Meta Reports Third Quarter 2023 Results

https://investor.fb.com/investor-news/press-release-details/2023/Meta-Reports-Third-Quarter-2023-Results/default.aspx

by loeg • 3 years ago

81 155 3 years ago

investor.fb.com

samspenc3• 3 years ago

Revenue up 23%, from $27.7B to $34.1B YoY.

Net income is up a whopping 143%, from $4.4B to $11.6B - basically went from a 15% to 34% profit margin (and in line with profit margin numbers from 2021 and prior)

No wonder stock is up 4% after earnings.

rvz• 3 years ago

Exactly. But but but we were told that Meta was collapsing 1 year ago for sure due to their massive spending in VR and AR with the stock falling to less than $90.

Its almost as if that full emotion took over the markets over and switched on to complete fear mode and was a complete nothing to see here in the end showing that the so-called death of Meta Platforms Inc was over exaggerated by the media.

Another earnings beat and it is business as usual, just like before. [0]

[0] https://news.ycombinator.com/item?id=32256465

ksec2• 3 years ago

Yes and I remember it keeps being repeated since, dare I say the birth of HN? And every few years someone who were happy and bother to summarise how great Facebook is still doing during their quarterly or yearly results, just to irritate the vast majority of HN who wishes to see its death.

matwood• 3 years ago

Net income is up a whopping 143%, from $4.4B to $11.6B

Zuck finally got over his bad VR trip. He was spending current FCF on his bad adventure and it was only a matter of time before someone got him to pull back. They can still do a lot in the space without dropping billions/quarter.

justapassenger2• 3 years ago

Their VR division is still loosing billions and they guided increased loses as they invest more.

SpaceManNabs3• 3 years ago

Zuck finally got over his bad VR trip

Whether the trip was bad or not is up to debate, but what makes you think Zuckerberg is quitting on AR/VR? His recent interviews suggest anything but that.

gardenhedge5• 3 years ago

What do people want Zuckerberg to do? Not make bets about future tech?

HDThoreaun3• 3 years ago

Reality labs lost more this quarter than last years.

paxys2• 3 years ago

The death of Meta was greatly exaggerated. Wish I had gone in when the stock was taking a beating. They are now up ~250% YoY.

paulpauper4• 3 years ago

I recall seeing all those 'Meta is dead' youtube videos last year. Who cares if you're wrong as long as you get that ad $, right. Even if the Metaverse is a dud and a money pit, the rest of the company is firing on all cylinders.

oldbbsnickname5• 3 years ago

They're spending $10B/yr on servers alone without any product or plan for their use. It's a waste of money if there isn't a roadmap, which there still isn't.

EDIT: I work for Meta as an IC6.

HDThoreaun3• 3 years ago

ATT and the metaverse stuff was a tough one two punch for them and then investors got spooked about mark being completely unaccountable. But they always had a strong business, mark just had to remind investors that he still cares about profitability which he did with the layoffs.

firebirdn99• 3 years ago

It was down 4% earlier today from yesterday. Just back to where it was.

polygamous_bat• 3 years ago

Fun fact, down 4% and then up 4% puts you slightly below where you were, since 4% of 100 is larger than 4% of 96.

paulpauper4• 3 years ago

up 4% after a 200% gain over past year...crazy. a year ago ppl were writing the obituaries for Meta, with viral videos on YouTube about Meta's imminent demise getting millions of views...how poorly those have aged. I have never seen as big of a turnround as this...a half a trillion dollar company with as much upside as penny stocks but much smoother, less risk.

ksec2• 3 years ago

This got me interested in what did they spend between the $34B revenue and $11.6B Net income.

Cost of revenue 6,210 Research and development 9,241 Marketing and sales 2,877 General and administrative. 2,070

$9B in Research and Development. About $3B of that still belongs to Reality Lab.

So even without VR, Facebook still seems to spend relatively a lot of money for their revenue generation. I am surprised by this as I thought their net margin would be quite a bit higher.

samspenc3• 3 years ago

Their profit margins were always around 30% or so, except late-2021 through mid-2022 when it fell dramatically due to higher expenses and (unexpected) flat revenue.

