Meta Platforms revenue was up 19 percent to $40.6 billion in Q3 compared to the same period one year earlier. Profit rose to $15.7 billion — a 35 percent increase from 2023. The company believes that its years of investments in adtech, artificial intelligence and the metaverse are starting to pay off. In Q3, Meta reported $23.2 billion in expenses and capital expenditures of $9.2 billion. And the company isn’t taking its foot off the accelerator, having increased its annual spending forecast by $1 billion to a minimum of $38 billion. Additionally, Meta’s advertising revenue for Q3 was just a tick under its high-end spend projection of $40 billion.

“The third quarter figures underscored how Meta’s digital advertising business continues to buttress its extravagant spending,” writes The New York Times, adding that the company’s “huge spending spree has spooked Wall Street,” with shares of Meta falling more than 2 percent on the Q3 news.

But not everyone is skeptical. “Meta is firing on all cylinders and AI is clearly driving growth,” Investing.com Senior Analyst Jesse Cohen told NYT, adding that “investors appear to be disappointed about the company’s forward guidance and the rising costs needed to develop AI features.”

Or maybe it’s the metaverse-driven Reality Labs unit, which saw losses widen to $4.3 billion for the quarter, per the earnings release.

“AI is actually adding to the bottom line,” Cerity Partners Portfolio Manager Justin DuMouchelle explains in The Wall Street Journal. In addition to increased demand for its flagship Llama model, the social media Meta AI product now has “more than 500 monthly actives,” Meta founder and CEO Mark Zuckerberg said on the earnings call.

On the B2B side, Zuckerberg says that in excess of one million advertisers used the company’s GenAI tools “to create more than 15 million ads in the last month, and we estimate that businesses using Image Generation are seeing a 7 percent increase in conversions,” he noted, identifying this as an area for further growth.

Meta’s investments have also been bearing fruit in areas like market-leading Quest VR/AR headsets and its Ray-Ban Meta smart glasses. The eyewear, which NYT calls “a surprise hit” whose sales “exceeded expectations,” are in demand, particularly in Europe.

“Meta said it had 3.29 billion daily active people for its apps in the quarter, including for Facebook, Instagram, Messenger and WhatsApp, up 5 percent from a year earlier and less than 1 percent from June,” according to WSJ, which reports that the company’s microblogging service Threads “now has 275 million monthly active users.”

Related:
Tech Giants See AI Bets Starting to Pay Off, The Wall Street Journal, 11/1/24
Meta and Microsoft: AI’s Spending Champs Won’t Be Tapping the Brakes, The Wall Street Journal, 10/31/24
Meta Misses on User Growth, Warns of 2025 Jump in AI Spending, CNBC, 10/30/24
Meta AI Has More Than 500 Million Users, Engadget, 10/30/24