The day after news of lawsuits from both US competition authorities (FTC) and a group of US attorneys general, Meta Platforms reports third-quarter numbers.
In the third quarter, the tech giant had revenue of $34.1 billion and pre-tax profits of 14 billion kroner.
This means that revenues increased by 23 percent compared to the third quarter of last year.
It had previously expected a cap of $33.5 billion and pre-tax profits of $11.5 billion, according to Bloomberg estimates.
“We had a strong quarter,” notes founder and CEO Mark Zuckerberg in a message.
The Facebook owner’s numbers come on the heels of both Microsoft and Google owner Alphabet providing generally good results over the past three months.
Like Alphabet, advertising revenue is a source of income for Meta. After four consecutive quarters of weak or even negative annual growth between the beginning of 2022 and early this year, things changed in the second quarter of 2023 when advertising revenues increased by 11.9 percent year over year, reaching $31.7 billion.
In the third quarter, advertising revenues rose to $33.6 billion, compared to $27.2 billion in the third quarter of last year.
It’s this revenue that almost exclusively makes up Meta’s top line and comes from ads on Facebook, Instagram, Messenger and other services. Since the end of 2021, Meta has been reporting this under the “App Family” section.
A small percentage of total income, but still a few billion in Norwegian krone, comes from the “Reality Labs” segment. This sector includes the tech giant’s investment in AR (augmented reality) and VR (virtual reality), which recently received a new boost through smart glasses in collaboration with eyewear manufacturer Rayban.
However, the sector has a money-making advantage, with losses ranging between $2.6 and $4.3 billion in the last 10 quarters. Meta and Mark Zuckerberg have spent several billion dollars building the so-called metaverse, which the CEO previously said would be the future of the company.
In the third quarter, Reality Labs reported a new loss of $3.7 billion, on revenue of $210 million. The company states that losses are expected to be greater in the future due to continued product development for augmented reality and virtual reality.
In the fourth quarter, the company estimates that the upper limit will range between $36.5 and $40 billion, that is, at least four billion dollars more than it was in the fourth quarter of 2022.
In 2024, the company announces increased costs related to both infrastructure and salaries.
Stock market rise
Along with other U.S. tech giants — Microsoft, Tesla, Amazon, Apple, Alphabet, and Nvidia — Meta has so far this year helped maintain several benchmarks.
The big narrative in 2023 has been artificial intelligence and how the already dominant players will capture a part of the rapidly advancing market. Meta has also jumped on the AI wave, in the form of a chatbot named Llama 2.
Meta’s share is up 143% so far this year, and at US$783 billion, it is the seventh-largest company in the world by market capitalization.
This significant rise means that founder and CEO Mark Zuckerberg, who owns a large portion of his personal assets in Meta stocks, has seen his wealth rise by about $70 billion so far in 2023. According to the Bloomberg Billionaires Index, he is the tenth richest person in the world, with a fortune estimated at With $113 billion, second only to Warren Buffett.
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