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Comment by samspenc | Hacker News Reader

Revenue up 23%, from $27.7B to $34.1B YoY.

Net income is up a whopping 143%, from $4.4B to $11.6B - basically went from a 15% to 34% profit margin (and in line with profit margin numbers from 2021 and prior)

No wonder stock is up 4% after earnings.

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The death of Meta was greatly exaggerated. Wish I had gone in when the stock was taking a beating. They are now up ~250% YoY.

I recall seeing all those 'Meta is dead' youtube videos last year. Who cares if you're wrong as long as you get that ad $, right. Even if the Metaverse is a dud and a money pit, the rest of the company is firing on all cylinders.

They're spending $10B/yr on servers alone without any product or plan for their use. It's a waste of money if there isn't a roadmap, which there still isn't.

EDIT: I work for Meta as an IC6.

You're also disparaging your employer on HN and disclosing things they would likely consider company confidential material. Not a great look, and some risk of becoming "Ex-Meta" if you keep doing this sort of thing and they identify you.

They can say whatever they like about their employer. I can’t even begin to imagine the mentality of admonishing a stranger on the internet because you think they said something that Facebook doesn’t like. It’s fine I promise.

Agree to disagree honestly. If you don't like your employer to the point you're going to trash talk on HN, find a new job, do something else, and certainly don't disclose information like $'s being spent on infrastructure with "no plan to use" (this person is inevitably covered by an NDA, and that is very likely considered company confidential information by Meta).

Always best to assume that even if you post attempting to be anonymous and not filling out 'About Me' that one of your 100's of comments on an internet forum may identify you accidentally or intentionally, and that all your comment history may then trace to you.

You can't imagine why it's wrong for him to sign an agreement undertaking to uphold their good name and not disclose confidential info, only to then go back on his word on both points here?

To make it worse, $META is a public company. Confidential info is even more sensitive for a public company.

Whether you like Meta or not plays no part.

ATT and the metaverse stuff was a tough one two punch for them and then investors got spooked about mark being completely unaccountable. But they always had a strong business, mark just had to remind investors that he still cares about profitability which he did with the layoffs.

With Apple joining in on the space, Valve being there for ages, and Microsoft's being reborn from the dead [1]... one wonders what's this whole thing against VR/AR applications.

[1] https://www.theverge.com/2023/9/13/23871859/us-army-microsof...

I don't think people are against VR/AR, it's just that Horizon was so underwhelming given the hype.

Ideas like the metaverse tap into a lot of established sci-fi, pop-culture concepts which are generally very cool. I genuinely think that people really do want VR worlds to succeed - they do want their own virtual homes, customisable avatars, places to meet and game online in the metaverse, etc.

But instead they got some awkward, low-poly bobbleheads with a side helping of unnecessary crypto crap...

I’d have to disagree given all the adults who have bad opinions of AR / VR, yet ironically have yet to try anything modern; with their only experience being Google Cardboard from a decade ago. It’s easy to find these posts on HN and elsewhere online.

Apple is dipping their toe in and expecting to move 200k units on 2024. VR/AR has legs but still ultimately smacks of being a toy.

Quest3 is GOOD though and I feel people are sleeping on it. It feels like a properly mature product. It’s the rest of the market that looks a little questionable to me.

Not to sound too much like a VC Bro but I also feel the more VR/AR goggles they can push the more appealing the platform will become for developers and as a social platform. They’re just not shipping quite enough units. It doesn’t feel like meta is doing anything wrong, it’s just going to take time to build up enough users to attract developers and more users to attract more users and developers.

This got me interested in what did they spend between the $34B revenue and $11.6B Net income.

Cost of revenue 6,210 Research and development 9,241 Marketing and sales 2,877 General and administrative. 2,070

$9B in Research and Development. About $3B of that still belongs to Reality Lab.

So even without VR, Facebook still seems to spend relatively a lot of money for their revenue generation. I am surprised by this as I thought their net margin would be quite a bit higher.

