Meta shares surge as Q4 revenue jumps 25% to $40bn
Meta Platforms, the company behind Facebook and Instagram, has posted a 25% revenue increase, reaching $40.1 billion for the quarter ending December 31. This exceeded analysts' predictions of $39.2 billion. Net income also rose by over 200% to $14 billion, or $5.33 per share, surpassing estimates of $4.97 per share. Meta CEO Mark Zuckerberg stated, "We've made a lot of progress on our vision for advancing AI and the metaverse."
Announcement of dividend and share buyback boosts Meta's stock
Just before Facebook's 20th anniversary, Meta revealed its first-ever dividend of 50 cents per share and authorized an extra $50 billion in share buyback. This news caused Meta's stock price to jump more than 14% to $450.89, increasing its market value by over $140 billion. The company also predicted Q1 revenue between $34.5-$37 billion, higher than Wall Street's expectation of $33.8 billion, and anticipated that full-year 2024 expenses would remain steady between $94-99 billion.
Zuckerberg set to receive $700 million annually from Meta's dividend
The introduction of Meta's first dividend means that Zuckerberg will receive about $700 million per year, based on his ownership of roughly 350 million shares. This decision indicates the company's confidence in its growth potential, despite regulatory challenges affecting its acquisition strategies. The new dividend and additional share buyback is expected to attract more investor support.
Meta's Reality Labs reports record sales driven by Quest device
Meta's Reality Labs division, which focuses on the metaverse, reported record Q4 sales of $1.1 billion, beating estimates thanks to 'strong sales' of its Quest device during the holiday season. The quest device is a virtual reality headset. Investors had expected sales of around $804 million for the division. However, Meta predicts that operating losses for Reality Labs will "increase meaningfully" as it invests more in augmented and virtual reality in 2024.
Meta faces legal troubles
While Meta continues to grow and concentrate on AI and the metaverse, it also faces legal issues. Zuckerberg recently apologized to families during a Senate Judiciary Committee hearing on online child safety, acknowledging the adverse impact of social media on children. Meta is currently being sued by multiple states, which claim that the company intentionally designs features on Instagram and Facebook to addict children to its platforms.
