Meta Platforms Inc. reported impressive growth in both profits and revenues for its fourth quarter, partly driven by increased advertising revenue across its social media platforms. Following the announcement, the company’s stock saw a rise in after-hours trading despite predictions of escalating expenses related to its artificial intelligence initiatives.
CEO Mark Zuckerberg projected that by 2025, a highly advanced and personalized AI assistant could engage over 1 billion users, and he anticipates that Meta AI will spearhead this development.
In the final quarter of the year, Meta recorded earnings of $20.83 billion, translating to $8.02 per share, marking a substantial 49% increase from $14.02 billion, or $5.33 per share, in the same quarter of the previous year. Revenue climbed by 21%, reaching $48.39 billion, up from $40.11 billion.
Market analysts had estimated earnings of $6.76 per share and anticipated revenue of approximately $47 billion, which indicates that Meta exceeded these expectations. “We continue to advance in areas such as AI, augmented reality glasses, and the future trajectory of social media,” Zuckerberg remarked in a statement.
Looking ahead to the ongoing quarter, Meta projected revenues between $39.5 billion and $41.8 billion, with analysts leaning towards the higher end of this range at approximately $41.68 billion. Furthermore, the company forecast expenses between $114 billion and $119 billion, attributing these numbers to infrastructure investments and employee compensation. By the end of the year, Meta employed 74,067 individuals, an increase of 10% from the previous year.
Analyst Jesse Cohen from Investing.com noted, “Meta’s fourth-quarter performance highlights the company’s strength amidst a still-volatile digital advertising market. The ability to surpass both earnings and revenue expectations showcases their focused cost management and efficiency improvements.” However, the analyst emphasized that the more significant message was Meta’s commitment to substantial capital expenditures, indicating a robust investment in AI infrastructure and metaverse goals, even while investors consider the associated costs.
In a separate matter, Meta has agreed to settle a 2021 lawsuit, which involved President Donald Trump, by paying approximately $25 million following the suspension of Trump’s accounts after the January 6th attack on the U.S. Capitol.
Zuckerberg also expressed his thoughts on shaping relationships with governments during a conference call with analysts. “This year will be crucial for redefining these relationships,” he stated. “With the current U.S. administration supporting our leading companies and championing American technology, I believe we will see significant progress and innovation.”
Following the report, Meta’s stock saw an increase of $13.53, equating to a 2% rise, settling at $690.02 during after-hours trading.
