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Meta Platforms (NASDAQ: META)
Q3 2024 Earnings Call
Oct 30, 2024, 5:00 p.m. ET

Meta Platforms Reports Strong Q3 2024 Earnings, Highlighting Growth and AI Innovations

Call Overview

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Krista, and I will be your conference operator today. Welcome to Meta’s third-quarter earnings conference call. All lines are currently muted to avoid background noise.

After the presentations, there will be a question-and-answer session. [Operator instructions] This call will be recorded. Thank you. Kenneth Dorell, Meta’s director of investor relations, you may begin.

Ken Dorell — Director, Investor Relations

Thank you. Good afternoon, and welcome to the Meta Platform’s third-quarter 2024 earnings call. Joining me today are Mark Zuckerberg, CEO; and Susan Li, CFO. Before we begin, I want to remind everyone that our comments today will include forward-looking statements.

Actual results may vary significantly from these forward-looking statements. Factors that could cause discrepancies are noted in our earnings press release and in our quarterly report on Form 10-Q filed with the SEC. Any forward-looking statements made today are based on current assumptions, and there’s no obligation to update them based on new information or future events. During this call, we will provide both GAAP and non-GAAP financial measures.

Key Highlights and Future Directions

A reconciliation of GAAP to non-GAAP measures is included in today’s earnings press release. The press release and an investor presentation are available on our website at investor.fb.com. Now, I’d like to hand over the call to Mark.

Mark Elliot Zuckerberg — Founder, Chair, and Chief Executive Officer

Thank you, Ken. This quarter has shown strong business momentum aligned with our long-term vision for AI and computing. We estimate that over 3.2 billion people use at least one of our apps daily. The adoption of Meta AI and Llama is accelerating, solidifying our leadership in these areas.

Let’s highlight some of our app developments. WhatsApp remains one of our fastest-growing services, with an impressive 2 billion calls made globally each day. Meanwhile, Facebook is seeing positive trends among young adults, particularly in the U.S.

On Instagram, user growth persists robustly. We recently introduced teen accounts with enhanced protections concerning who they can message and the content they can see. Threads, our new community platform, is now attracting nearly 275 million monthly active users, with over 1 million new sign-ups each day.

Engagement continues to rise. We aim for Threads to evolve into our next major social app. We are also making strides with our AI capabilities, enhancing nearly all segments of our work, from user engagement to long-term service development.

This year, Meta AI has surpassed 500 million monthly active users. Updates to our AI-driven feed have resulted in an 8% increase in engagement on Facebook and a 6% uptick on Instagram. Over 1 million advertisers utilized our generative AI tools to create more than 15 million ads just last month. Businesses employing image generation see a 7% rise in conversions, indicating significant potential for further growth.

Our newly released Llama 3.2 includes advanced small models optimized for devices and open-source multimodal models. We’re collaborating with businesses to simplify usage and are extending our efforts to the public sector for Llama adoption within the U.S. government.

The Llama 3 models mark a significant turning point in industry standards. I am particularly enthusiastic about the upcoming Llama 4, which is in advanced stages of development. This iteration is being trained on what we believe is the largest model cluster to date, using over 100,000 H100s, surpassing all known benchmarks.

We anticipate the smaller Llama 4 models to launch early next year, offering new capabilities and improved performance. I believe that open-source will emerge as the most trusted and efficient option for developers, and I’m proud of Llama’s leading role in this movement.

As we prepare our budget for next year, it’s evident that there are new opportunities to leverage recent AI advancements, promising substantial ROI in the coming years. We will continue to invest significantly in our AI infrastructure as part of our future planning.

Meta Highlights AI Integration and Strong Q3 Performance

Meta is making significant strides in wearable technology and artificial intelligence. The recently launched Ray-Ban Meta glasses showcase this trend, allowing users to take photos, videos, listen to music, and make calls. The standout feature, however, is the Meta AI integration, which provides users with real-time assistance throughout their day. With these updates, the glasses can answer questions, remind users of important details, and even translate languages directly into their ears.

It is believed that glasses could be the perfect device for AI integration, as they allow the AI to interact with the user’s surroundings. Demand remains high for the glasses, with the new clear edition selling out rapidly and reselling for over $1,000 online. Meta has expanded its collaboration with EssilorLuxottica, aiming to create future generations of stylish, smart eyewear.

At the recent Connect event, Meta also unveiled Orion, its first full holographic AR glasses. This project has been in development for nearly a decade, signaling exciting possibilities in blending the physical and digital realms. The ambition is to deliver visually appealing glasses that enhance user experiences, bridging distances between people, regardless of their locations.

