Meta Platforms Inc. posted stronger-than-expected third-quarter results on Wednesday fueled by its advertising revenue growth and its push to incorporate artificial intelligence.
But the Instagram and Facebook parent company warned that it expects a “significant acceleration” in infrastructure spending next year as it continues to pour money into developing AI.
Nearly all of Meta's revenue comes from advertising on its platforms, so a slight shortfall in user numbers also put a dent in an otherwise strong quarter. Meta said it's “family daily active people” — that is the number of users who signed into at least one of its apps (Facebook, Messenger, Instagram, WhatApp and Threads) in a day — was 3.29 billion on average for September. Analysts had expected 3.31 billion.
“The miss in its user metric, daily active people, is concerning, as Meta will need to squeeze more revenue out of its existing users as growth slows," said Emarketer analyst Jasmine Enberg. She added, though, that the company is in a good position to do so “as its AI-powered tools are boosting engagement by helping show users more of what they like and making its ads, particularly on Reels, more effective.”
For the three months ended on Sept. 30, the Menlo Park, California-based company earned $15.69 billion, or $6.03 per share, up 35% from $11.58 billion, or $4.39 per share, in the same period a year earlier.
Revenue rose 19% to $40.59 billion from $34.15 billion.
Analysts, on average, were expecting earnings of $5.22 per share on revenue of $40.21 billion, according to FactSet Research.
“We had a good quarter driven by AI progress across our apps and business,” CEO Mark Zuckerberg said in a statement. “We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”
For the current quarter, Meta is forecasting revenue of $45 billion to $48 billion. Analysts are expecting $46.18 billion.
“Meta’s solid quarter adds further evidence to the view that digital advertisers are choosing to spend their budget on the so-called market leaders, such as Facebook and Instagram, at the expense of the smaller social media networks, like Snap," said Investing.com analyst Jesse Cohen.
Cohen added that while AI is “clearly driving growth” at Meta, "investors appear to be disappointed over the company’s forward guidance and rising costs needed to develop AI features.”
Meta said it expects 2024 operating losses at its Reality Labs segment — which includes its virtual- and augmented-reality glasses — will “increase meaningfully” due to product development costs and other investments. Last Month, Meta teased a prototype for Orion, the holographic augmented reality glasses it's been working on for a decade. But Orion doesn't have a release date yet, in large part because it is currently so expensive to make. Zuckerberg called it a “glimpse of the future.”
Meta's shares slipped about 3% in after-market trading following the earnings report.
FILE - Mark Zuckerberg wears a pair of Orion AR glasses during the Meta Connect conference on Sept. 25, 2024, in Menlo Park, Calif. (AP Photo/Godofredo A. Vásquez, File)
BANGKOK (AP) — Sweeping new tariffs announced Wednesday by U.S. President Donald Trump provoked dismay, threats of countermeasures and calls for further negotiations to make trade rules fairer.
But responses were measured, highlighting a lack of appetite among key trading partners for an outright trade war with the world's biggest economy.
Trump said the import taxes, ranging from 10% to 49%, would do to U.S. trading partners what they have long done to the U.S. He maintains they will draw factories and jobs back to the United States.
“Taxpayers have been ripped off for more than 50 years,” he said. “But it is not going to happen anymore.”
Trump's announcement of a new 20% tariff on the European Union drew a sharp rebuke from European Commission President Ursula von der Leyen, who said it was a “major blow to the world economy.”
“The consequences will be dire for millions of people around the globe,” von der Leyen said. Groceries, transport and medicines will cost more, she said while visiting Uzbekistan, “And this is hurting, in particular, the most vulnerable citizens.”
Von der Leyen acknowledged that the world trading system has “serious deficiencies” and said the EU was ready to negotiate with the U.S. but also was prepared to respond with countermeasures.
British Prime Minister Kier Starmer said the U.K. government would react with “cool and calm heads.”
“Clearly, there will be an economic impact,” he said, telling business leaders in London that he hopes to get the tariffs lifted with a trade deal with Washington.
“Nobody wins in a trade war, that is not in our national interest,” Starmer said.
Japan, America's closest ally in Asia, plans to closely analyze the U.S. tariffs and their impact, Chief Cabinet Secretary Yoshimasa Hayashi said, while refraining from talk of retaliation. But he said the moves would have a big impact on relations with the U.S.
Italy’s conservative Premier Giorgia Meloni said the higher tariffs would benefit neither side.
“We will do everything we can to work towards an agreement with the United States, with the aim of avoiding a trade war that would inevitably weaken the West in favor of other global players,” Meloni said in a Facebook post.
Brazil, hit with a 10% tariff, said it was considering appealing to the World Trade Organization. Its congress unanimously passed a bill to allow retaliation for any tariffs on Brazilian goods.
Financial markets were jolted, with U.S. stock futures down by as much as 3% early Thursday and a 2.8% drop in Tokyo’s benchmark leading losses in Asia. Oil prices sank more than $2 a barrel.
“The magnitude of the rollout — both in scale and speed — wasn’t just aggressive; it was a full-throttle macro disruption,” Stephen Innes of SPI Asset Management said in a commentary.
While the longer-term ramifications could encompass a dismantling of supply chains built up over decades, a more immediate concern is the higher risk of recession.
“The (average) U.S. tariff rate on all imports is now around 22%, from 2.5% in 2024. That rate was last seen around 1910," Olu Sonola, Fitch Ratings’ head of U.S. Economic Research, said in a report.
