Meta Q3 revenue tops estimates; Zuckerberg says Muse is costly but will be monetized

Meta Platforms reported third-quarter results on Wednesday. The Seattle Times reported net income of $9.86 billion, or $3.83 per share, for July to September, up from $2.71 billion, or $1.05 per share, a year earlier. Revenue grew 26% to $64.60 billion, from $51.24 billion in the prior-year quarter, and was above the $63.34 billion expected by Wall Street analysts. [ 2 ]

In August, Meta reached an $18 billion settlement with 48 US states over the effects of social media on teen mental health. Excluding a $9.89 billion charge related to the agreement, Meta said third-quarter earnings would have been $7.40 per share. The year-ago quarter included a one-time tax charge of nearly $16 billion. [ 2 ]

On the earnings call, Zuckerberg said more than 10 million people in the US and Canada have set up accounts for Muse, the personal AI agent the company launched. Engadget quoted him saying that Muse has clear product market fit, that Meta is entering a more operational phase focused on scaling it, and that it expects to grow Muse to serve billions of people. Business Insider said Muse was not launched globally due in part to the amount of compute it requires. [ 1 , 2 , 3 ]

Zuckerberg said Muse is unprofitable because it is very compute intensive to run, according to Business Insider. Meta expects to start turning that around next year by improving Muse's efficiency. "If compute efficiency continues improving quickly for another few years, which we think is highly likely, then Muse will be highly profitable over multiple years," he said. [ 1 ]

On monetization, Engadget reported that Meta plans to build commerce tools to charge businesses fees for transactions facilitated by the agent, and to offer AI subscriptions for people and business owners who use it more heavily. Zuckerberg said shopping is currently the most common use, with people spending an average of $200 per purchase. He said average revenue per American user of Meta's existing apps is several hundred dollars annually and that Meta expects Muse to reach a higher level over time. [ 3 ]

Zuckerberg also addressed Reality Labs, which makes products such as Meta Ray-Bans and virtual reality glasses. Business Insider reported that the division will narrow its losses to about $15 billion in 2027, from the $18 to $19 billion Meta expects to lose this year, and should start trending toward profitability next year as Meta's AI systems make it more useful. [ 1 ]

Meta said daily active users across its family of apps grew 3% from a year earlier to an average of 3.64 billion. It had 66,775 employees as of Sept. 30, down 15% from a year earlier. For the current quarter, Meta forecast revenue of $73 billion to $76 billion, whose midpoint is above the $73.65 billion analysts expect. [ 2 ]