(San Francisco) Driven by sharp spending cuts and advertiser appetite for Facebook and Instagram, Meta posted even better profits than expected during the summer quarter, but the uncertainty of the global economic situation is weighing on its forecasts.
The social media giant saw its turnover jump 23% year-on-year in the third quarter, to $34 billion, according to its earnings release published Wednesday.
It generated a net profit of 11.6 billion dollars, more than double that of last year at the same period (4.4 billion).
For the current quarter, Meta CFO Susan Li expects revenues of between $36.5 billion and $40 billion, a wide range due to “greater volatility in advertiser demand early in the year.” quarter “.
“Although we do not have significant direct revenues in Israel in the Middle East, we observed a slowdown in advertising spending at the start of the fourth quarter, at the same time as the start of the conflict” between Israel and Hamas, he said. she indicated during the leaders’ conference call.
Meta’s stock, which rose almost 3% during electronic trading after the stock market closed, fell by more than 3% after this conference.
“Investors were a little spooked by these comments,” said Debra Williamson, an independent technology analyst.
Apart from this uncertainty, the market appreciated that the Californian group has significantly reduced its expenses since the start of the year. It now has some 66,000 employees worldwide, 24% fewer than a year ago.
“Tireless”
Boss Mark Zuckerberg welcomed this budgetary discipline, “which gives us stability to carry out our long-term projects, in a very volatile world”.
He explained that his company will invest as a priority in artificial intelligence (AI) in 2024, “without recruiting too much”, by favoring the transfer of employees to teams dedicated to AI.
In late September, Meta unveiled new generative AI products, including chatbots with personalities and new features for its virtual reality (VR) and augmented (AR) devices, Quest headsets and Ray-Ban glasses.
The Californian group thus hopes to catch up in this technology which is generating enthusiasm around the world, and to relaunch the “metaverse”, that is to say its ambition to mix digital universes parallel to physical reality.
“Connected glasses are the ideal vessel for your AI assistant to see what you see and hear what you hear,” said Mark Zuckerberg.
Reality Labs, the branch responsible for developing the metaverse, again lost $3.7 billion in the third quarter, after net losses of $13.7 billion in 2022. Meta expects an even steeper addition next year.
“It will take time to refine all these new features, before hundreds of millions or even billions of people use them,” said the boss.
Until then, “Meta is engaged in a relentless pursuit of growth,” commented Insider Intelligence analyst Jeremy Goldman.
“Captivated”
“We see this with its focus on Reels (video format copied from TikTok, Editor’s note) and the introduction of new ways to generate revenue from businesses on Instagram, Messenger and WhatsApp – not to mention the deep integration of AI in all of its services,” he explained.
Meta also launched a new social network, “Threads”, based on the Twitter model. It now has nearly 100 million active monthly users, said Mark Zuckerberg.
For Jeremy Goldman, Threads has “almost five times fewer daily active users than when it was launched in July”.
And that’s not the only challenge Meta faces. Faced with increased competition from TikTok and Snapchat, “Meta must constantly innovate to keep its audience captivated,” he noted.
Mark Zuckerberg touted that “Reels have increased time spent on Instagram by more than 40% since their launch.”
These attention-grabbing clips are among the features considered harmful to teens by many authorities.
On Tuesday, some 42 attorneys general launched lawsuits against Meta, accusing it of harming the “mental and physical health of youth” with its “addictive” tools.
Already in the crosshairs of American justice for questions of monopoly, the company is also in the process of recalibration in the European Union, which has imposed new obligations on digital platforms.