"This is a game changer, not only for the U.S. economy but for the global economy. Many countries will likely end up in a recession. You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time,” Sonola said.
The burden falls heaviest on Asia-Pacific nations, with the highest tariffs for impoverished, financially precarious countries like Laos at a 48% tariff, Cambodia at 49% and Myanmar at 44%.
Asian countries that are among the biggest exporters to the U.S. pledged to act fast to support automakers and other businesses likely to be affected.
South Korean Prime Minister Han Duck-soo told officials to work with business groups to analyze the impact of the new 25% tariff to “minimize damage,” the trade ministry said.
China's commerce ministry said Beijing would “resolutely take countermeasures to safeguard its own rights and interests,” without saying exactly what it might do. With earlier rounds of tariffs China reacted by imposing higher duties on U.S. exports of farm products, while limiting exports of minerals used for high-tech industries such as electric vehicles.
“China urges the United States to immediately cancel its unilateral tariff measures and properly resolve differences with its trading partners through equal dialogue,” it said.
Mexican President Claudia Sheinbaum said she would wait to see how Trump’s announcement will affect Mexico, which like Canada was spared for goods already qualified under their free trade agreement with the United States, though previously announced 25% tariffs on auto imports took effect Thursday.
“It’s not a question of if you impose tariffs on me, I’m going to impose tariffs on you,” she said Wednesday morning. “Our interest is in strengthening the Mexican economy.”
Canada had imposed retaliatory tariffs in response to the 25% tariffs that Trump tied to the trafficking of fentanyl. The European Union, in response to the steel and aluminum tariffs, has imposed taxes on 26 billion euros’ worth ($28 billion) of U.S. goods, including bourbon, prompting Trump to threaten a 200% tariff on European alcohol.
Some countries took issue with the White House's calculations.
Australian Prime Minister Anthony Albanese said the tariffs were totally unwarranted, but Australia will not retaliate.
“President Trump referred to reciprocal tariffs. A reciprocal tariff would be zero, not 10%,” said Albanese. The U.S. and Australia have a free trade agreement and the U.S. has a $2-to-$1 trade surplus with Australia. “This is not the act of a friend.”
Trump said the United States bought $3 billion of Australian beef last year, but Australia would not accept U.S. beef imports. Albanese said the ban on raw U.S. beef was for biosecurity reasons.
A 29% tariff imposed on the tiny South Pacific outpost of Norfolk Island came as a shock. The Australian territory has a population of around 2,000 people and the economy revolves around tourism.
“To my knowledge, we do not export anything to the United States,” Norfolk Island Administrator George Plant, the Australian government’s representative on the island, told the AP Thursday. “We don’t charge tariffs on anything. I can’t think of any non-tariff barriers that would be in place either, so we’re scratching our heads here.”
“We don’t have a 20% tariff rate,” said New Zealand's Trade Minister Todd McClay. But he said New Zealand did not intend to retaliate. "That would put up prices on New Zealand consumers and it would be inflationary,” he said.
As Trump read the list of countries that would be targeted, he repeatedly said he didn’t blame them for the trade barriers they imposed to protect their own nations’ businesses. “But we’re doing the same thing right now,” he said.
“In the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral economic surrender,” Trump said.
Speaking from a business forum in India, Chilean President Gabriel Boric warned that such measures challenge “principles that govern international trade.”
Colombian President Gustavo Petro, who has clashed with Trump before, said via X that the tariffs marked a milestone: “Today the neoliberalism that proclaimed free-trade policies all over the world has died.”
Analysts say there’s little to be gained from an all-out trade war, for the United States or other countries.
“If Trump really imposes high tariffs, Europe will have to respond, but the paradox is that the EU would be better off doing nothing,” said Matteo Villa, a senior analyst at Italy’s Institute for International Political Studies.
“On the other hand, Trump seems to understand only the language of force, and this indicates the need for a strong and immediate response,” Villa said. “Probably the hope, in Brussels, is that the response will be strong enough to induce Trump to negotiate and, soon, to backtrack.”
AP journalists around the world contributed to this story.
People walk past an electronic stock board showing the day's early loss of Japan's Nikkei 225 index at a securities firm Thursday, April 3, 2025 in Tokyo.(AP Photo/Shuji Kajiyama)
U.S. President Donald Trump is seen on a screen as currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Thursday, April 3, 2025. (AP Photo/Ahn Young-joon)
Containers are stacked at the Port of Los Angeles Wednesday, April 2, 2025, in Los Angeles. (AP Photo/Damian Dovarganes)
Cranes and shipping containers are seen at a port in Pyeongtaek, South Korea, Wednesday, April 2, 2025. (AP Photo/Ahn Young-joon)
Employee Jon Vazquez-DeAnda cuts keys for a customer at employee-owned Devon Hardware, Wednesday, April 2, 2025, in Chicago. (AP Photo/Erin Hooley)
This photo shows vehicles bound for foreign countries at a logistics center in Kawasaki near Tokyo, Thursday, March 27, 2025. (Michi Ono/Kyodo News via AP)
President Donald Trump departs after signing an executive order at an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. (AP Photo/Evan Vucci)
President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House, Wednesday, April 2, 2025, in Washington. (AP Photo/Mark Schiefelbein)
President Donald Trump speaks during an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. (AP Photo/Evan Vucci)
President Donald Trump holds a signed executive order during an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. (AP Photo/Evan Vucci)
President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House, Wednesday, April 2, 2025, in Washington, as Commerce Secretary Howard Lutnick listens. (AP Photo/Mark Schiefelbein)
