Meta Platforms’ multi-year investments in the metaverse and AI showed promise in Q3, as revenue grew 19 per cent year-on-year to $40.5 billion and net income increased 35 per cent to $15.6 billion.

CEO Mark Zuckerberg and CFO Susan Li used an earnings call to highlight how AI is driving the company’s growth in the face of its spending spree.

Total costs and expenses rose 14 per cent to $23.2 billion and capex was $9.2 billion, mainly due to building its AI infrastructure and the metaverse.

Zuckerberg noted more than 3.2 billion people use one or more of the company’s apps daily.

Improvements to its AI-driven feed and video recommendations led to an 8 per cent increase in time spent on Facebook and 6 per cent on Instagram, Zuckerberg said.

“More than a million advertisers used our genAI tools to create more than 15 million adverts in the last month and we estimate that businesses using image generation are seeing a 7 per cent increase in conversions, and we believe that there’s a lot more upside here,” he said.

Pumped
Zuckerberg added adoption of the company’s open-source Llama 3 models is an inflection point for the industry, while also improving the quality and efficiency of Meta Platforms’ own products.

“I’m even more excited about Llama 4, which is now well into its development.”

Zuckerberg said the smaller Llama 4 models will be ready in early 2025.

Meta Platforms’ Reality Labs unit posted an operating loss of $4.6 billion compared with $3.7 billion.

Li noted Reality Labs expenses of $4.7 billion were up 19 per cent, driven by higher headcount expenses and infrastructure costs.

Staff numbers rose 9 per cent to 72,404.

Zuckerberg said Ray-Ban Meta glasses and its Quest 3S mixed-reality headset are proof integrating AI into wearables is starting to pay off.

“This may be the most dynamic moment that I’ve seen in our industry, and I am focused on making sure that we build some awesome things and make the most of the opportunities ahead.”

Meta Platforms raised its annual spending forecast from $37 billion to $40 billion to a range of $38 billion to $40 billion.

It expects Q4 revenue of $45 billion to $48 billion.