Meta additionally introduced the Quest 3S mixed-reality headset, an upgrade to the Quest 3, featuring high-quality color pass-through and a new chipset, now priced at $300. Early reviews have been favorable, setting high expectations for its performance during the upcoming holiday season.

Summarizing these advancements, it has been an encouraging quarter for Meta. The current industry landscape presents remarkable opportunities, and the focus remains on leveraging these to build exciting technologies. Achievement in this venture could mean significant benefits for Meta and its collaborators.

As always, appreciation goes to the teams, partners, and investors supporting this journey. Now, I’ll turn the discussion over to Susan.

Susan Li — Chief Financial Officer

Thank you, Mark. Good afternoon, everyone. Let’s dive into our consolidated financial results. All comparisons made are on a year-over-year basis unless stated otherwise. For Q3, total revenue reached $40.6 billion, a rise of 19% or 20% when adjusted for currency.

Expenses for the quarter amounted to $23.2 billion, up 14% from the previous year. Notably, costs involved in revenue increased by 19%, largely due to higher infrastructure costs. Research and development expenses were up by 21%, affected by increased headcount and associated infrastructure costs. Marketing and sales expenses saw a slight decrease of 2%, primarily because of lower restructuring outlays.

General and administrative costs fell by 10%, due primarily to reduced legal expenses. Meta finished Q3 with over 72,400 employees, marking a 9% increase year over year, mainly from hiring in key areas like monetization, infrastructure, and Reality Labs. The operating income for the third quarter was $17.4 billion, resulting in a 43% operating margin, and our effective tax rate was recorded at 12%.

Net income stood at $15.7 billion, equating to $6.03 per share. Capital expenditures, which include principal payments on finance leases, were $9.2 billion, driven by investments in servers, data centers, and network infrastructure. Some of these expenses were influenced by the timing of server deliveries scheduled for the next quarter. Free cash flow was reported at $15.5 billion.

In Q3, we initiated a debt offering of $10.5 billion, repurchased $8.9 billion of Class A common stock, and dispensed $1.3 billion in dividends to shareholders, concluding the quarter with cash and marketable securities totaling $70.9 billion against $28.8 billion in debt.

Moving to segment performance, let’s review the Family of Apps. In September, our community across this segment grew, with over 3.2 billion people engaging with our apps daily.

For Q3, total revenue for the Family of Apps reached $40.3 billion, an increase of 19% year over year. Specifically, ad revenue was $39.9 billion, also up 19% or 20% when adjusted for currency. The largest contributor to ad revenue growth stemmed from the online commerce sector, followed by healthcare and entertainment. The strongest ad revenue growth was seen in the Rest of World and Europe at 23% and 21%, respectively.

Asia Pacific observed an 18% increase, while North America grew by 16%. Ad revenue growth varied geographically, with North America and Europe at 21%, Rest of the World up 17%, and Asia Pacific showing the slowest growth at 15%. This slowdown reflected a return to typical demand levels following a peak from China-based advertisers. Total ad impressions served across our platforms saw a 7% increase, while the average price per ad rose by 11%.

Impression growth was primarily fueled by gains in Asia Pacific and Rest of World, while pricing increases resulted from heightened advertiser demand and better ad performance. Family of Apps’ other revenue hit $434 million, up 48%, led by growth in business messaging through the WhatsApp Business platform.

Most of our investments continue to target the Family of Apps. In Q3, expenses for this segment amounted to $18.5 billion, accounting for about 80% of our total expenses, which rose 13% due to increased infrastructure costs and headcount. Operating income from the Family of Apps achieved $21.8 billion, yielding a 54% operating margin.

Turning to Reality Labs, Q3 revenue reached $270 million, a 29% increase driven by hardware sales. Expenses within this segment were $4.7 billion, an increase of 19% year-over-year, largely due to headcount-related costs and infrastructure expenses. The operating loss for Reality Labs was reported at $4.4 billion.

Looking ahead, two key drivers shape our revenue potential: the ability to deliver engaging user experiences and effective monetization of that engagement over time. We are committed to enriching the experiences users have within our apps while investing in long-term initiatives with potential for future engagement growth.

Recently, we have seen year-over-year growth in daily active usage across both Facebook and Instagram, as evident from recent developments. Facebook’s introduction of a unified video player in June has resulted in a 10% increase in time spent watching videos. As part of evolving Facebook’s video offerings, we plan to enhance the standalone video tab to feature a full-screen viewing experience in the U.S. and Canada, enabling users to enjoy videos more immersively. This rollout is expected to reach a global audience soon.

