Coinspeaker
Meta Stock Drops Over 7% despite Reporting Better-than-Expected Q3 2023 Results
Meta Platforms Inc (NASDAQ: META) stock closed Wednesday trading at $299.53, down 4.17 percent from the day’s opening price. The day’s losses continued during the after-hours trading session with a drop of about 3.35 percent following the high-impact news. Notably, Meta reported its Q3 2023 results for the quarter that ended on September 30.
According to the announcement, the company beat analysts’ expectations but issued cautionary statements on fourth-quarter earnings caused by the ongoing Middle East conflict. Nonetheless, Meta stock remains one of the best performers since the calendar flipped in January with a rise of about 150 percent YTD.
Meta Q3 2023 Financial Statement
According to the announcement, Meta reported a revenue of $34.15 billion during the third quarter, whereas analysts surveyed by LSEG expected the social media giant to record $33.56 billion. As for earnings per share (EPS), the company reported $4.39, while analysts surveyed by LSEG expected $3.63. The company highlighted that its revenue increased due to the improved digital ads business after experiencing a tough 2022. Moreover, the company has completed its headcount reduction in a bid to further consolidate and increase the efficiency of its business.
“Beginning in 2022, we initiated several measures to pursue greater efficiency and to realign our business and strategic priorities. As of September 30, 2023, we have substantially completed planned employee layoffs while continuing to assess facilities consolidation and data center restructuring initiatives,” the company noted.
The company’s founder and Chief Executive Officer (CEO) Mark Zuckerberg highlighted that the team of engineers has been focused on building advanced mixed reality and artificial intelligence (AI). Moreover, the company launched Quest 3, Ray-Ban smart glasses, and the AI studio in recent months, which have significantly helped Meta remain competitive among its peers and other tech giants like the X platform.
For the three months that ended on September 30, Meta reported about 2.09 billion daily active users (DAU), while analysts surveyed by StreetAccount expected around 2.07 billion. As for the monthly active users (MAU), the company reported 3.05 billion, which was in line with analysts surveyed by StreetAccount. The average revenue per user (ARPU) came in at $11.23, slightly lower than analysts’ estimate of around $11.05 -according to StreetAccount.
The company highlighted that it has seen an increase of about 7 percent on the average time spent on Facebook and 6 percent on Instagram as a result of improved recommendations. According to the company’s finance chief, Susan Li, online commerce was the biggest contributor to the YoY revenue growth. However, Li highlighted that the conflict in the Middle East has presented notable uncertainty in Q4 results.
“We have observed softer ads at the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook,” Li said on the call with analysts. “It’s hard for us to attribute demand softness directly to any specific geopolitical event.”
Meta Stock Drops Over 7% despite Reporting Better-than-Expected Q3 2023 Results
