In the earnings call,
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CFO Susan Li said they expect macro volatility in 2024.
“You asked about what are some of the significant puts and takes, and I’d maybe point back to what I said earlier about the Q4 outlook just to highlight what a volatile macro environment we believe we’re in. I think that will obviously have a big impact on the advertising market next year, and it’s something we’ll be keeping a very close eye on. But ultimately, we’re very subject to volatility in the macro landscape,” she answered.
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Li said ad revenue acceleration in the quarter was mainly driven by ad spend by Chinese advertisers.
“Within ad revenue, the online commerce vertical was the largest contributor to year-over-year growth, followed by CPG and gaming. Online commerce and gaming benefited from strong spend among advertisers in China reaching customers in other markets.”
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Li said they widened their Q4 revenue guidance to accomodate for some volatility they are seeing at the start of the quarter due to uncertainty caused by tensions in the Middle East.
“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, which is captured in our Q4 revenue outlook,” She said.
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CEO Mark Zuckerberg said Reels has driven “more than 40% increase in time spent on Instagram since launch”, now net neutral to overall company ad revenue, and is anticipated to be a “modest tailwind to revenue in 2024”.
Preliminary earnings call notes (Mindmap)