Meta once again beat Wall Street’s projections when it reported Q3 2022 earnings on Wednesday, showcasing the progress of its “year of efficiency” turnaround. The Facebook parent company posted 23% revenue growth to over $34 billion compared to the same quarter last year, surpassing estimates.
Meta Exceeds Expectations, Doubles Profits in Q3
Meta also more than doubled its profits versus Q3 2021. The results indicate Meta’s cost-cutting strategy is paying off after a difficult 2022. Shares rose in after-hours trading following the better-than-expected report.
User Growth Trends Positive Amid Competition
In addition to the financial figures, Meta also saw relatively robust user growth across its family of apps including Facebook. Facebook’s monthly active users were up 3% year-over-year to over 3 billion.
This suggests Meta is holding its own against rivals like TikTok that have disrupted the social media landscape. Ad impressions increased by 31%, another encouraging metric for Meta’s core advertising business.
Focus on Efficiency, AI to Continue for Meta
On an analyst call, Meta CEO Mark Zuckerberg reiterated that efficiency will remain a priority, citing the company’s highest operating margin in two years. Meta is using AI to improve ad targeting and reel monetization.
As macro conditions stabilize, advertisers appear to be spending more on leading platforms like Facebook and Instagram. Meta remains a key beneficiary of advertising rebound.
Threads Gaining Traction in Quest to Rival Twitter
Zuckerberg also revealed that Threads, Meta’s Twitter competitor, now has almost 100 million monthly active users. Though engagement declined after an initial surge, steady growth since suggests Threads is gaining traction.
Zuckerberg believes the platform has a “good chance” of reaching 1 billion users within a few years. As Meta diversifies its apps, Threads represents a potential long-term opportunity.
Meta CFO Susan Li did note the company has seen some ad spend softness in early Q4 corresponding to the outbreak of the Israel-Hamas war, indicating geopolitical events can still impact revenue.
But Meta’s strong Q3 performance shows the company’s strategic shifts are paying off, even as it faces macro uncertainty and competitive pressures.