By Sam Boughedda
Meta Platforms (NASDAQ:META) shares jumped before falling in after-hours trading on Wednesday after the company posted third-quarter results, missing analyst profit estimates.
Meta Platforms shares initially rose up to 5% before immediately retracing. They are down over 11% at the time of writing.
The social media and metaverse company reported earnings per share of $1.64, $0.29 worse than the analyst estimate of $1.93, while revenue for the quarter came in at $27.71 billion versus the consensus estimate of $27.57 billion. Revenue decreased by 4% year-over-year, with the company stating that foreign exchange headwinds impacted the number in the quarter.
Costs and expenses came in at $22.05 billion, an increase of 19% year-over-year, which included an impairment loss of $413 million for certain operating leases as part of Meta's ongoing work to align its office facilities footprint.
Family daily active people, which is classed as someone who registered and logged-in to Facebook, Instagram, Messenger, and/or WhatsApp, came in at 2.93 billion on average for September 2022, a rise of 4% year-over-year. Family monthly active people also increased by 4% to 3.71 billion.
Meta's headcount, which has been of much debate recently, was 87,314 as of September 30, an increase of 28% year-over-year. However, it seems to have listened to recent calls to reduce spending and its headcount as the company said that it is making significant changes across the board to operate more efficiently, including holding some team's numbers flat, shrinking other teams, and "investing headcount growth only in our highest priorities." As a result, Meta expects its headcount at the end of 2023 will be approximately in-line with third-quarter 2022 levels.
"While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth. We're approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company," commented Mark Zuckerberg, Meta founder and CEO.
Meta sees fourth-quarter total revenue to be in the range of $30-32.5 billion, with foreign currency assumed to be an approximately 7% headwind to year-over-year revenue growth in Q4. In addition, Meta said operating losses in 2023 for its Reality Labs division "will grow significantly year-over-year."
"Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run," Meta stated.