Facebook's parent company's revenue hits record high thanks to advertising

Advertising contributed 98.5% of revenue to Meta - Facebook's parent company - in the third quarter, helping the company's revenue hit a new peak.

Meta Platforms announced its third-quarter financial report on October 25, recording its largest quarterly revenue since going public more than a decade ago, thanks to accelerating advertising demand, cost-cutting policies and new AI technology.

Meta's revenue increased more than 23% year over year to $34.1 billion. This is the third consecutive quarter of revenue growth for Meta. Last quarter's increase was also the largest in two years. The company's net income also doubled year over year to nearly $11.6 billion.

Advertising accounted for 98.5% of Meta's revenue in the third quarter, at $33.6 billion. Meta said average ad prices fell 6% year over year, though that was a slowdown from the 18% decline in the third quarter of 2022.

Facebook's daily active users increased from 2.06 billion in the second quarter to 2.09 billion in the third quarter. Analysts had forecast 2.07 billion.

Meta’s performance this year is a complete reversal from last year, with investors pleased with the company’s improved targeting and advances in artificial intelligence. The recovery in advertising is key for Meta, after Apple’s privacy overhaul in 2021 wiped out $10 billion from Meta’s revenue in 2022.

Meta CEO Mark Zuckerberg said AI will be the area they invest most heavily in by 2024. To avoid massive hiring, they plan to transfer employees from other projects.

Meta shares rose 4% in after-hours trading after the report was released. The stock has risen 140% year to date.

Meta is the third major U.S. tech company to report earnings this week. Microsoft and Alphabet both reported strong earnings earlier this week, with Alphabet benefiting from advertising revenue and Microsoft seeing better-than-expected growth in its cloud business.

Ha Thu (according to WSJ, CNN)

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