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Meta, the parent of Facebook and Instagram, more than doubled profits and beat revenue expectations in the third quarter while the advertising slide dissipated, even as it warned costs will continue to rise into 2024.
Revenues at the social media group rose 23 per cent to $34.1bn compared with the same period last year, above analyst expectations of a rise to $33.4bn.
Net income rose 164 per cent to $11.6bn, well above the consensus forecast for $9.4bn, in a sign that chief executive Mark Zuckerberg’s recent restructuring of the business has paid off.
In what he has labelled a “year of efficiency”, Zuckerberg has slashed jobs and cut costs in a bid to revive Meta from a period of sluggish growth and investor concern over his costly bet on the metaverse, which has yet to bear fruit.
Despite the bumper quarter, the company said that expenses would rise in the year ahead — giving a range of between $94bn and $99bn in 2024, compared with a range of between $87bn to $89bn expected in 2023.
This would be driven by higher infrastructure costs, Meta said, as it continues to invest in data centres and servers supporting AI and the metaverse. Meta added that it also expected higher payroll expenses as it staffed up again in priority areas, shifting its “workforce composition toward higher-cost technical roles”.
For Reality Labs, its virtual and augmented reality department, it anticipates operating losses to “increase meaningfully year-over-year” as it scales the metaverse investment with little short-term revenue boost.
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