Meta beats revenue expectations amid AI push, but ad sales growth slows

The numbers

$40.58 billion: Meta's Q3 revenue rose 19% year-over-year, narrowly beating Wall Street's estimate of $40.3 billion.

96%: The share of meta revenue in the third quarter driven by ad sales. This is a slight decline from the second quarter, when advertising accounted for 97% of total revenue of $36.5 billion.

$15.69 billion: Net income increased 35% year-over-year, or $6.03 per share, a quarterly record.

3.29 billion: Average daily active users across all meta apps in September 2024, up 5% year over year.

48 billion dollars: The high end of Meta's fourth quarter revenue forecast, in line with analyst forecasts.

The conversation about the water cooler

As the AI ​​arms race heats up in Silicon Valley, Meta is increasing its investments in the technology, particularly to strengthen its ad targeting and content recommendation capabilities.

In October, Meta introduced new generative AI advertising tools focused on video creation. The company also places its AI chatbot everywhere, including WhatsApp, Messenger and Instagram. And it signed a multi-year deal with Reuters that will allow Meta AI to provide real-time news and current events using Reuters' news content. According to company estimates, Meta AI has more than 500 million monthly active users.

Meanwhile, Meta is reportedly developing an AI-powered search engine to reduce its dependence on Google and Microsoft's Bing, which currently supports Meta AI.

The tech giant also introduced new features on Threads in the third quarter, including insights into post performance for businesses and creators – although chief financial officer Susan Li said Meta doesn't expect the platform to be “a significant revenue driver in 2025.”

Important quotes

“Over time, there will be more and more searches that people use (meta-AI) for, and there will be opportunities for monetization,” Li said.

“On the enterprise side, we want to further develop our vision of helping small businesses or other businesses set up an AI agent in a few clicks that can help provide customer service and sell things to all of their customers around the world,” said CEO Mark Zuckerberg. “This is a huge opportunity.”