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pww.comMeta Platforms, Inc., Q3 2024 Earnings Call, Oct 30, 2024 - NasdaqGS:META

NasdaqGS:META

Kenneth J. Dorell [Director of Investor Relations] 💬

Kenneth J. Dorell, Director of Investor Relations, opened the Meta Platforms, Inc. Third Quarter 2024 Earnings Conference Call. He reminded participants that the call would include forward-looking statements and directed them to the earnings press release and Form 10-Q for factors that could cause actual results to differ. He also noted that both GAAP and non-GAAP financial measures would be discussed, with reconciliations available on the company's website at investor.fb.com.

Susan J. S. Li [Chief Financial Officer] 💬

** Key Points Mentioned by Susan J. S. Li:**

  1. Consolidated Results:

    • Q3 total revenue was $40.6 billion, up 19% year-over-year.
    • Q3 total expenses were $23.2 billion, up 14% year-over-year.
    • Operating income was $17.4 billion, representing a 43% operating margin.
    • Net income was $15.7 billion or $6.03 per share.
    • Free cash flow was $15.5 billion.
    • Capital expenditures were $9.2 billion, driven by investments in servers, data centers, and network infrastructure.

  2. Family of Apps Segment:

    • Daily active users across the Family of Apps exceeded 3.2 billion.
    • Q3 total Family of Apps revenue was $40.3 billion, up 19% year-over-year.
    • Ad revenue was $39.9 billion, up 19% year-over-year.
    • Strongest ad revenue growth in Rest of World and Europe (23% and 21%, respectively).
    • Family of Apps other revenue was $434 million, up 48%, driven by business messaging revenue growth from WhatsApp Business.
    • Family of Apps expenses were $18.5 billion, representing 80% of overall expenses.
    • Family of Apps operating income was $21.8 billion, representing a 54% operating margin.

  3. Reality Labs Segment:

    • Q3 revenue was $270 million, up 29%, driven by hardware sales.
    • Reality Labs expenses were $4.7 billion, up 19% year-over-year.
    • Reality Labs operating loss was $4.4 billion.

  4. Business Outlook:

    • Revenue performance driven by engaging user experiences and effective monetization.
    • Focus on improving content recommendations and expanding generative AI and Threads.
    • Optimizing ad levels and enhancing marketing performance.
    • Continuing to invest in infrastructure and talent for long-term returns.
    • Reality Labs expected to see increased operating losses in 2024 due to product development and ecosystem scaling.

  5. Financial Outlook:

    • Fourth quarter 2024 total revenue expected to be in the range of $45 billion to $48 billion.
    • Full year 2024 total expenses expected to be in the range of $96 billion to $98 billion.
    • Full year 2024 capital expenditures expected to be in the range of $38 billion to $40 billion.
    • Significant acceleration in infrastructure expense growth expected in 2025.
    • Fourth quarter 2024 tax rate expected to be in the low teens.

  6. Headcount and Infrastructure:

    • Ended the third quarter with over 72,400 employees, up 9% year-over-year.

    • Growth primarily driven by hiring in monetization, infrastructure, Reality Labs, generative AI, and regulation and compliance.

    • Focusing on streamlining operations to support strategic priorities and maximize flexibility.

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