In the third quarter, Meta, the parent company of Facebook, saw a significant rise in profits due to an increase in advertising earnings.

Meta, the parent company of Facebook, reported strong earnings in the third quarter due to a rise in advertising earnings and reduced costs following a large-scale reduction in workforce.

The results from Alphabet’s report on Tuesday exceeded expectations, indicating a recovery in both earnings and revenue growth. This suggests that the online advertising market is improving after a decline in recent years.

Meta, based in Menlo Park, California, said that it earned $11.58 billion, or $4.39 per share, in the July-September quarter. That’s up from $4.4 billion, or $1.64 per share, a year earlier. Revenue rose 23% to $34.15 billion from $27.71 billion.

According to a survey conducted by FactSet, analysts had predicted that the earnings per share would be $3.64 and the revenue would be $33.58 billion, on average.

According to Insider Intelligence’s analyst Jeremy Goldman, Meta remains consistent in meeting expectations despite changes in the broader tech market. Its continuous growth, strong user engagement, and effective cost management strategies have allowed Meta to not only navigate through uncertain times, but also pave the way for new opportunities for growth.

On Tuesday, Meta was sued by 41 states and the District of Columbia for negatively affecting the mental health of young people. They reported that as of Sept. 30, the number of active users on Facebook was 3.05 billion, which is a 3% increase from the previous year.

“This groundbreaking legal case has the potential to bring about a major change in the way social media platforms handle product features and user engagement,” stated Goldman. “Despite the uncertainty faced by tech stocks, Meta’s continued success solidifies its position as a leader in the digital world.”

Meta’s “family of apps,” which includes Facebook, Instagram, WhatsApp, and Messenger, had a total of 3.96 billion monthly active users at the end of the quarter, representing a 7% increase from the previous year. Meta does not provide separate user data for its other apps on a quarterly basis.

During a conference call with analysts, CEO Mark Zuckerberg announced that Meta’s Threads app, resembling Twitter, has 100 million active users per month since its release in July.

“I have long believed that there should be a public conversation app with a billion users that promotes positivity,” he stated. He also mentioned that if Threads continues to grow for a few more years, it could become that app.

The overall costs and expenses totaled $20.4 billion, a 7% decrease compared to the previous year. Meta reported a current employee count of 66,185 as of September 30th, which is a 24% decline from the previous year.

Meta predicts that its revenue for this quarter will be between $36.5 billion and $40 billion, while analysts anticipate a total of $38.84 billion.

After the report was released, Meta Platforms Inc. saw a decrease of approximately 3% in their stock value during after-hours trading. The stock had previously closed at $299.53, a decrease of $13.02 or 4.2%.