Facebook & Instagram Parent Meta Sees Ad Market Volatility In Wake Of Mideast Conflict
Facebook and Instagram parent Meta blew past Wall Street expectations for the three months ended in September but said it’s seeing advertising volatility in the current fourth quarter corresponding with the Israel-Hamas war.
Snap, which also posted upbeat third quarter numbers yesterday, warned of the same. Both companies noted the difficulty in providing Wall Street with financial guidance given the situation.
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“Coming into Q4, we’ve been seeing continued strong advertising demand in key segments…but having said that we’re also seeing more volatility at the start of the quarter,” said CFO Suan Li on a conference call along with CEO Mark Zuckerberg after reporting Meta’s latest financials. The company widened its fourth quarter guidance range to reflect “the greater uncertainty and volatility in the landscape ahead.”
“While we don’t have material direct revenue exposure to Israel and the Middle East, we have observed softer ad spend in the beginning of the fourth quarter correlating with the start of the conflict,” she said.
“Our thoughts are with everyone who has been impacted by the horrific violence in the Middle East. We know that our services can be a vital tool for information and connection and expression at a moment like this. We are continuing to monitor the situation and are doing everything we can to keep people safe and to keep our services secure.”
The Facebook and Instagram parent blew past Wall Street estimates with revenue for the September quarter surging 23% to $34.15 billion on rebound in digital advertising. Profit more than doubled to $11.6 billion, more than double the $4.4 billion from the year earlier led in part by cost cuts, including massive layoffs. Headcount of 66,185 was down 24% year-over-year.
User growth continued and Meta said 3.14 billion people use one or more of the company’s “family of apps” daily, up 7% from a year ago. Facebook daily active users (DAUs) were 2.09 billion on average for September 2023, up 5% year-over-year.
The numbers came a day after Meta was sued by 41 states who claimed Instagram and Facebook uses strategies and algorithms to capture the attention of children and teenagers making them unsafe for the mental health of minors who experience “depression, anxiety, insomnia, interference with education and daily life, and many other negative outcomes.” No one on the call asked about the suit, which claims that Meta declined significant guardrails like “alternative feasible age verification.”
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