Dave Wehner
Chief Financial Officer at Meta Platforms
Thanks, Sheryl, and good afternoon everyone.
We delivered solid results in the third quarter in the face of a challenging mobile platform landscape and an evolving macroeconomic environment. Let's begin with our community metrics. Our global community continued to grow, even as we lapped elevated user growth in the third quarter of last year related to the pandemic. We estimate that approximately 2.8 billion people used at least one of our services on a daily business basis in September and that approximately 3.6 billion people used at least one on a monthly basis. Facebook daily active users reached 1.93 billion, up 6% or 110 million compared to last year. DAUs represented approximately 66% of the 2.91 billion monthly active users in September. MAUs grew by 170 million or 6% compared to last year.
Turning to the financials. All comparisons are on a year-over-year basis unless otherwise noted. Q3 total revenue was $29 billion, up 35% or 34% on a constant-currency basis. We benefited from a currency tailwind and had foreign exchange rates remained constant with Q3 of last year, total revenue would have been $259 million lower. Q3 ad revenue was $28.3 billion, up 33% or 32% on a constant currency basis. On a user geography basis, year-over-year ad revenue growth was strongest in Rest of World at 50%. Europe, North America and Asia-Pacific grew 35%, 31% and 28%, respectively. Europe, Asia-Pacific and Rest of World benefited from currency tailwinds, though to a lesser degree than in the prior quarter. In Q3, the total number of ad impressions served across our services increased 9% and the average price per ad increased 22%.
Impression growth was driven primarily by developing markets, especially in Asia-Pacific. Pricing growth benefited from advertiser demand and lapping COVID-related pricing weakness during the third quarter of last year. Though as Sheryl noted, growth was hindered by three primary headwinds. First, advertising spend was negatively impacted by performance and measurement headwinds related to Apple's ATT changes. Second, we are seeing some macro headwinds as growth in online commerce has moderated from the elevated levels experienced earlier in the pandemic and businesses faced supply chain disruptions. Third, COVID resurgences in Southeast Asia have led to additional lockdowns and a curtailment of economic activity. Other revenue was $734 million, up 195% driven by strong Quest 2 sales.
Turning now to expenses. Q3 total expenses were $18.6 billion, up 38% compared to last year. In terms of the specific line items, cost of revenue increased 38%, driven mostly by consumer hardware cost, core infrastructure investments and payments to partners. R&D increased 33%, driven primarily by hiring to support our core products and consumer hardware efforts. Marketing and sales increased 32%, mainly driven by marketing spend and hiring. Lastly, G&A expenses increased 65%, driven primarily by higher legal-related costs and employee-related costs. We added over 4,700 net new hires in Q3, primarily in technical functions. We ended the quarter with over 68,100 full-time employees, up 28% -- up 20% compared to last year.
Third quarter operating income was $10.4 billion, representing a 36% operating margin. Our tax rate was 13%. Net income was $9.2 billion or $3.22 per share. Capital expenditures, including finance leases, were $4.5 billion, driven by investments in data centers, servers, network infrastructure and office facilities. Free cash flow is $9.5 billion and we ended the quarter with $58.1 billion in cash and marketable securities. We repurchased $14.4 billion of our Class A common stock in the third quarter and had $8 billion remaining on our prior authorization as of September 30. Today, we announced a $50 billion increase in our stock repurchase authorization.
Turning now to the outlook. Starting with our results for the fourth quarter of 2021, we plan to breakout Facebook Reality Labs or FRL as a separate reporting segment. As we have discussed, we are dedicating significant resources towards our augmented and virtual reality products and services, which are an important part of our work to develop the next generation of online social experiences. The new segment disclosures will provide additional information on the performance of FRL and the investments we are making.
Under this reporting structure, we will provide revenue and operating profit for two segments. The first segment, Family of Apps, will include Facebook, Instagram, Messenger, WhatsApp and other services. The second segment, Facebook Reality Labs, will include augmented and virtual reality-related hardware, software and content. As Mark noted, we expect our investment in FRL to reduce our overall operating profit in 2021 by approximately $10 billion. We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years. Ahead of the fourth quarter earnings call, we will share additional details about the reporting format of our segmented financials.
Turning now to the revenue outlook. We expect fourth quarter 2021 total revenue to be in a range of $31.5 billion to $34 billion. Our outlook reflects the significant uncertainty we faced in the fourth quarter in light of continued headwinds from Apple's iOS 14 changes and macroeconomic and COVID-related factors. In addition, we expect non-ads revenue to be down year-over-year in the fourth quarter as we lap the strong launch of Quest 2 during last year's holiday shopping season. As previously noted, we also continue to monitor developments regarding the viability of transatlantic data transfers and their potential impact on our European operations.
Turning now to the expense outlook. We expect 2021 total expenses to be in the range of $70 billion to $71 billion, updated from our prior outlook of $70 billion to $73 billion. We anticipate our full-year 2022 total expenses will be in the range of $91 billion $97 billion, driven by investments in technical and product talent and infrastructure-related costs. We expect 2021 capital expenditures to be approximately $19 billion, updated from our prior estimates of $19 billion to $21 billion. For 2022, we expect capital expenditures to be in the range of $29 billion to $34 billion, driven by our investments in data centers, servers, network infrastructure, and office facilities. A large factor driving the increase in capex spend is an investment in our AI and machine learning capabilities which we expect to benefit our efforts in ranking and recommendations for experiences across our products including in-feed and video as well as improving ads performance and relevance. We expect our Q4 2021 tax rate to be in the high-teen. Absent any changes to U.S. tax law, we would expect our full year tax rate in 2022 to be similar to the full year 2021 rate. Please note that our outlook for 2022 expenses, capital expenditures and tax rate are preliminary estimates as we have not yet finalized our 2022 budget.
In closing, this was another solid quarter for our business, despite facing some headwinds. And we believe the investments we're making in our current services as well as new products and experiences will enable us to remain the best place for people to connect and for businesses to advertise both now and in the years ahead.
With that, France, let's open up the call for questions.