As for $9B in research and development - they have 66K employees now. Say 30,000 of them are in engineering, costing the company $300K on average (salary + bonus + benefits + other expenses), that's $9B right there in research.

grecy• 3 years ago

Went from a 15% to 34% profit margin
Headcount was 66,185 as of September 30, 2023, a decrease of 24% year-over-year.

How to increase profit 101.

almost_usual• 3 years ago

No wonder stock is up 4% after earnings.

This was short lived.

smugma• 3 years ago

Right; down nearly 8% on the day.

nemothekid• 3 years ago

Meta is almost back to 2021 highs, the whole fallout with ATT and the Metaverse debacle seems to be completely in the rear view mirror now.

I should have held the stock, but it seems after the initial panic, it was like trying to catch a falling knife.

cma• 3 years ago

Inflation adjusted it is still far below 2021 highs.

MuffinFlavored• 3 years ago

sep 10, 2021 - $378.69

oct 25, 2023 - $307.77

would need to be $424.91 "to keep up with inflation"

https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=378.69&year1=2...

paulpauper4• 3 years ago

This is why I tune out the financial media. The media a year ago was saying Meta was on death's door.

IKantRead• 3 years ago

I should have held the stock

I think the most important wisdom in all of quantitative finance is that the expected future value of a stock it it's current value plus the value from the "risk-free" rate.

It happened that Meta did (for now) come back from it's exaggerated death, but just look at Google which took a major hit today.

ipqk• 3 years ago

I actually caught that falling knife at near its exact lowest point ~$90, but then sold it at a 10% gain because I thought it might be a dead cat's bounce.

Point is, hindsight is always 20/20.

Narkov• 3 years ago

Headcount was 66,185 as of September 30, 2023, a decrease of 24% year-over-year.

Huge for a single year.

samspenc3• 3 years ago

Somewhat inline with their announcements. Last year they were at 86000 employees, and announced two rounds of layoffs totaling 21000 (11000 followed by another 10000). This number seems to line up with that.

mschuster91• 3 years ago

How in gods name do they still make such obscene amounts of money?! Like, in my entire social circle including work, no one uses Facebook for more than messaging relatives abroad and most of that has shifted to Whatsapp anyway. Only thing I can imagine is Instagram, but that's gotten completely unusable for me as every second or third post is a fucking ad.

s0rce• 3 years ago

I use marketplace and a few groups because sadly people have migrated to those from other platforms.

lotsofpulp2• 3 years ago

Facebook Marketplace is a good product in my opinion. There is a ton of value in ensuring potential buyers/sellers are not scammers.

bruceb• 3 years ago

Marketplace is decently well done. Still no shortage of scammers.

asadm• 3 years ago

every second or third post is a fucking ad

that's how

random42_• 3 years ago

every second or third post is a fucking ad.

Maybe that's where the money is coming from?

Wytwwww• 3 years ago

Whatsapp

Which Facebook owns as well, not they actually monetize it though.

Belopolye• 3 years ago

I always saw the WhatsApp and Instagram acquisitions as about acquiring potential competitors (protecting revenue) over a desire to generate revenue in and of themselves.

hiq• 3 years ago

https://business.whatsapp.com/

mattbrewsbytes2• 3 years ago

Technically adept people aren't the target market for their advertising platforms but yet they are staffed by ... technically adept people. It confounds me how anyone would want to work there. The money must be really good.

justapassenger2• 3 years ago

Technically adept people also buy things, have family and friends they connect with, want to look at photos, argue on the internet, etc.

Your (and your friends) experience may not be representative of everyone.

WXLCKNO2• 3 years ago

Pretty sure the money/benefits/ option grants are all ridiculous and world class.

mden• 3 years ago

Money and tech. Their dev experience is imo better than Google. I wouldn't be surprised if it's the best out of all large tech companies.

catlover762• 3 years ago

The money and benefits are good, the prestige is high, and they do technically cool things.

eilnvlrn3• 3 years ago

It confounds me how anyone would want to work there. The money must be really good.