Meta’s Strategic Advances: Boosting Engagement and Revenue in 2025

In early 2025, Meta is seeing success with Instagram Reels, where more than 60% of recommendations are now based on original posts in the U.S. This shift not only helps users discover unique content but also supports budding creators.

Innovative Recommendation Systems Are on the Rise

Previously, Meta used separate ranking systems for its various products. Due to limitations in scaling these systems, last year the company developed new ranking architectures that efficiently learn from larger data sets.

These new architectures are currently being applied to Facebook’s video ranking systems, which has led to more relevant recommendations and increased watch time for video content. Meta is now looking to extend these improvements to other platforms. A future goal includes utilizing cross-surface data, which would enable the sharing of insights across different applications, enhancing personalized recommendations. This ambitious plan will take time, requiring simultaneous exploration of various options.

Progress on Engagement Through AI Innovations

Beyond recommendations, Meta is focusing on other areas like generative AI and its social platform Threads. The usage of Meta AI is growing as it becomes available in more countries and languages. Enhancements made in recent months have made the AI more engaging and user-friendly.

Recently, voice interaction was added, allowing users in the U.S., Australia, Canada, and New Zealand to communicate with Meta AI naturally. Additionally, users in the U.S. can now upload photos to learn more about them, write captions, and edit images using simple text prompts, thanks to the capabilities of the Llama 3.2 model.

Monetization Strategies: Focusing on Ad Efficiency

Turning to revenue drivers, increasing monetization efficiency is crucial. This includes optimizing ad placement within organic content. Meta is exploring growth opportunities for ads in lower-monetizing formats, especially video content. Recent changes to Facebook’s video tab have resulted in faster growth of organic impressions compared to viewing time, creating more advertising opportunities.

Across Facebook and Instagram, the company is refining when and how ads are shown during a user’s session. This strategy aims to enhance revenue without increasing the number of ads. Furthermore, improving ad performance also involves adopting new modeling techniques. Now, the ad system can analyze the sequence of user actions around ad views, leading to anticipated better audience responses. Early tests show a 2% to 4% increase in conversions following the implementation of these new models.

Ad Innovation: Customizing Performance for Businesses

Meta is evolving its advertising platform to align with individual business objectives. In Q3, updates to ads ranking and optimization methods considered more factors from the user journey, promising an increase in Meta-attributed conversions noted by advertisers’ third-party tools. Advertisers can also customize campaigns to focus on objectives like incremental conversions.

Advantage+ solutions, including creative ad tools, continue to gain traction as advertisers see improved performance. Earlier this month, new features for video generation and image animation began testing, with broader availability expected next year.

Long-Term Investments Drive Future Growth

Meta remains committed to a long-term business strategy, investing in opportunities projected to generate returns over varying timelines. The company plans to strengthen both short-term revenue growth and long-term infrastructure improvements.

Investments in Reality Labs have responded positively to the unexpected success of smart glasses. Likewise, scaling up generative AI infrastructure is a priority, setting the stage for future market adaptations.

Financial Outlook: Anticipating Robust Revenue

Looking ahead, Meta expects its fourth-quarter 2024 total revenue to fall between $45 billion to $48 billion, with foreign currency fluctuations playing a negligible role in growth. For expenses, the full-year total is projected to be $96 billion to $98 billion, reflecting a modest adjustment from earlier estimates. Operating losses in Reality Labs are expected to increase significantly in 2024 due to ongoing developments.

Regarding capital expenditures, the anticipated range for full-year 2024 is now $38 billion to $40 billion. Significant growth in capital expenditure is anticipated for 2025, emphasizing the company’s commitment to enhancing infrastructure.

As Meta navigates these strategic initiatives, it aims to solidify its market position and enhance user experiences across its platforms.

Meta Reports Positive Growth and Investment Plans Amid Regulatory Landscape

Impacts of Infrastructure Expansion on Finances

Looking ahead, we anticipate slower growth next year, mainly due to increased depreciation and operating expenses associated with our expanded infrastructure fleet. As we evaluate upcoming expenses, it’s clear that strategic investments in infrastructure will influence our financial results.

Tax Rate Expectations and Regulatory Challenges

Regarding taxes, we expect our fourth-quarter 2024 tax rate to remain in the low teens if there are no significant changes in the tax landscape. We are actively monitoring a challenging regulatory environment, particularly with increasing legal pressures in both the EU and the U.S. These developments could have considerable implications for our business and financial outcome.

