With its third-quarter earnings report, Meta surpassed analyst forecasts, reassuring investors that the troubled tech company is now on the upswing after a string of turbulent years. The company has its “highest operating margin in two years,” according to CEO Mark Zuckerberg.
The business revealed third-quarter revenue of $34.15 billion, rising 23% year over year and exceeding expectations of $33.56 billion. After Meta spent several years in instability as it worked to reform its business model and grow outside the social network tools upon which it built its empire, shares soared in after-hours trading, with results that bolstered investor confidence. Nevertheless, advertising continues to be its main source of income.
Because of the company’s increasing emphasis on algorithmic content suggestion to users, Zuckerberg claimed that overall time spent on Facebook climbed by 7% and that time spent on Instagram increased by 6% “as a result of recommendation improvements.”
Zuckerberg stated that Reels, Meta’s short-form video platform, “continues to do very well” and has contributed to a 40% increase in time spent on Instagram since its inception. He also predicted that discussions with businesses, perhaps enabled by AI, will become “the next pillar of our business.”
Similar to several tech firms, Meta has hurriedly embraced the rapidly expanding artificial intelligence movement, placing a significant emphasis on AI technologies in its most recent financial reports. According to Jesse Cohen, senior analyst at Investing.com, Meta’s impressive report demonstrates that their efforts are bearing fruit. Cohen also said that it was “a blowout quarter” for the software company.
The report, which comes after the two prior quarter reports showed better-than-expected revenues, is Meta’s most lucrative quarter in years.