Meta, the parent company of Facebook, Instagram and WhatsApp, reported fourth-quarter revenue of $32.2 billion, a 4% decline from the previous year but marginally above analysts’ estimates.
The company also cut its 2023 expenses outlook by $5 billion and announced an additional $40 billion for share buybacks.
Shares soar: Positive sentiment resulting from the result announcement caused Meta’s shares to rise by 19% shortly after Wall Street’s opening bell on Thursday. The company ended up adding $76 billion to its market value, according to Bloomberg data, reversing previous losses.
According to reports, the fourth-quarter results present a healthier picture for Meta, which has been squeezed over the past year by the economic slowdown that prompted marketers to cut their spending, along with heightened competition from TikTok and challenges in tailoring and measuring ad campaigns following Apple’s privacy changes.
Previous hit on profits: Recall that Meta’s profits took a substantial hit in Q3 2022, attributed to a restructuring cost of $4.2 billion in the quarter related to facilities consolidation, job cuts and the cancellation of multiple data centres. Net income in the fourth quarter dropped 55% to $4.7 billion, compared with consensus estimates for a drop to $6 billion.
Speaking at the call with investors, Mark Zuckerberg said his management theme for 2023 is the year of efficiency.
2023 focus: He said Meta was now focusing on removing some layers of middle management, cutting low-performing projects and deploying artificial intelligence tools to help its engineers be more productive.
- “There’s going to be some more that we can do to improve our productivity, speed and cost structure,” Zuckerberg said. “2022 was a challenging year. But I think we ended up having made good progress on our main priorities and setting ourselves up to deliver better results this year, as long as we keep pushing on efficiency.”
Investment in AI: On the call with analysts, Zuckerberg said the company’s investment in AI was paying off, allowing it to recommend more relevant short-form video content to users for its so-called Reels feature, as well as helping brands to better automate, target and measure their marketing campaigns.
He also said he hoped Meta would become a leader in generative AI, a fast-emerging technology that can be used to produce novel content such as graphics or literature.
- “You’ll see us launch a number of different things this year,” Zuckerberg said.
Meta’s growing user base also remained a bright spot. Monthly active users on one or more of its apps rose 4% to 3.74 billion in the fourth quarter, while user numbers for the Facebook app specifically rose 2% to 2.96 billion.