Quarterly Review and Future Opportunities

In conclusion, this quarter has been strong for our company. Our global user base continues to expand, and we are experiencing momentum in our core business areas. We see promising opportunities to drive growth in 2025 and beyond. Now, Krista, let’s transition to the question-and-answer portion of the call.

Questions & Answers:

Operator:

Thank you. We will now begin the question-and-answer session. [Operator instructions] Your first question comes from Brian Nowak with Morgan Stanley. Please go ahead.

Brian Nowak — Analyst

Thank you for the opportunity. I have two questions—one for Mark and another for Susan. Mark, can you share insights into the recurring interactions and query types for Meta AI and their commercial intent? Moreover, how do you plan to establish your search capabilities in-house compared to working with partners?

And Susan, regarding headcount, you mentioned significant infrastructure investment in ’25. How should we think about headcount relative to infrastructure goals versus 2024?

Susan Li — Chief Financial Officer

Thank you, Brian. Your first question touches on the types of recurring interactions with Meta AI. We are thrilled with Meta AI’s progress; it is on track to become the world’s most utilized AI assistant by year-end, boasting over 500 million monthly active users. We note that users frequently engage the assistant for information gathering and how-to tasks, the latter being the predominant use case. Users also utilize it for content discovery and image generation, both showing considerable popularity.

In the near term, our goal is to enhance Meta AI’s value, which we believe will lead to more diverse queries over time, including those that may generate revenue. Regarding how we use information, Meta AI pulls data from across the web and cites source material from our search engine partners, such as Bing and Google.

Your second question concerns our headcount approach for 2025. We are currently refining our budget for that year, which is why we’ve adjusted our forward guidance. Our focus will be on strategic investments in areas like monetization, infrastructure, Reality Labs, and general AI. While we don’t have specific numbers to share now, we are considering various factors to support these investments, weighing potential returns and strategic value, all while streamlining our other operations.

Operator:

Your next question comes from Eric Sheridan with Goldman Sachs. Please proceed.

Eric Sheridan — Analyst

Thank you for taking my question. Building on Brian’s inquiry, I want to dive deeper into your insights about the opportunities AI presents for your platform. Mark, what specific learnings do you glean regarding AI’s application across your business as you plan strategically?

Mark Elliot Zuckerberg — Founder, Chair, and Chief Executive Officer

The key takeaway is that AI holds broad applicability across many products. We see significant benefits in enhancing the relevance of features like Feed and Reels, improving ad targeting, and assisting advertisers in content creation. AI will also support compliance operations. Moreover, it enables the development of entirely new services, such as Meta AI and the Ray-Ban Meta glasses, illustrating how essential AI is in innovating our offerings.

As we move forward, we are prioritizing the introduction of AI services that cater to both consumer and business needs. Our ambition is to allow businesses to easily set up AI agents for customer service and sales. While some of these initiatives may not yield profits in the immediate term, we are optimistic about long-term engagement and monetization possibilities within our core business.

Operator:

Your next question comes from Doug Anmuth with JPMorgan. Please go ahead.

Doug Anmuth — Analyst

Thank you for taking my questions. I’d like to follow-up on Meta AI…

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Meta’s Future: Expanding AI Capabilities and Capital Spending Insights

Understanding AI Growth Within Meta

Mark Zuckerberg, Meta’s Founder and CEO, addressed recent inquiries about the expanding functionality of the company’s AI tools. He hinted at significant developments on the horizon but did not provide specific details regarding new capabilities associated with the upcoming Llama 4. Zuckerberg mentioned that each major update brings substantial new capacities. However, he noted that the focus for now remains on growing the core functionality of Meta AI and its business applications.

Capex Trends and Expectations for 2025

Susan Li, Meta’s CFO, discussed fourth-quarter capital expenditures (capex), projecting a significant rise due to increased server spending and data center investments. She explained that some deliveries were delayed, leading to cash flow delays into Q4. Li emphasized the inherent variability in capex from quarter to quarter, cautioning against using any single quarter as an indicator for future spending trends. Overall, she affirmed that Meta plans to continue ramping up infrastructure investments in 2025.

AI’s Impact on Productivity and Headcount Flexibility

Analyst Justin Post then asked about AI’s role in enhancing employee productivity at Meta. CFO Susan Li expressed enthusiasm about incorporating AI internally but admitted that quantifiable results were not currently available. Several projects are underway to promote efficiency among teams, particularly in areas like coding and content moderation. Solutions like Meta’s internal assistant are being adopted, with hopes of generating considerable productivity improvements over time.

