Meta’s ad business is still carrying the company, even as spending on artificial intelligence climbs at a steep rate. The firm’s third-quarter report shows revenue rising 26% year over year to $64.6 billion.
Daily active people across its apps grew by 40 million to 3.64 billion. India is now Meta’s largest single user market, and Threads has reportedly overtaken X in monthly active users.
Ad Prices Offset Slower Impressions
Ad impressions rose 10%, a slight dip from recent quarters, despite new placements on Threads. Meta offset the slowdown by lifting ad prices 14%. That may frustrate marketers, but Meta argues its AI-powered targeting makes each ad more valuable.
Expenses, however, jumped 68% year over year, driven mainly by capital expenditures on AI infrastructure. Reality Labs, which covers AI glasses and VR headsets, brought in only slightly more than in the previous quarter. Backlash over misuse of the glasses has reportedly slowed sales.
Muse Faces Trust and Retention Questions
That puts pressure on Muse, Meta’s AI agent, which the company hopes will eventually earn a share of sales made through the app. Recent reports of data exposure, including an incident where the bot shared a user’s home address, have raised security concerns.
Morgan Stanley data also suggests Muse retention drops sharply two weeks after download, though similar declines have been seen with ChatGPT, Claude and Grok.
Meta’s headcount fell 15% year over year to 66,775, which likely reflects its shift toward AI tools. For now, strong ad revenue gives Meta a buffer, but investors will be watching whether its AI bets can produce meaningful returns.