Meta user growth fails to hit the mark

Meta Platforms, the world’s largest social media platform, forecast revenue for the current quarter above market expectations but disappointed investors on user growth numbers.
The California-based technology company, which was founded in 2004 and owns Facebook, WhatsApp, Instagram and Threads, a rival to X, projected strong holiday advertising spending, which it said should continue to cover the cost of its massive artificial intelligence investments.
The company expects between $45 billion and $48 billion in fourth-quarter revenue, compared with analysts’ estimates of $46.31 billion.
Meta said that in the three months to the end of September the number of daily active users grew by 5 per cent from a year ago to 3.29 billion, which was lower than analyst expectations of 3.31 billion.
Meta shares fell by $10.80, or 1.8 per cent, to $581 in after-hours trading in New York, valuing the business at $1.5 trillion. It warned of “significant ­acceleration” in infrastructure expenses related to its artificial intelligence push.
Like its big tech peers, Meta has ­invested heavily in data centres to capitalise on the generative AI boom. ­Unlike providers of cloud services it does not expect to earn money from those investments right away and therefore is more subject to scrutiny from investors around its spending. The company kept costs in check in the third quarter, with total expenses of $23.2 billion and capital expenditure of $9.2 billion.
It reported third-quarter revenue of $40.59 billion, against analysts’ estimates of $40.29 billion. Net income rose 35 per cent compared with a year earlier to $15.7 billion, representing the company’s lowest year-on-year growth for net income since the second quarter of last year.
Mark Zuckerberg, 40, co-founder and chief executive of Meta, said: “We have strong momentum with Meta AI, Llama adoption and AI-powered glasses.”
He changed Facebook’s name to Meta in 2021 to shift the company’s focus to the metaverse, in which he has invested billions of dollars.