ad copy, background images, and more. Although tech companies have struggled to turn their interest in AI into substantial profits, this move has shown promise in encouraging advertisers on Facebook and Instagram.
Meta also implemented aggressive cost-cutting measures to optimize its financial performance. Starting in November of last year, the company initiated multiple rounds of layoffs, reducing its headcount by at least 21,000 people.
The most recent round of layoffs occurred just this month.
In its earnings report, Meta stated, “Beginning in 2022, we initiated several measures to pursue greater efficiency and to realign our business and strategic priorities. As of Sept. 30, 2023, we have substantially completed planned employee layoffs while continuing to assess facilities consolidation and data center restructuring initiatives.”
Meta’s shares demonstrated resilience, rising nearly 3% in after-hours trading to approximately $308. Despite a 4.2% decline during regular trading hours due to a broader tech sell-off, the stock is now trading at a level consistent with its late 2021 position, just before the price downturn that characterized most of 2022.
