In what CEO Mark Zuckerberg dubbed the “year of efficiency,” Meta Platforms Inc. tripled its earnings and reported significantly greater revenue in the last quarter of 2023 thanks to a comeback in digital advertising as well as cost-cutting and layoffs.
Longtime tech analyst Debra Aho Williamson said, “The company can talk all it wants about AI and the metaverse, but it’s still a social media company that gets nearly all its revenue from advertising, and advertisers still clearly love Meta.”
Facebook’s and Instagram’s parent company, Menlo Park, California-based, announced on Thursday that it made $14 billion in revenue from October to December, or $5.33 per share. This is an increase from $4.65 billion, or $1.76 per share, in the previous year.
From $32.17 billion to $40.11 billion, revenue increased by 25%.
According to FactSet Research, analysts were averaging $4.82 per share in earnings on $39.1 billion in revenue.
Laptops 1000“This year was crucial for our business. In a statement, Meta stated, “We strengthened our operational discipline, achieved excellent execution across our product priorities, and enhanced advertising performance for the companies that depend on our services.”
Additionally, Meta increased the number of users on its apps. As of the end of the year, 3.98 billion people were active monthly on its family of apps, Facebook, Instagram, Messenger, and WhatsApp, an increase of 6% from 2022.
As of December 31, Facebook has 3.07 billion monthly active users, up 3% from the previous year. The user base of the company’s other platforms is not broken out.
The shocking findings were released just one day after Zuckerberg and other CEOs of social media testified before the Senate about the risks that their platforms represent to young users.
Meta is projecting revenue for the current quarter between $34.5 billion and $37 billion, which is higher than what Wall Street had predicted. For the first quarter, analysts predict sales of $33.9 billion.
Laptops 1000As of December 31, 2023, the corporation reported having 67,317 employees, a 22% fall from the previous year after thousands of workers were let go to reduce costs. However, Meta anticipates more payroll expenses this year as it intends to bring on more highly compensated AI experts to fulfill its goals and contend with other digital behemoths for expertise in this field.
Additionally, Meta started paying its shareholders a dividend every quarter. It stated that stockholders on record as of February 22 would receive 50 cents per share on March 26. It declared that going forward, it would pay a quarterly dividend.
Despite a 47% increase in revenue to $1.07 billion from the company’s Reality Labs sector, which includes its augmented reality and virtual reality headsets, the division still posted a $4.65 billion quarterly loss.
The company’s efforts in AI “demonstrate the company’s commitment to becoming an AI heavy-hitter—something investors and advertisers will reward,” according to Insider Intelligence analyst Jasmine Enberg.
She stated, “Meta still has a big challenge to prove it can integrate AI with its other big bet, the metaverse.” “However, should Meta’s ad business collapse, investors won’t be prepared to overlook the growing losses in Reality Labs, and a retreat from Chinese advertisers could be a hindrance to its ad business.”
In after-hours trading, Meta’s shares surged by $55.52, or 14.1%, to $450.28. With a 1.2% gain, the stock finished at $394.78.
