Meta revenue grows at quickest pace in two years on digital ad strength

Meta, the owner of Facebook and Instagram, beat expectations for third-quarter profit and revenue on Wednesday, helped by its ongoing austerity drive.

Meta Platforms beat expectations for third-quarter profit and revenue on Wednesday, helped by its ongoing austerity drive and a recovery in digital advertising spending ahead of the holiday season.

The owner of social media platforms Facebook and Instagram, which reported its best operating margins in two years, also trimmed expenses for the year.

But the company forecast 2024 spending that will exceed Wall Street estimates, as it pushed hiring needs from this year to the next and continued to invest in AI infrastructure. It also suggested the conflict in Israel and Gaza could dampen fourth-quarter sales.

Shares of Meta, which have risen nearly 150 per cent so far this year, flip-flopped in after-hours trading, initially gaining three per cent before reversing to trade three per cent below the closing price two hours later.

Shares were down nearly five per cent in early trading Thursday.

Meta, which also owns WhatsApp, has been climbing back from a bruising 2022, when investors fled as the company spent billions on the metaverse – the shared virtual world environments which people can access via the internet – amid competitive pressures and a post-pandemic slump in digital ads.

It has shed 21,000 employees since autumn 2022, particularly in non-engineering roles. The company is keeping focus on engineering talent as it makes plans to rev up hiring again next year, executives said.

CEO Mark Zuckerberg, who promised in February that 2023 would be Meta’s “year of efficiency,” told analysts on a conference call that artificial intelligence would constitute the top investment priority for 2024. The company will de-prioritize a number of non-AI projects to avoid adding too much headcount, he said, without providing specifics.