Meta Surpasses Expectations, Announces Dividend For First Time Ever

Meta, the parent company of Facebook, delivered an impressive fourth-quarter earnings report, beating both earnings and revenue expectations. The stock surged by 14% in extended trading following the announcement. Here are the key figures from Meta’s Q4 report compared to estimates:

• Earnings per share: $5.33 vs. $4.96 expected by LSEG (formerly Refinitiv)
• Revenue: $40.1 billion vs. $39.18 billion expected by LSEG
• Daily active users (DAUs): 2.11 billion vs. 2.08 billion expected
• Monthly active users (MAUs): 3.07 billion vs. 3.06 billion expected
• Average revenue per user (ARPU): $13.12 vs. $12.81 expected

Meta’s revenue saw a substantial 25% increase in the quarter, reaching $40.1 billion, making it the fastest growth rate since mid-2021. The online advertising market’s continued recovery contributed to this growth. Operating margin more than doubled to 41%, reflecting cost-cutting measures that enhanced profitability. Expenses decreased by 8% year over year to $23.73 billion.

Net income soared over threefold to $14 billion, or $5.33 per share, compared to $4.65 billion, or $1.76 per share, in the same period the previous year. Meta plans to pay a dividend of 50 cents per share on March 26, marking its first-ever dividend payment. Additionally, the company announced a $50 billion share buyback program.

Meta’s Reality Labs unit reported sales surpassing $1 billion in the quarter, although the virtual reality unit recorded losses of $4.65 billion.

The company anticipates first-quarter sales to be in the range of $34.5 billion to $37 billion, surpassing analysts’ expectations of $33.8 billion. Expenses for 2024 are estimated to be between $94 billion and $99 billion.

Meta’s headcount as of December 31 was 67,317, reflecting a 22% year-over-year decrease following layoffs.

Chinese retailers played a role in Meta’s financial recovery, with revenue from China-based advertisers accounting for 10% of sales for the year. Zuckerberg attributed the growth to advances in artificial intelligence, which boosted the ad business.

The earnings report follows a challenging Senate Judiciary Committee hearing where Meta’s CEO Mark Zuckerberg and other social media executives faced tough questions from lawmakers regarding child exploitation concerns and platform safety.

Despite the strong financial results, Zuckerberg highlighted Meta’s commitment to investing in AI and computing infrastructure without significant expansion in headcount. The company aims to maintain a lean structure, with minimal additions to its workforce.

Meta’s robust performance adds to a positive trend in the tech industry, with Amazon and Apple also reporting better-than-expected results, marking the end of the earnings season for major tech companies.