Meta Platforms Inc. has reported a significant surge in profit and revenue for the fourth quarter, surpassing Wall Street expectations and signaling a robust performance in the social media advertising realm. This impressive financial result boosted Meta's shares in after-hours trading, even as the company projected rising costs driven by its ambitious artificial intelligence (AI) initiatives.
CEO Mark Zuckerberg announced that by 2025, Meta aims for its AI assistant to reach more than a billion users, asserting that Meta AI will become the leading intelligent and personalized assistant globally. This vision marks an intense focus on artificial intelligence, showcasing Meta's forward-looking strategy in the tech industry.
For the October-December quarter, Meta reported earnings of $20.83 billion, or $8.02 per share, marking a 49% increase from $14.02 billion, or $5.33 per share, a year earlier. The company's revenue saw a notable jump of 21%, rising to $48.39 billion from $40.11 billion. Analysts anticipated earnings to be around $6.76 per share, with revenue expectations set at $47 billion, as per FactSet data.
Mark Zuckerberg stated, We continue to make good progress on AI, glasses, and the future of social media, highlighting the company's strategic growth areas. For the upcoming quarter, Meta projects revenue to range between $39.5 billion and $41.8 billion, with analysts expecting figures at the upper end of this spectrum.
Despite the high revenue, Meta also acknowledged rising expenses, projecting costs between $114 billion and $119 billion, primarily due to infrastructure investments and employee compensation. As of December 31, Meta had 74,067 employees, reflecting a 10% increase from the previous year.
Jesse Cohen, an analyst with Investing.com, remarked, Meta’s Q4 performance underscores the company’s resilience in a still-uncertain digital ad market. By beating both earnings and revenue estimates, they've demonstrated that cost discipline and efficiency gains are paying dividends. However, Cohen pointed out that Meta's aggressive capital expenditures indicate a commitment to strengthening their AI infrastructure and metaverse ambitions, offering a glimpse of the company's future trajectory.
In an additional development, Meta has consented to a $25 million settlement concerning a lawsuit initiated by President Donald Trump in 2021. This lawsuit followed the suspension of Trump's accounts after the January 6, 2021, incident at the U.S. Capitol.
Zuckerberg also addressed Meta's evolving relations with governments during a conference call, expressing optimism towards redefining policy interactions under a supportive U.S. administration that favors American technological leadership. He noted, I’m optimistic about the progress and innovation this is going to unlock. This sentiment echoes Meta's confidence in its growth and strategic partnerships on the global stage.
Overall, Meta's stock witnessed a rise of $13.53, or 2%, to $690.02 in after-hours trading, reflecting investor optimism in the company's robust financial health and strategic direction.