Meta, for the primary time in its historical past, is giving a refund to its buyers.
The corporate, on Thursday, mentioned it might give a 50-cent-per-share dividend to shareholders and in addition introduced plans for a $50 billion share buyback. That got here on the heels of a strong earnings beat throughout the board.
The corporate’s inventory was up greater than 14% in after-hours buying and selling.
Meta reported earnings per share of $5.33 within the fourth quarter of 2023, nicely above the $4.96 that analysts have been anticipating. (For historic perspective, the corporate reported quarterly earnings of simply $1.76 per share in the identical time interval a yr in the past.) Revenues topped expectations as nicely, coming in at $40.1 billion—and the corporate’s steering for the upcoming quarter (between $34.5 billion and $37 billion) is nicely above the $33.8 billion that analysts have been anticipating as nicely.
“This was a pivotal yr for our firm,” the corporate mentioned in a press release. “We elevated our working self-discipline, delivered sturdy execution throughout our product priorities, and improved promoting efficiency for the companies who depend on our companies. We’ll look to construct on our progress in every of these areas in 2024 whereas advancing our formidable, longer-term efforts in AI and Actuality Labs.”
Just about each part the corporate reported was past what buyers and analysts have been anticipating. Each day common customers and month-to-month common customers exceeded predictions, whereas the corporate’s “day by day energetic individuals” quantity, which measures the full variety of individuals utilizing all the corporate’s many platforms, was up 8%.
After final yr’s “yr of effectivity,” which noticed more than 20,000 job cuts in a little more than a year, Meta doesn’t appear to be positioning itself for added cuts. The outlook for 2024 bills (within the vary of $94 billion to $99 billion) from the corporate was roughly the identical because it had beforehand introduced.
About the one space of concern for buyers was the continued losses at Meta’s Actuality Labs unit, which oversees its metaverse ambitions. Analysts have been anticipating losses of $4.26 billion this quarter from that group, however they got here in a good bit greater at $4.64 billion.
The spending in that unit isn’t going to taper off anytime quickly both, as CEO Mark Zuckerberg continues to consider within the potential of the metaverse.
“For Actuality Labs, we anticipate working losses to extend meaningfully year-over-year resulting from our ongoing product growth efforts in augmented actuality/digital actuality and our investments to additional scale our ecosystem,” the corporate mentioned.
Buyers, who may in any other case have grumbled about that announcement, shrugged this off, celebrating the dividend as a substitute. That declaration was catnip to buyers, and it may very well be one which retains transferring the inventory (which is up 14% yr to this point and 109% prior to now yr) even greater. Meta introduced it intends to pay a money dividend on a quarterly foundation going ahead.
The buoyant earnings report comes a day after Zuckerberg was grilled by the Senate Judiciary Committee, alongside executives from TikTik, X (previously referred to as Twitter), Snap, and Discord. The hearings likened social media to Huge Tobacco, and accused Zuckerberg of ignoring the severity of kid exploitation on Meta’s platforms.
That led to a unprecedented second, when Zuckerberg rose from his chair and straight addressed the households that have been on the listening to. “I’m sorry for all the pieces you might have all been via,” he mentioned. “Nobody ought to need to undergo the issues that your households have suffered, and this is the reason we invested a lot.”
Meta didn’t tackle this situation straight in its earnings, however did acknowledge the risk that regulators, each home and worldwide, might current to the corporate.
“We proceed to watch the energetic regulatory panorama, together with the growing authorized and regulatory headwinds within the EU and the U.S. that might considerably affect our enterprise and our monetary outcomes,” it mentioned. “Of word, the Federal Commerce Fee is searching for to considerably modify our current consent order and impose further restrictions on our capability to function. We’re contesting this matter, but when we’re unsuccessful, it might have an opposed affect on our enterprise.”