Li also touched on headcount strategies, indicating that investments are evaluated rigorously based on their potential return on investment (ROI). Meta is considering its workforce in alignment with both short-term efficiency and long-term growth, particularly regarding generative AI and Reality Labs projects.

Innovating Through Llama and Infrastructure Development

In response to Ross Sandler from Barclays, Mark Zuckerberg elaborated on how standardized Llama models could benefit Meta’s overall ecosystem. By leveraging insights gained from a broad range of developers, Meta aims to stimulate internal innovation. He also addressed the need for vast computing capabilities, estimating that achieving their generative AI goals could require hundreds of billions in computational expenditures. Zuckerberg acknowledged the challenges in rapidly scaling infrastructure and promised to share more details as plans develop.

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Meta’s Vision for AI: Unpacking Llama and Threads’ Growth

Founder, Chair, and Chief Executive Officer

Absolutely, let me shed some light on the advancements with Llama. There are two main areas of improvement: quality and efficiency.

Many independent developers and researchers enhance Llama since it’s open-source. This collaboration makes it easy for us to integrate their improvements into our Meta products, such as Meta AI, AI Studio, and business AIs. More importantly, increased efficiency translates to serious cost savings. If someone discovers how to enhance performance by 20%, that could significantly reduce our operational expenses.

This insight draws parallels to our experience with Open Compute. By sharing our architectures and designs, we found that the industry tended to standardize around them, leading to suggestions that helped in cutting costs. Currently, one of our major expenses comes from chips. As Llama gains traction, companies like NVIDIA and AMD are optimizing their chips to work better with Llama, which in turn benefits all users, including us.

In essence, being part of a collaborative ecosystem ensures we enhance our products, rather than working in isolation. This collaborative approach is why we view openness as advantageous for our business. Regarding infrastructure, our teams have effectively managed to expand capabilities at a faster rate than we initially anticipated this year. While this has led to higher costs, I’m pleased to see our team executing in a way that allows us to build capacity.

Investing in infrastructure may not be what investors want to hear in the short term, but I believe the long-term opportunities are immense. We are committed to significant investments in this area and proud of our teams’ accomplishments in establishing robust capacity to deliver top-tier models and products.

Operator

Your next question comes from Ronald Josey with Citi. Please go ahead.

Ronald Josey — Analyst

Thank you for taking my question. Mark, regarding Threads and its rapid rise with 275 million monthly active users, what are your thoughts on its evolution, especially regarding monetization and user growth?

Susan, with prices increasing 11% this quarter, can you elaborate on the pricing trends on the platform, particularly how greater advertising demand and improved ad performance contributed to this change?

Susan Li — Chief Financial Officer

Thanks, Ron. We’re seeing solid progress with Threads, consistently rolling out new features and enhancing our ranking systems.

The user growth is encouraging, particularly in significant markets like the U.S., Taiwan, and Japan. Recently, we’ve introduced several features, such as account insights for businesses and creators to track their posts’ performance, and the ability to save multiple drafts. We’re also focused on our goal to integrate Threads with the metaverse.

As for monetization, we don’t anticipate Threads becoming a major revenue source in 2025. We’re primarily pleased with the user growth and are dedicated to enhancing features that users value, ensuring continued engagement.

Regarding the increase in our average price per ad, there was an 11% year-over-year growth propelled by strong advertiser demand and improved ad performance. We observed a slight acceleration in CPM growth from 10% in Q2, partly due to lower impression growth in Q3. The dynamics affecting ad pricing are complex, involving various auction factors that fluctuate due to impressions.

We’re focused on the metrics that matter most, such as the conversions we deliver to advertisers. Ensuring they gain more value over time is crucial. The blended reported price per ad encompasses numerous factors, which complicates direct comparisons. However, we remain committed to improving conversion rates, which typically leads to higher CPMs as we provide more conversions per impression.

Operator

Your next question comes from Ken Gawrelski with Wells Fargo. Please go ahead.

Ken Gawrelski — Analyst

Thank you for the opportunity. I’m curious about the broader ecosystem. How far do you think we are from a surge of third-party AI applications, especially on the consumer side? While we see more on the enterprise side, when might we witness increased consumer AI applications? How does Meta fit into this evolving landscape, given its historical roles in mobile and desktop internet development, as well as its current position as an infrastructure player?