Why does HN always do this, comment up from their moral high horse? Someone works in big tech then they must be a sell out doing it for the money. Also, if big tech is off limits then by that logic I assume so are big banks, big pharma, big oil etc etc. Almost feels like only start ups qualify as employment opportunities then perhaps, but even they most likely are using frameworks/tech by big tech (is that ok or is that selling out too). Where does one work then? Is it that hard to fathom that people have different moral codes and care about different stuff. Such comments almost feel like sour-grapes.

spookie4• 3 years ago

It doesn't need to be about money. Think about research.

They do a lot of it. And honestly? They seem quite more open about it.

peanuty12• 3 years ago

They pay as well as any company in Silicon Valley and better than most.

shmatt• 3 years ago

* Marketplace is the defacto place to buy/sell locally

* Groups are about 1000x better in quality and organic posts than Reddit

haunter• 3 years ago

Marketplace is really really good for local buying/selling. Pretty much my only use case for Facebook but I love it

nicoburns• 3 years ago

A quick Google gives me:

- Number of Facebook users in the world (monthly active users): 2.989 billion (April 2023)

- Number of people who use Facebook each day (DAU): 2.037 billion (April 2023)

- Size of Facebook's global advertising audience: 2.249 billion* (April 2023)

- These latest figures indicate that roughly 37.2% of all the people on Earth use Facebook today

Even if Facebook is losing active users, it has 2 BILLION users.

Source: https://datareportal.com/essential-facebook-stats

s3r3nity• 3 years ago

If ever you want a data point that HN is an echo-chamber sometimes, this number says it all:

Number of people who use Facebook each day (DAU): 2.037 billion (April 2023)

If you estimate ~8bn people in the world, then a quarter of every human on earth use Facebook _daily_.

Yet if you just followed HN threads, you would believe that it's a ghost town and that everyone needs to follow whatever teens are doing.

spacemadness• 3 years ago

That’s not really answering the question though if they are losing users, there is still the question of what accounts for such a surge in revenue.

koyote• 3 years ago

I wonder how correct those numbers are.

Looking at the Philippines, it says they have 91.9 million active users. That's for a population of 113.9 million people (estimate, their latest 2020 census only had 109 million). That means 80% of the TOTAL population of the Philippines is active on Facebook?

Then when you look at the population pyramid you have 30% of that 113 million under 14 years old (around 34 million).

Something does not add up here... But then again, I don't know too many Filipino people, so who am I to say that every person in the Philippines capable of holding a phone is not actually an active Facebook user?

kevmo2• 3 years ago

Every Baby Boomer I know scrolls Facebook all day. The richest demographic are the heaviest users now.

asah• 3 years ago

in my experience, the trolls/etc kinda left and the people who remain are... surprisingly decent.

Eumenes• 3 years ago

Fortune 500 companies have insane advertising spend ... there's not many creative places to park it, so naturally it goes to places like FB.

mvdtnz• 3 years ago

You could read the linked article and find out.

paulpauper4• 3 years ago

How in gods name do they still make such obscene amounts of money?!

Mobile ad CPMS and CPS are insanely high. companies shelling out big bucks for traffic on Meta, Instagram.

ManuelKiessling• 3 years ago

every second or third post is a fucking ad.

Guess there’s your answer — advertisers is the group that actually pays Meta its money.

pclmulqdq• 3 years ago

Instagram. Instagram is hip, college kids today share their "instas" instead of their phone numbers, and it's finally getting monetized.

mensetmanusman3• 3 years ago

The us is 4% of the world, fb is the internet in many countries.

tymscar• 3 years ago

You’re asking how does Meta make so much money and then you say that most of the people moved to a Meta product, WhatsApp.

bni• 3 years ago

In many countries, joining certain real world events having a FB account is mandatory. It sucks but it is the way it is.

ChatGTP3• 3 years ago

I feel the same, I just cannot imagine the value of this product reflecting reality.

I think people are just so addicted to it, but in secret, if you're not an addict, it's confusing.

