Meta Platforms Inc. experienced a threefold increase in its earnings and reported significantly higher revenue in the last quarter of 2023, driven by a recovery in digital advertising and efforts to reduce costs and lay off employees, which CEO Mark Zuckerberg referred to as the “efficiency year.”

Debra Aho Williamson, a well-established technology analyst, stated that despite the company’s focus on AI and the metaverse, it remains primarily a social media platform that generates most of its income from advertising. She also noted that advertisers continue to show strong support for Meta.

The company headquartered in Menlo Park, California, which owns Facebook and Instagram, announced on Thursday that it made $14 billion, equivalent to $5.33 per share, in the last quarter of the year (October-December). This is an increase from the previous year’s earnings of $4.65 billion, or $1.76 per share.

The revenue increased by 25% to $40.11 billion from $32.17 billion.

According to FactSet Research, analysts had a median expectation of $4.82 per share in earnings and $39.1 billion in revenue.

Meta stated that this year was crucial for our company. We enhanced our operational efficiency, achieved excellent results in our product goals, and enhanced advertising effectiveness for the businesses that depend on our services.

Meta also grew the user base on its apps, with monthly active users on its family of apps — Facebook, Instagram, Messenger and WhatsApp — reaching 3.98 billion as of the end of the year, up 6% from 2022.

As of December 31, Facebook reported a total of 3.07 billion monthly active users, showing a 3% growth from the previous year. The number of users for the company’s other platforms is not disclosed.

The explosive findings were revealed just one day after Zuckerberg appeared before the Senate, alongside other CEOs of social media companies, to discuss the potential risks their platforms may have on children.

Meta is predicting that their revenue for the current quarter will be between $34.5 billion and $37 billion, which is higher than what Wall Street anticipates. Analysts are estimating a revenue of $33.9 billion for the first quarter.

The business reported a decrease of 22% in its employee count, with a total of 67,317 as of December 31, 2023, due to recent layoffs aimed at reducing expenses. However, Meta anticipates an increase in payroll expenses this year as it aims to recruit more highly skilled AI experts in order to advance its goals and remain competitive with other major technology companies in this field.

Meta has announced that it will be distributing a quarterly dividend to its shareholders. The company plans to pay 50 cents per share on March 26 to shareholders who are recorded as of Feb. 22. Moving forward, they intend to continue paying a quarterly dividend.

The portion of the company known as Reality Labs experienced a 47% increase in revenue, reaching $1.07 billion. This includes their virtual reality headsets and augmented reality technology. However, they still reported a total loss of $4.65 billion for the quarter.

According to Insider Intelligence analyst Jasmine Enberg, Meta’s focus on artificial intelligence reflects their determination to become a major player in this field, which is likely to be welcomed by investors and advertisers.

The challenge for Meta remains in demonstrating its ability to successfully blend AI technology with its other major venture, the metaverse,” she stated. “Additionally, a decrease in advertising from Chinese companies could pose a challenge to its advertising sector, and shareholders may not be willing to ignore the increasing losses in Reality Labs if Meta’s advertising business falters.”

After closing at $394.78 with a 1.2% increase, Meta’s stock rose by $55.52 or 14.1% to reach $450.28 during after-hours trading.

Source: wral.com