Facebook parent Meta third quarter earnings missed investor expectations. Meta

Facebook parent Meta third quarter earnings missed investor expectations. Meta

Facebook parent Meta third quarter earnings missed investor expectations

Facebook parent Meta third quarter earnings missed investor expectations.

Meta shares fell more than 10% Wednesday after the tech giant reported third quarter results that missed investor expectations on earnings, but beat them marginally on revenue and user growth. Even though Meta beat analyst expectations on revenue, the amount of money it brought in last quarter was still less than the third quarter of the year prior, marking Meta’s second consecutive quarter of year-over-year revenue declines.
• Average Revenue per User (ARPU): $9.41 vs. $9.83 expected, per StreetAccount

The big picture: It’s been a volatile year for Silicon Valley companies that rely on advertising revenue.
• Google-parent Alphabet said Thursday that ad sales in the third quarter slowed dramatically, causing a steep drop in profits.
• Snap last week reported its slowest-ever quarter for revenue growth since going public in 2017.

Meta shares fell more than 10% Wednesday after the tech giant reported third quarter results that missed investor expectations on earnings, but beat them marginally on revenue and user growth.Why it matters: After decades of unprecedented revenue and profit growth, Meta’s ad business is beginning to slow, thanks to increased competition from TikTok and Apple and overall uncertainty around the economy.Details: Even though Meta beat analyst expectations on revenue , the amount of money it brought in last quarter was still less than the third quarter of the year prior, marking Meta’s second consecutive quarter of year-over-year revenue declines.
• Looking ahead, the company said things will get worse before they get better.
• “While we face near-term challenges on revenue , the fundamentals are there for a return to stronger revenue growth ,” Meta founder and CEO Mark Zuckerberg said. He noted that the company is focusing on prioritization and efficiency to help navigate economic headwinds.
• Meta said it forecasts revenue of $30 billion for the fourth quarter , coming in shy of analyst expectations. The fourth quarter is typically Meta’s most lucrative time period, due to spikes in advertising around the holiday season.Yes, but: The company did report some good news. It grew its Facebook daily active user base by 3% last quarter , a positive sign for investors that may be concerned about TikTok’s impact on the app’s ability to stay competitive, especially with younger users.By the numbers via CNBC:
• Earnings per share (EPS): $1.64 vs $1.89 expected, per Refinitiv
• Average Revenue per User (ARPU): $9.41 vs. $9.83 expected, per StreetAccountThe big picture: It’s been a volatile year for Silicon Valley companies that rely on advertising revenue .
• Google-parent Alphabet said Thursday that ad sales in the third quarter slowed dramatically, causing a steep drop in profits.
• Snap last week reported its slowest-ever quarter for revenue growth since going public in 2017.What to watch: Meta faces pressure from investors to cut costs and drive revenue s ahead of a possible recession.
• In Wednesday’s letter to investors, the company said it is “making significant changes across the board to operate more efficiently.” Meta has already said that it would slow hiring and cut budgets.