By John Meyer, consultant in financial affairs – Eurasia Business News, October 30, 2024. Article No 1277.

Meta Platforms, Inc. recently reported record revenues, but the growth in its digital advertising segment is showing signs of slowing down.

Record Revenue: The company posted $40.59 billion in sales, up 19% compared with a year earlier, slightly beating Wall Street expectations. The revenue growth was slower compared with the April-to-June period, when Meta reported annual revenue growth of 22%. Advertising made up 96% of Meta’s third-quarter revenue.

Fourth quarter revenue is expected to be between $45 billion and $48 billion, versus analysts’ expectations of $46.12 billion, according to FactSet data.

In Q1 2024, Meta had already achieved a total revenue of $36.5 billion, marking a 27% year-over-year increase. Of this, $35.6 billion was generated from advertising, making it the company’s best Q1 performance to date.

User Engagement: The company reported 3.2 billion daily active users across its platforms, which include Facebook, Instagram, Threads, and WhatsApp, representing a 7% increase year-over-year. Additionally, ad impressions rose by 20%, and the average price per ad increased by 6%.

AI Investments: CEO Mark Zuckerberg emphasized the role of AI in enhancing user engagement and ad spending.

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Stock Market Reaction: Following the earnings report, Meta’s stock experienced a significant decline of between 10% and 20% in after-hours trading. This drop was attributed to weaker-than-expected guidance for Q2 revenue and investor concerns over the company’s ambitious AI investments without clear monetization strategies.

Future Outlook: Despite the strong revenue figures, analysts are cautious about Meta’s future growth prospects in digital advertising, especially as competition intensifies and economic conditions fluctuate.

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Overall, while Meta continues to report impressive revenue figures driven by user engagement and AI advancements, the slower growth in digital advertising raises questions about its sustainability moving forward.

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© Copyright 2024 – Eurasia Business News. Article no. 1277.