Meta Q4 2024 Earnings
Posted:
The Stock Surges 14% on Three Times Profits and Declares First Dividend
Meta on February 01, 2023, reported earnings for Q4 2023. The company posted a revenue jump of 25% YoY and stood at $40.11 billion, marking the most rapid growth since mid-2021, driven by a resurgence in the online advertising market. (Source: Meta)
Concurrently, the company successfully reduced expenses by 8% YoY amounting to $23.73 billion, and demonstrated significant improvement in its operating margin, which more than doubled to 41%. Starting in 2022, Meta implemented various measures aimed at achieving greater efficiency and reorienting our business and strategic priorities. As of December 31, 2023, the social media giant has successfully concluded the data center initiatives and employee layoffs, with the facilities consolidation initiatives almost entirely finalized. (Source: Meta)
In the fourth quarter, Meta's advertising revenue reached $38.7 billion, accompanied by a reported 2.11 billion Facebook daily active users. Ad impressions exhibited a 21% increase compared to the previous year, while the average price per ad saw a 2% decline. Meta's CEO Mark Zuckerberg has stated that advancements in artificial intelligence have played a crucial role in strengthening Meta's ad business, contributing to its growth, which surpasses that of its competitor, Google. (Source: Meta)
Contrastingly, Meta's Reality Labs continues to pose a financial challenge for the company. The division, responsible for bringing Zuckerberg's metaverse vision to life, incurred a loss of $4.65 billion, up from the $4.3 billion loss reported in the same period the previous year. Meta's Reality Labs unit achieved sales surpassing $1 billion. However, despite this revenue milestone. (Source: Meta)
The imminent launch of Apple's Vision Pro headset introduces the potential for a surge in consumer interest in AR/VR headsets, which could indirectly benefit Meta's Quest line of headsets. (Source: Meta)
Net Income for the quarter soared by 201% amounting to $14 billion, or $5.33 per share nearly trippling on a YoY basis. (Source: Meta)
Meta has declared a dividend of 50 cents per share for investors, scheduled to be paid on March 26. This decision aligns with the notable increase in cash and equivalents, rising from $40.7 billion in the previous year to $65.4 billion at the close of 2023. Additionally, the company has revealed a $50 billion share buyback program.
As of December 31, Meta reported a headcount of 67,317, reflecting a 22% year-over-year decrease, a result of recent layoffs. (Source: Meta)
Outlook
Meta anticipates that the total revenue for the first quarter of 2024 will fall within the range of $34.5 billion to $37 billion.
Meta anticipates that the total expenses for the full year of 2024 will fall within the range of $94-99 billion, aligning with its earlier projection. The company maintains its expectation that several factors will act as drivers for the growth in total expenses during 2024.
These include First, increased infrastructure-related expenses this year, the company acknowledges higher capital investments made in recent years. Consequently, Meta foresees a more substantial rise in depreciation expenses for 2024 compared to 2023. Additionally, the company expects elevated operating costs attributed to managing a larger infrastructure footprint.
Secondly, Meta foresees an expansion in payroll expenses as it addresses the existing hiring shortfall and brings in additional talent to bolster key areas in 2024. This is expected to result in a further shift in the workforce composition towards higher-cost technical roles.
Finally, concerning Reality Labs, the company anticipates a significant YoY increase in operating losses. This is attributed to ongoing product development initiatives in augmented reality/virtual reality and the investments made to scale the ecosystem further.
The company foresees its full-year 2024 capital expenditures to be within the range of $30-37 billion, reflecting a $2 billion increase compared to the higher end of the previous range. Meta expects this growth to be propelled by investments in servers, encompassing both AI and non-AI hardware, as well as data centers. This expansion aligns with their ongoing construction efforts on sites implementing the newly announced data center architecture. (Source: Meta)
Other Updates
Mark Zuckerberg, along with top executives from social media companies TikTok, X, Snap, and Discord, faced rigorous questioning from lawmakers during a hearing on Wednesday. Members of the Senate Judiciary Committee accused the Facebook founder of neglecting the seriousness of child exploitation within the company's family of apps.
Parents present at the hearing criticized Meta and other companies, alleging inadequate safety and design measures that have led to mental health issues for their children and, in some tragic cases, even resulted in deaths.
In an emotional scene on Capitol Hill, Zuckerberg expressed remorse, saying, "I'm sorry for everything you've all gone through. It's terrible. No one should have to go through the things that your families have suffered." (Source: Reuters)
On February 01, 2024, Meta Platform's stock jumped by 15% in after-hours trading following a robust fourth-quarter earnings report. The surge added about $130 billion to the company's stock market value, equivalent to five times the value of smaller rival Snap Inc. (Source: The Guardian)
Visit Us: https://graniteshares.com/institutional/uk/en-uk/
Capital at Risk | For Professional Clients Only
#MetaEarnings #MetaFinancials #EarningsReport #FinancialResults #StockMarket #Investing #Meta #Facebook #Instagram #SocialMedia #TechNews #MetaStock
ETPs by GraniteShares
| Product name | Ticker | ||
|---|---|---|---|
| USD | EUR | GBX | |
| 3SFB | 3SFE | 3SFP | |
| 3LFB | 3LFE | 3LFP | |
| 3SFT | 3S3E | 3S3P | |
| 3FTG | 3FTE | 3FTP | |
| FTNG | FTNE | FTNP | |
| SFTG | SFTE | SFTP | |
DISCLAIMER
This is a disclaimer stating that all trading and investing comes with risks. Always do your research and do not invest more than you can afford to spend.
GraniteShares accepts no responsibility for any loss or damage resulting directly or indirectly from the use of this blog or the contents. GraniteShares Limited (“GraniteShares”) (FRN: 798443) is an appointed representative of Messels Limited which is authorised and regulated by the Financial Conduct Authority.
This blog does not constitute an offer to buy or sell or a solicitation of an offer to buy securities in any company. Nothing contained herein constitutes investment, legal, tax or other advice nor is to be relied upon in making an investment or other decision. No recommendation is made positive or otherwise, regarding individual securities or investments mentioned herein. Any summary list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in a particular investment. Prospective clients must consult with their own legal, tax and financial advisers before deciding to invest. This email contains the opinions of the author and such opinions are subject to change without notice. The source of data is GraniteShares unless otherwise stated. No guarantee is made to the accuracy of the information provided which has been obtained from sources believed to be reliable. This email and the information contained herein is intended only for the use of persons (or entities they represent) to whom it has been provided. Past performance is not a reliable indicator of future results. The value of an investment may go down as well as up and can result in losses, up to and including a total loss of the amount initially invested. Investments may involve numerous risks including, among others, company risks, general market risks, credit risks, foreign exchange risks, interest rate risks, geopolitical risks and liquidity risks. Please note that GraniteShares short and leveraged Exchange Traded Products are for sophisticated investors.
GraniteShares
GraniteShares
