Meta tops revenue targets but warns of ‘significant’ cap ex spending next year

Shares of the Facebook parent fell almost 3% in after hours trading immediately after revealing its third quarter results. Nevertheless, Meta said revenue for the quarter grew 19% year-over-year, to $40.59 billion, above analysts’ expectations. Net income rose 35% to $15.68 billion, and earnings per share came in $6.03, also above expectations.

The total number of people using one of Meta’s apps each day, including Facebook, Instagram and WhatsApp, grew by 5% to 3.29 billion.

Meta’s CEO Mark Zuckerberg has emphasized the company’s focus on cost discipline, describing an ongoing effort at “efficiency.” Operating expenses growth of 13% during the quarter was slower than the company’s revenue growth, helping lift Meta’s operating profit margins to 43% versus the 40% level one year ago.

Yet Meta’s Reality Labs, the organization within Meta responsible for VR and AI work, lost a whopping $4.42 billion in the third quarter, up 18% from a year ago, and Meta warned that it expected the divison’s “operating losses to increase meaningfully.”

The company lifted the bottom-end of its planned capital expenditures range for the year, forecasting a cap ex between $38 billion to $40 billion, up from the previously guided range of $37 billion to $40 billion. And the company warned that it would continues to expect “significant capital expenditure growth in 2025.”

CFO Susan Li said that revenue in the fourth quarter should ranged between $45 billion and $48 billion, representing 12% to 20% growth from the prior year.

In a prepared statement, CEO Mark Zuckerberg said: “We had a good quarter driven by AI progress across our apps and business. We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”