Meta Platforms, Inc.

Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the META third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, again, press star one. We ask that you limit yourself to one question. This call will be recorded. Thank you very much. Kenneth Durrell, Meta's Director of Investor Relations. You may begin.

Thank you. Good afternoon and welcome to Meta Platform's third quarter 2024 earnings conference call. Joining me today to discuss our results are Mark Zuckerberg, CEO, and Susan Lee, CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's earnings press release and in our quarterly report on Form 10-Q filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of gap to non-gap measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our website at investor.fb.com. And now I'd like to turn the call over to Mark. All right. Thanks, Ken.

This was a good quarter with strong product and business momentum and with parts of our long-term vision around AI and the future of computing coming into sharper focus. We estimate that there are now more than 3.2 billion people using at least one of our apps each day, and we're seeing rapid adoption of Meta AI and Lama, which is quickly becoming a standard across the industry. So let's start with some highlights from the apps. For WhatsApp, the US remains one of our fastest growing countries, and we just passed a milestone of 2 billion calls made globally every day. On Facebook, we continue to see positive trends with young adults, especially in the US. On Instagram, global growth remains strong. We also launched teen accounts this quarter, which add built-in protections that limit who teens are messaging and what content they can see. On threads, the community now has almost 275 million monthly actives. It's been growing more than a million signups per day. Engagement is growing too. So we continue to be on track towards this becoming our next major social app. We are making a lot of progress with our AI efforts, too. And we're seeing AI have a positive impact on nearly all aspects of our work, from our core business engagement and monetization to our long-term roadmaps for new services and computing platforms. And I think that this partially comes from having a vision and roadmap that is aligned with the direction that technology is heading. But even more importantly, from our teams doing some really excellent work on execution on so many fronts. MetaAI now has more than 500 million monthly actives. Improvements to our AI-driven feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year alone. More than a million advertisers used our GenAI tools to create more than 15 million ads in the last month. And we estimate that businesses using image generation are seeing a 7% increase in conversions. And we believe that there's a lot more upside here. We are also seeing great momentum with Llama. Llama token usage has grown exponentially this year. And the more widely that Llama gets adopted and becomes the industry standard, the more that the improvements to its quality and efficiency will flow back to all of our products. This quarter, we released LAMA 3.2, including the leading small models that run on device and open source multimodal models. We are working with enterprises to make it easier to use. And now we're also working with the public sector to adopt LAMA across the U.S. government. The LAMA 3 models have been something of an inflection point in the industry. But I'm even more excited about Llama 4, which is now well into its development. We're training the Llama 4 models on a cluster that is bigger than 100,000 H100s, or bigger than anything that I've seen reported for what others are doing. I expect that the smaller Llama 4 models will be ready first, and they'll be ready We expect sometime early next year, and I think that they're going to be a big deal on several fronts, new modalities, capabilities, stronger reasoning, and much faster. It seems pretty clear to me that open source will be the most cost-effective, customizable, trustworthy, performant, and easiest-to-use option that is available to developers, and I am proud that Lama is leading the way on this. All right, now, it's the time of the year at Meta when we plan our budget for the next year, and that's still in progress, but I wanted to share a few things that have stood out to me as we've gone through this process so far. First, it's clear that there are a lot of new opportunities to use new AI advances to accelerate our core business that should have strong ROI over the next few years, so I think we should invest more there. And second, our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too. We haven't decided on a final budget yet, but those are some of the directional trends that I'm seeing. Now, moving on, this quarter, we also had several milestones around Reality Labs and the integration of AI and wearables. Ray-Ban Meta glasses are the prime example here. They're great-looking glasses that let you take photos and videos, listen to music and take calls. But what makes them really special is the Meta AI integration. With our new updates, it'll be able to not only answer your questions throughout the day, but also help you remember things, give you suggestions as you're doing things using real-time multimodal AI, and even translate other languages right in your ear for you. I continue to think that glasses are the ideal form factor for AI because you can let your AI see what you see, hear what you hear, and talk to you. Demand for the glasses continues to be very strong. The new clear edition that we released at Connect sold out almost immediately and has been trading online for over $1,000. We've deepened our partnership with Essilor Luxottica to build future generations of smart eyewear that deliver both cutting-edge technology and style. At Connect, we also showed Orion, our first full holographic AR glasses. We've been working on this one for about a decade and it gives you a sense of where this is all going. We're not too far off from being able to deliver great looking glasses that let you seamlessly blend the physical and digital worlds so you can feel present with anyone no matter where they are. And we're starting to see the next computing platform come together and it's pretty exciting. All right. We also released our newest mixed reality headset, Quest 3S. It brings the best capabilities of Quest 3, high-quality color pass-through, a new chipset, and more at the much more accessible price point of $300. Reviews are great so far, and I'm looking forward to seeing how well it does this holiday season as more people get their hands on it. So overall, this has been a good quarter. I'm pretty amped about all the work that we're doing right now. This may be the most dynamic moment that I've seen in our industry. And I am focused on making sure that we build some awesome things and make the most of the opportunities ahead. And if we do this well, then the potential for Meta and everyone building with us will be massive. As always, I'm grateful for everyone who is on this journey with us, our teams, our partners, and our investors. And now, here's Susan.