On October 25th, American technology giant Meta released financial reports showing that sales in the third quarter increased by 23% year-on-year to $34 billion; The profit also more than doubled year-on-year, with a net profit of nearly 11.6 billion US dollars.
Meta executives stated that the growth in revenue is largely driven by Chinese companies. However, due to concerns about the uncertainty of the company's fourth quarter profit outlook, Meta's stock price plummeted by more than 3% after the financial report was released.
Boosted by businesses such as artificial intelligence, Meta's stock price has risen by about 140% so far this year.
Susan Li, the finance director of Meta, told analysts on Wednesday's earnings conference call that Chinese companies have played an important role in the company's growth. Chinese e-commerce and game advertisers have had strong spending in the past quarter, investing heavily in Meta platforms including Facebook and Instagram.
From a regional growth perspective, the "rest of the world" experienced the strongest growth, reaching 36%. The growth of these regions is also driven by the "going global" of Chinese companies, such as the increasing advertising demand from Chinese advertisers targeting users in the Brazilian market.
She also stated that despite some 'fluctuating periods', Meta has witnessed a' long-term trend of overall growth 'in the Chinese internet industry, as Chinese companies are seeking to expand their business globally, and Meta has become an important platform.
The financial report shows that the advertising display frequency of all Meta applications increased by 31% year-on-year in the third quarter. Although the average unit price of advertising decreased by 6% year-on-year, the decrease was significantly slower than the same period last year, with an 18% decrease in advertising unit price.
However, due to regional conflicts, Meta is uncertain about the outlook for the fourth quarter and has stated that it is beginning to observe weak advertising demand.
This year is Meta's "year of efficiency", and the company is striving to achieve its strategic goal of turning losses into profits through significant layoffs and cost reduction. At present, the company has basically completed the layoff part of the cost reduction plan.
Meanwhile, Meta is still increasing its investment in artificial intelligence, including research and development of virtual reality and augmented reality devices. Zuckerberg referred to the metaverse as the "next frontier".
However, the financial report shows that the Reality Labs department where the business is located is still experiencing continuous losses. In the third quarter, Reality Labs' revenue decreased by 26%, resulting in a loss of $3.74 billion. The department has lost over $21 billion since the beginning of last year.
Meta launched the Quest 3 VR head display device in September, with a starting price of $499, $200 higher than the previous generation Quest 2 device, but $500 cheaper than the high-end Quest Pro VR and far lower than the $3499 price of Apple's Vision Pro device.