Meta Platforms’ stock plunged 23 percent on Thursday after the company posted a decline in revenue for 3Q22, the second consecutive quarterly drop.
The company, formerly known as Facebook, reported revenue of $27.7 billion in the quarter. Its costs and expenses rose 19 percent to $22 billion, while net income fell by half to $4.39 billion. The figures were below analysts’ forecasts.
Commenting on the results, CEO Mark Zuckerberg said he was pleased with strong engagement, but acknowledged the revenue challenges.
“The fundamentals are there for a return to stronger revenue growth,” he said in the earnings release. “We’re approaching 2023 with a focus on prioritisation and efficiency that will help us navigate the current environment and emerge an even stronger company.”
Meta has been investing heavily in the Metaverse and artificial technology at a time of increasing economic headwinds. On a conference call with analysts Zuckerberg called for patience for the initiatives to pay off.
Costs and expenses in the quarter rose 19 percent to $22.05 billion, while capital expenditure came in at $9.52 billion. The company also said its headcount had increased 28 percent year-over-year as of the end of September.
Looking ahead for the fourth quarter, Meta said it sees revenue in the range of between $30 to $32.5 billion.
It also sees overall costs slightly lower than initially forecast at about $85-$87 billion this year, compared with an earlier estimate of $85-$88 billion.
Capital expenditure however, will be higher than initial budgets, coming in at a range of $32 billion to $33 billion, compared with prior estimates for $30 billion to $34 billion.
Next year, those costs will rise still further as it invests in data centres, servers and network infrastructure.
“An increase in AI capacity is driving substantially all of our capital expenditure growth in 2023,” it said, estimating the overall figure to be in a range of $34 billion to $39 billion.
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