Mark Zuckerberg, Meta’s chief executive, spent the past two years weathering a slump in digital advertising and cutting costs. This year, he proclaimed, would be a “year of efficiency” for his company.
Some fruits of those labors are now beginning to show.
Meta, which owns Facebook, Instagram, WhatsApp and Messenger, reported on Wednesday that revenue rose 23 percent to $34.15 billion in the third quarter, above Wall Street estimates of $33.6 billion, according to data compiled by FactSet. Profit was $11.6 billion, more than double the $4.4 billion from a year earlier.
Meta’s growth was bolstered by a rebound in digital ads, which has also fueled the financial performance of other companies. On Tuesday, Google reported increased ad sales, with Snap also disclosing rising sales after revenue declined for two quarters.
But Meta’s results were also helped by its cost cuts, as expenses fell 7 percent from a year earlier to $20.4 billion.
The results underscore Meta’s resilience amid a tumultuous few years for Silicon Valley. The company saw record profit and user growth in the early days of the pandemic, as people were forced indoors and connected through their devices and apps. But the easing of the pandemic, combined with higher interest rates and global economic uncertainty, later hit Meta. The company reduced its work force by roughly a third and flattened its organizational structure.
Meta’s user growth continued in some of its key markets, including the United States and Canada. About 3.14 billion people use one or more of the company’s apps every day, up 7 percent from last year.
Meta said it expected revenue in the current quarter to be $36.5 billion to $40 billion. It also forecast that its expenses would be lower next year than previously anticipated, at $87 billion to $89 billion, down from previous guidance of $88 billion to $91 billion. Meta added that it expected its losses from its Reality Labs division, which is working on products related to the metaverse, to continue to increase next year.
“The company may be starting to come out of the woods as the Mark Zuckerberg-led company continues to focus on improving operating efficiency,” said Jesse Cohen, senior analyst at Investing.com.
This is a developing story. Check back for updates.