Meta Platforms is scheduled to announce its Q3 2024 financial results on 31 October 2024, at 7:10 AM AEDT, following the U.S. market's close.
Market participants will be closely monitoring the growth of Meta's ad business as well as investments into AI.
Earnings per share (EPS) is expected to come in at US$5.21, while revenues are expected at US$40.19 billion.
In Q2 2024, Meta’s advertising revenue surged by 22%, significantly outpacing its main competitor, Google.
The trend is anticipated to continue into Q3 2024, with ad revenue projected to grow by 17.1%, while Google is estimated to see a more modest increase of 9.7%.
Meta's substantial investments in artificial intelligence (AI) are also likely to enhance its competitive edge in the digital advertising space, and any unexpected revenue growth will further solidify its market position.
Investors will be keenly observing the improvement in ad pricing, a positive sign following the recovery phase that began in 2023. This performance could indicate Meta's effectiveness in competing against platforms like TikTok.
Further insight into investment spending is also expected. Meta's expenditures on AI, particularly regarding the Llama 3 and the anticipated Llama 4 models, have been considerable, with capital expenditure estimates ranging from US$37 billion to US$40 billion for 2024.
While Llama 4's release is not expected until 2025, indications of how these technologies could bolster revenue will be crucial.
Meta's Reality Labs division, which oversees virtual reality and metaverse initiatives, has been a notable financial burden.
In Q2 2024, operating losses for this segment reached US$4.5 billion, a 20% increase from the previous year. Investors will be looking for insights into spending patterns and the timeline for these investments to generate returns.
Meta anticipates significant capital expenditure growth in 2025, particularly focused on AI research and product development.
Additional metrics that will be under scrutiny include daily active people (DAP), ad impressions, and average price per ad.
In Q2 2024, Meta reported a 7% year-on-year rise in Family DAP, along with a 10% increase in both ad impressions and average price per ad. These indicators reflect robust demand for Meta’s advertising services and the efficacy of its ad targeting capabilities.
Growth momentum is expected to carry into Q3 2024, bolstered by factors such as the upcoming US elections, which are likely to drive substantial political ad spending, alongside a strong US economic outlook that may encourage corporate ad investments.
As of 2:10 pm (AEDT), Friday, October 25, Meta Platforms (META) stock was trading at $567.78, increasing 0.7% from the previous close of $563.69. The stock reached a day low of $561.52 and a day high of $568.88. Meta's market cap stands at US$1.44 trillion.