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Meta Platforms, the parent company of social media giant Facebook, witnessed a substantial surge in its stock, soaring 14% in extended trading after delivering impressive fourth-quarter earnings that exceeded expectations. The company also announced its inaugural dividend payment, showcasing robust financial health.
Here are the key highlights from Meta’s fourth-quarter report:
– Earnings Per Share (EPS): $5.33, surpassing the expected $4.96 (according to LSEG, formerly Refinitiv).
– Revenue: $40.1 billion, beating the expected $39.18 billion (according to LSEG).
– Daily Active Users (DAUs): 2.11 billion, exceeding the expected 2.08 billion.
– Monthly Active Users (MAUs): 3.07 billion, surpassing the expected 3.06 billion.
– Average Revenue Per User (ARPU): $13.12, higher than the expected $12.81.
The company reported a 25% surge in revenue from $32.2 billion in the same quarter a year earlier, marking the fastest growth rate since mid-2021. Operating margin more than doubled to 41%, indicating successful cost-cutting measures and increased profitability.
Meta’s net income witnessed a remarkable threefold increase, reaching $14 billion, or $5.33 per share, compared to $4.65 billion, or $1.76 per share, in the corresponding period last year.
In a strategic move, Meta declared its first-ever dividend payment of 50 cents per share, scheduled for March 26. This announcement aligns with the company’s strengthened financial position, with cash and equivalents expanding from $40.7 billion to $65.4 billion by the end of 2023. Additionally, Meta unveiled a $50 billion share buyback initiative.
Sales in Meta’s Reality Labs unit surpassed $1 billion in the quarter, underscoring the growth potential in the virtual reality segment. However, the virtual reality unit reported losses amounting to $4.65 billion.
Meta CEO Mark Zuckerberg expressed satisfaction with the company’s performance, emphasizing progress in advancing artificial intelligence (AI) and the metaverse. He highlighted the positive momentum in Meta’s community and business growth.
Looking ahead, Meta provided a sales outlook for the first quarter, anticipating a range between $34.5 billion to $37 billion. Analysts had expected revenue of $33.8 billion. The company projected expenses for 2024 to fall within the range of $94 billion to $99 billion.
Despite a 22% year-over-year decrease in headcount to 67,317 as of December 31, Meta emphasized its ongoing commitment to investing in AI and enhancing computing infrastructure to accommodate larger workloads.
Meta’s financial rebound over the past year was notably influenced by increased spending from Chinese retailers on Facebook and Instagram ads. Revenue from China-based advertisers contributed to 10% of total sales for the year, driving 5 percentage points of growth.
The positive earnings report follows the company’s participation in a Senate Judiciary Committee hearing, where Mark Zuckerberg and executives from other social media platforms faced tough questioning about child exploitation and user safety concerns. Meta aims to sustain its growth by continuing to invest in AI and computing infrastructure while maintaining a lean approach to hiring.
As Meta Platforms’ market capitalization approaches $1.2 trillion, the stock’s strong after-hours performance reflects investor confidence in the company’s financial resilience and strategic initiatives for future growth.