Their profit margins were always around 30% or so, except late-2021 through mid-2022 when it fell dramatically due to higher expenses and (unexpected) flat revenue.

As for $9B in research and development - they have 66K employees now. Say 30,000 of them are in engineering, costing the company $300K on average (salary + bonus + benefits + other expenses), that's $9B right there in research.

> No wonder stock is up 4% after earnings.

This was short lived.

Right; down nearly 8% on the day.

> Net income is up a whopping 143%, from $4.4B to $11.6B

Zuck finally got over his bad VR trip. He was spending current FCF on his bad adventure and it was only a matter of time before someone got him to pull back. They can still do a lot in the space without dropping billions/quarter.

Their VR division is still loosing billions and they guided increased loses as they invest more.

> losing billions

Isn't the word "spending" in this case?

> Zuck finally got over his bad VR trip

Whether the trip was bad or not is up to debate, but what makes you think Zuckerberg is quitting on AR/VR? His recent interviews suggest anything but that.

What do people want Zuckerberg to do? Not make bets about future tech?

Zuck has been throwing tens of billions of dollars at VR and it still hasn't gone mainstream.

At what point do you decide that the market just isn't there for the product - or, at least, the market will forever be restricted to fairly serious gamers and sundry small other specialized business applications (eg architectural visualizations)?

It's significantly closer to mainstream since the quest 2 than before. I never saw a VR headset on retail shelves before, and I never heard kids talking about it at all. Now both of those things happen to me occasionally.

Perhaps I’m getting old, but back in the day it seemed like that when a consumer product was going to be a hit, “everybody” would want it watts and all because the good parts were so compelling people would put up with the rough edges.

I mean, I remember when Wolf3D was first released. Some aspects of it - the low-resolution bitmapped NPCs, for instance - were clearly stopgaps. But the over experience was so amazing you were prepared to ignore that.

With virtual reality, the argument seems to be “if we just polish it a bit more it’ll be a compelling consumer product”. How many more years of polishing is it going to take?

With VR I feel like it’s a bit different since fidelity is the product - unless the experience is near real life levels of realistic, there’s not much point. We’re probably a couple of generations away from that, VR will seem a disappointment until one day it’s not.

We play video games that aren't anywhere near real life levels of realistic. IMO the main issue with VR is it makes you feel nauseous

Bad/unoptimized VR makes people feel nauseous. I've never heard of anyone getting nauseous from a polished and performant VR experience like Moss or Beat Saber.

In beat saber you stand in one spot and objects come towards you in a narrow field of vision.

In a lot of VR games you move your character around while you do not and that is what causes a lot of nausea. If games have to be like beat saber for VR/AR to be successful that’s damning.

I think the Quest2 with its cellphone graphics utterly crushing PCvr put that argument out to pasture. 20 years from now standalone VR is still not going to be near real life levels of realistic.

... wolfenstein 3d sold less than a million copies...

I feel the hardware is already here, it’s the lack of users and software at this point. I struggle to think of what massive hardware improvement could be needed.

I still struggle to see a future where VR/AR headsets don’t have 50m users by the end of the decade. I wouldn’t be shocked to see the Quest3 be a sleeper success once the wave of interest generated by Quest2 materializes in the form of new software.

If the market _does_ work and Zuck gets to own it like Apple and Google own mobile, then it's worth the gamble. You own a "pane of glass" and control and tax all of the commerce through it (unless regulators finally wake up).

The whole endeavor also comes with a great failure mode: Zuck also gets to own lots of the spatial computing, rendering, and multimedia future. We're getting glimpses of what games and films will look like in a decade or two, and it's nothing like what we're used to experiencing today.

Not to mention the industrial applications of spatial computing.

I think he's a genius for investing in this, even if AR/VR/XR fall completely flat.

The military just gave the go ahead to Microsoft to continue developing their HoloLens. I would say it's a fairly big player on this.

The military has been throwing money at VR and AR for decades, and will continue to do so because fighter pilots need HUDs, but most of us don't pilot F-35 fighter jets for a living.