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Meta CEO Discusses Future Innovations and Financial Outlook

Mark Elliot Zuckerberg — Founder, Chair, and Chief Executive Officer

Meta is actively developing various consumer products that promise to enhance user experience. Zuckerberg shared insights about Meta AI, AI Studio, and business AIs, emphasizing their potential value for app creators.

Another opportunity lies in using AI to improve the content users see on platforms like Facebook and Instagram. Historically, the feed began as a way to see updates primarily from friends. Over time, this expanded to include creator content. Currently, a significant amount of what users see isn’t from friends or followed accounts. Instead, it includes algorithmically chosen recommendations from creators. Looking ahead, Meta plans to introduce AI-generated and AI-summarized content, which Zuckerberg believes will enhance user engagement on these platforms. While it’s still in testing, he anticipates that this feature will grow in importance over the next few years, though its impact may not be felt until 2025.

Zuckerberg stated that alongside AI innovations, developers will find opportunity with Llama 2, which could support various applications.

Operator

Your next question comes from the line of Youssef Squali with Truist Securities. Please go ahead.

Youssef Squali — Analyst

Thank you. Mark, it’s noted that Meta AI now scans the web to answer a wide range of inquiries, including current affairs. Given that there are over 10 million advertisers utilizing your robust return on ad spend (ROAS) model, are there plans to explore advertising on Meta AI’s commercial queries? Additionally, concerns have been raised about Reality Labs and its substantial losses, projected at over $20 billion this year. Are we nearing peak losses, and which forthcoming products show the most promise?

Susan Li — Chief Financial Officer

I appreciate the questions, Youssef. Regarding ads for commercial queries, we are primarily focused on enhancing the consumer experience of Meta AI at this moment. We hope to broaden its query capabilities over time, leading to eventual monetization. For now, our priority lies with the user experience before we delve into monetization strategies.

As for Reality Labs, we are not sharing specific projections beyond 2024. However, as we approach the 2025 budgeting process, we are considering where to strategically invest. Exciting developments, particularly with our smart glasses, suggest strong consumer interest. Reality Labs remains a key long-term priority, with plans for significant investment in our ambitious product roadmap.

Ken Dorell — Director, Investor Relations

Krista, we have time for one last question.

Operator

Your last question comes from the line of Mark Mahaney with Evercore ISI. Please proceed.

Mark Mahaney — Analyst

I have two questions. This year, we have seen numerous major events—such as elections in the U.S., Europe, and India, as well as the World Cup—that could influence ad revenue. Are there insights on how these events might impact 2024 and beyond? Additionally, could you elaborate on WhatsApp’s monetization status and its potential growth?

Susan Li — Chief Financial Officer

Thanks, Mark. Regarding the revenue landscape for 2024, historical data shows that major events like the Olympics usually contribute minimally to ad revenue. This year didn’t deviate from that. As we look toward Q4 and next year, we remain optimistic about growth, largely due to robust global advertising demand and our consistent improvements in ad performance. However, the macroeconomic environment remains unpredictable, which is reflected in our revenue guidance.

On the topic of WhatsApp monetization, our focus is on ‘click-to-message’ advertising, which is gaining traction. We continue to see strong growth in click-to-WhatsApp ads, particularly in markets like Brazil. In the U.S., while it’s still early, we’re witnessing progress. Efforts to boost the efficiency of these ads will contribute to greater opportunities in the future.

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WhatsApp’s Paid Messaging Boosts Revenue Growth in Q3

Paid Messaging Surges, Fueling Family of Apps

During the recent earnings call, Meta Platforms shared that its Family of Apps revenue increased by 48% in Q3, largely due to WhatsApp’s paid messaging feature. This service is experiencing strong growth, marking it as the main contributor to this revenue spike.

Moreover, the volume of paid messaging conversations is on the rise. This increase comes as more businesses are choosing to adopt paid messaging, along with a higher volume of interactions per business.

Ken Dorell — Director, Investor Relations

Thank you for joining us today. We appreciate your attention and look forward to our next conversation.

Operator

[Operator signoff]

Participants on the Call

Ken Dorell — Director, Investor Relations

Mark Elliot Zuckerberg — Founder, Chair, and Chief Executive Officer

Susan Li — Chief Financial Officer

Analysts:

Brian Nowak — Analyst

Eric Sheridan — Analyst

Doug Anmuth — Analyst

Justin Post — Analyst

Ross Sandler — Analyst

Ronald Josey — Analyst

Ken Gawrelski — Analyst

Youssef Squali — Analyst

Mark Mahaney — Analyst

Ken Dorell — Director, Investor Relations

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is on The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.

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