Shares of the Facebook parent company fell nearly 3% in after-hours trading immediately following the release of third-quarter results.

During the company’s conference call with investors, Meta executives noted the strength of new efforts like generative AI and Threads, as well as solid advertising sales growth across all regions. Total revenue for the quarter rose 19% year-over-year to $40.59 billion, beating analysts’ expectations. Net income rose 35% to $15.68 billion and earnings per share were $6.03, also above expectations.

The total number of people using one of Meta’s apps daily, including Facebook, Instagram and WhatsApp, rose 5% to 3.29 billion. Meta AI, the AI ​​chatbot introduced in various Meta products, now has 500 million monthly users, the company said.

“We’re trying to make sure we get the right people working on it and putting the right amount of investment into what we see as a very, very big opportunity,” CEO Mark Zuckerberg said of AI during the call. He said the next step in the company’s AI strategy is to leverage the LLM models it developed for use in business tools, promising new details early next year.

Zuckerberg has emphasized the company’s focus on cost discipline and described ongoing efforts at “efficiency” that have led to frequent layoffs in recent years. The 13% growth in operating expenses during the quarter was slower than the company’s revenue growth and helped push Meta’s operating profit margin to 43%, compared to the 40% level a year ago.

Still, Meta reported that its total workforce increased 9% year over year to more than 72,000 employees. Metas Reality Labs, the organization within Meta responsible for VR and AI work, lost a whopping $4.42 billion on revenue of $270 million in the third quarter, and Meta warned that it would expects the department’s “operating losses” to “increase significantly.”

The company’s AI efforts have required massive investments that show no signs of slowing down. Meta raised the low end of its planned investment range for the year, forecasting a cap of $38 billion to $40 billion, up from the previously forecast range of $37 billion to $40 billion. And the company warned that it continues to expect a “significant increase in capital spending in 2025.”

CFO Susan Li said fourth-quarter revenue is expected to be between $45 billion and $48 billion, representing year-over-year growth of 12% to 20%.

Meta shares have seen a boost ahead of Wednesday’s earnings report: Meta shares have risen 22% since August, while the Nasdaq has posted an 8% gain over the same period.