What happened

Shares of Meta Platforms (META 0.16%) were moving higher this week after the company posted better-than-expected results in its third-quarter earnings report and also seemed to benefit from a strong report at rival Alphabet. 

The stock was up 8.3% for the week as of Thursday at 11:55 a.m. ET.

So what

After several quarters of weak results, Meta posted solid acceleration in revenue growth in the second quarter with the top line up 11% to $32 billion, beating analyst estimates at $31.1 billion.

Advertising revenue rose 12% to $31.5 billion as the company saw a 34% increase in ad impressions but a 16% decline in price per ad. Impression growth was driven by the Asia-Pacific and the "rest of world" segment, which monetizes at a lower rate than North America and Europe.

Meanwhile, the company is seeing increased monetization of Reels, its TikTok-like short-video product with three-quarters of advertisers now using Reels ads.

It also continued to grow its audience with monthly active users across all of its apps up 6% to 3.88 billion, and monthly active users on Facebook up 3% to $3.03 billion. 

On the bottom line, the company's recent layoffs helped it control costs, and operating income rose 12% to $9.4 billion, which includes $2.6 billion in legal and restructuring charges. 

The company's tax rate was down slightly, and generally accepted accounting principles (GAAP) earnings per share increased 21% from $2.46 to $2.98, ahead of estimates at $2.89.

Meta continued to experience sharp losses in its Reality Labs division, which is focused on the metaverse, as its operating loss there expanded from $2.8 billion to $3.7 billion and revenue from reality labs fell from $452 million to $276 million.

CEO Mark Zuckerberg said, "We continue to see strong engagement across our apps and we have the most exciting roadmap I've seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall."

Now what

Meta shares have surged this year. Investors have cheered its cost-cutting efforts and reassessed the stock as its Reels product gains traction and as the challenges from Apple's ad-targeting restrictions fade.

Meta has already demonstrated it has significant competitive advantages and wide operating margins, and, with the exception of its expensive metaverse experiments, the company seems to be rediscovering its focus on balanced growth.

The stock isn't the bargain it once was, but its third-quarter revenue guidance of $32 billion to $34.5 billion, representing 20% growth at the midpoint, was much better than the consensus at $31.18 billion,

Based on that forecast, Meta could easily add gains from here.