AustinDev• 3 years ago

Meta could probably get by with 30,000 employees let's see if Zuck is that ambitious.

paxys2• 3 years ago

The goal of a company at that scale isn't go "get by" but rather keep growing infinitely. The majority of the workforce at companies like Meta is always working on new, unreleased projects. So yes, you can cut all of them and suffer no immediate consequences (see – Twitter), but then after the revenue numbers stay flat for a few quarters the shareholders aren't going to be too happy.

rossdavidh2• 3 years ago

Everything you say is true, but I should point out that compared to nearly any other CEO, Zuckerberg doesn't have to care what shareholders think.

huytersd• 3 years ago

To do the bare minimum maybe. To remain a viable, innovative company for decades absolutely not.

ilamont• 3 years ago

So is the Metaverse fever dream truly dead? I see the Meta Quest goggles dropping in price but Meta also began promoting the new Ray Ban "smart glasses":

https://about.fb.com/news/2023/09/new-ray-ban-meta-smart-gla...

WXLCKNO2• 3 years ago

They released a new headset, meta quest 3. Maybe why older models are dropping in price, not sure.

wslh2• 3 years ago

  So is the Metaverse fever dream truly dead?

I don't think so. Even if it's not in this or next cycle the idea of portability between different "worlds" seems reasonable in a future. The problem is if this will happen at the Meta (and others) time or a newcomer will appear.

bartwr• 3 years ago

But we already have this dream. It's called the internet. And video games. And movies. :)

The question of "metaverse" is: 1. Do we need a head strapped device? Does it add enough to the experience to justify it? 2. Do we need those experiences be more connected and owned by one rent collecting platform?

My answer to both is a firm no, both make it strictly worse. But it's a personal answer, we'll see. ¯\_(ツ)_/¯

(Meta obviously wants it to be double "yes" to sell those head strapped devices and collect this rent. But this doesn't make it true)

BoorishBears• 3 years ago

A theoretical metaverse could do a lot of things, but the one thing that made the metaverse economically attractive was essentially becoming a new virtual space for brands to sell. And the excitement for Meta specifically was that they'd get to collect tolls on this new virtual space via hardware and owning the largest properties.

The latter hasn't panned out, but we're seeing the former happen more and more: it's just not as centralized as fantasy versions were.

Fortnite is probably the most successful metaverse at this point, but you see things like Call of Duty placing limited release EVs from GM and famous anime characters being sold as DLC.

Now Prime Video has characters showing up Mortal Kombat as paid extra content, and you're sure to see more and more of these crossovers as brands start to accept the legitimacy of fully immersing their brands in virtual worlds instead of settling for the typical "in-game billboard reference".

ge96• 3 years ago

Their new headset is pretty impressive for its features and price.

Specifically the pass through.

HDThoreaun3• 3 years ago

ad impressions delivered across our Family of Apps increased by 31% year-over-year and the average price per ad decreased by 6% year-over-year.

How the hell do they keep pumping their impression numbers like this? Seriously I have stark memories of seeing these 20%+ numbers on last years earnings and thinking it was a big problem since there's no way it's sustainable at their size but here we go again.

kristopolous• 3 years ago

The ad density has gone up enormously. They introduced a "suggested for you" feature so they could sparse your friends posts and increase the ad quantity between them without it being perceived as such since they occupy the interstitial slots with viral content. That's why it can't be "disabled" - it's not about keeping you on the platform, it's about subtly increasing ad density between the content you actually want to see in the same way local news uses teasers to string the audience along.

Whether this strategy is a level of abusive that leads to atrophy or is sustainable is yet to be determined.

ChatGTP3• 3 years ago

Seriously, we're living in a comedy TV show simulation.

"ad density".

FredPret3• 3 years ago

Zuck builds a massive social network. Critics: he'll never monetize it, as soon as I see an ad, I'm out!

Zuck monetizes the social network and makes billions. Critics: he's managing the business quarter-to-quarter with no vision for the future. Pretty soon it'll be milked dry!

Zuck invests billions in potential future hit technology. Critics: he's lost his mind and should focus on the day-to-day!

ChatGTP3• 3 years ago

Because no one can predict the future.

Maybe by this time next year it will have lost a bunch of money…

Meta Reports Third Quarter 2023 Results

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