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Meta. / EPA, Yonhap

Meta, the parent company of Facebook and Instagram, reported third-quarter results that exceeded market expectations, driven by growth in its advertising business. Following a 26% year-on-year increase in revenue, the company expects growth to continue in the fourth quarter and plans to maintain large-scale investments in artificial intelligence (AI).

According to Reuters, Meta announced on Oct. 21 (local time) that its third-quarter revenue rose 26% from a year earlier to $64.6 billion (approximately 85.7 trillion won). The figure exceeded the market forecast of $63.37 billion compiled by the London Stock Exchange Group (LSEG).

The company's core advertising business drove the strong results. Advertising revenue increased 26% year-on-year to $63.061 billion. The number of ad impressions rose 10%, while the average price per ad increased 14%.

Earnings per share (EPS) came to $3.83, below the market forecast of $5.75. However, this was largely due to a one-time charge of $9.89 billion related to a settlement reached in August with U.S. state governments over lawsuits concerning the protection of teenagers. Meta explained that excluding this charge, EPS would have reached $7.40.

The company's earnings outlook also exceeded market expectations. Meta forecast fourth-quarter revenue of $73 billion to $76 billion. The midpoint of $74.5 billion was higher than Wall Street's forecast of $73.73 billion.

Building on its strong performance, Meta plans to continue investing in AI. Capital expenditures in the third quarter reached $34.91 billion, including spending on expanding infrastructure such as data centers and securing AI chips. As a result, free cash flow (FCF) swung from a surplus of $10.63 billion in the same period last year to a deficit of $2.12 billion this year.

Nevertheless, Meta raised the lower end of its full-year capital expenditure forecast, from a previous range of $130 billion to $145 billion to $135 billion to $145 billion. Chief Executive Officer (CEO) Mark Zuckerberg said the company's AI investments were delivering results and expressed his intention to continue investing.

Meanwhile, Elon Musk's space company SpaceX, which announced its earnings on Oct. 20, also significantly exceeded market expectations, reporting third-quarter revenue of $14.58 billion, up 161% year-on-year. In particular, revenue from its Super Intelligence (SI) division, its AI business, surged 830% from a year earlier to $7.56 billion, overtaking the Connectivity division, which includes Starlink, to become the company's largest source of revenue.

                                                                                                            Nam Mi-kyung