This. The question of whether VR/AR finds profitable markets is a separate one from whether it becomes a mass consumer phenomenon on the scale of social media.

...the Internet was also a military project, turns out it also has a little appeal for the civilians.

I was arguing against the idea of only being used in "sundry small other specialized business applications".

So much of computing is still about being chained to a chair and table, using an ill designed keyboard layout, with a pointing device that only really kinda works in 2D. This has had imense repercussions on how we use computers today, it has alienated outsiders for years.

We're at a point where people prefer to search for things rather than using the UI. At some point, certainly, we gotta start questioning how ** stale we are with user interfaces.

I'm sorry for the rant, long day!

People are free to sell their stock and invest in a different future tech.

Uber lost 38B so far and still going on with their product: https://uberlosses.com/

Uber is the public company that has lost the most money in the past 5 yrs (in the US).

Second most is Carnival Cruise Lines.

Nvidia has thrown billions at AI and it hasn’t gone mainstream … people around 2017

What did they spend billions on that didn’t align with other workloads? I think they spent billions on enabling GPUs to become general purpose chips. AI was the workload that came along. Will be interesting to see what the VR workload is that we don’t yet know that blows the roof off demand

Toyota has thrown billions at fuel cell cars and it hasn’t gone mainstream - people around 2017.

Not all bets that look crazy pay off. Sometimes they’re just bad.

And isn't that okay.. Toyota needs to take risks if it wants to be around in 100 years

In this particular case, yes. Battery EVs will clearly win over fuel cell

> What do people want Zuckerberg to do? Not make bets about future tech?

Future tech like adding legs to ugly avatars?

At some point it'll work and you'll be forced to use it.

Bring too early is a problem for sure but you can't time everything.

“Forced to use it” is a bold prediction. We’re currently not forced to use anything Meta makes. I don’t see that changing anytime soon.

Are you forced to use zoom?

I know plenty of people who were staunchly against video calls as an alternative to meetings.

Don’t even have an account on zoom. Never used it in my life.

VR won't happen until we have direct-to-visual cortex connectivity, just as smartphones weren't going to happen before the advent of capacitive multitouch input. It's pointless to try to make something happen before its time. No amount of money or manpower will ever be enough.

The smart money waits by the river until the necessary enabling technology comes floating by, just as Jobs did.

Creating EM waves to activate the rods and cones in people's retina already works very well for VR.

And I'm sure that after somebody spends another billion dollars or two on goofy-ass goggles, the rest of the world will catch on. This time for sure!

Reality labs lost more this quarter than last years.

R&D is not loss. It’s spending or investment. Selling it as loss is investor activism which tends to be motivated by short term thinking and the preference to squeeze whatever you can as a profit since you can always exit your position at any time.

up 4% after a 200% gain over past year...crazy. a year ago ppl were writing the obituaries for Meta, with viral videos on YouTube about Meta's imminent demise getting millions of views...how poorly those have aged. I have never seen as big of a turnround as this...a half a trillion dollar company with as much upside as penny stocks but much smoother, less risk.

> Went from a 15% to 34% profit margin

> Headcount was 66,185 as of September 30, 2023, a decrease of 24% year-over-year.

How to increase profit 101.

Exactly. But but but we were told that Meta was collapsing 1 year ago for sure due to their massive spending in VR and AR with the stock falling to less than $90.

Its almost as if that full emotion took over the markets over and switched on to complete fear mode and was a complete nothing to see here in the end showing that the so-called death of Meta Platforms Inc was over exaggerated by the media.

Another earnings beat and it is business as usual, just like before. [0]

[0] https://news.ycombinator.com/item?id=32256465

Yes and I remember it keeps being repeated since, dare I say the birth of HN? And every few years someone who were happy and bother to summarise how great Facebook is still doing during their quarterly or yearly results, just to irritate the vast majority of HN who wishes to see its death.

It was down 4% earlier today from yesterday. Just back to where it was.

Fun fact, down 4% and then up 4% puts you slightly below where you were, since 4% of 100 is larger than 4% of 96.

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