Meta Explodes

Strongest quarterly sales in two years and its first-ever dividend quicklyadded over $197[2]billion in market cap for the tech giant.

Meta has invested heavily in AI to make its ads smarter. And obviously,that paid off.

Revenue came in at $40.11[3]billion, against the estimate of $39.18 billion, as daily active userssmashed expectations of 2.08 billion, reaching 2.11 billion.

Monthly active users grew 3% year-over-year to a record high of 3.07billion [4]

Source: Company financials

Additionally, Meta increased its stock repurchase program by $50 billionand started a quarterly dividend of $0.50 per share.

Looking ahead to the first quarter, Meta projects its revenue to be in therange of $34.6 billion to $37 billion, which is above the market forecastof $33.6 billion.

All that positive news was digested quite well by investors as Meta shareprices exploded, pretty much vertically following the quarterly report.

CEO Mark Zuckerberg was also pleased with the results. “We’ve made a lot ofprogress on our vision for advancing AI and the metaverse.”

The big issue for Meta continues to be its Reality Labs unit, whichalthough passed $1 billion in sales, this quarter, also recorded itsbiggest quarterly loss in the last few quarters of $4.65[5]billion.

Source: Company financials

The reality labs segments include augmented, mixed, and virtualreality-related consumer hardware like the Meta-Ray-Ban smart glasses andQuest 3, along with software and content.

After cutting jobs and costs during the tech downturn that began in 2021,Meta has become more efficient and profitable, boosting its valuation. Thecompany reduced its staff by 22% from the previous year, reflecting theindustry's efforts to grow.

Finally, EPS came much better than expected at $5.33, as the cut inoperating costs, or the “year of efficiencies,” as its CEO labeled it,helped lift Meta’s bottom line.

The stock is up over 35% since the start of the year.

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Footnotes:
• Tradingview.com
• Tradingview.com
• https://www.cnbc.com/2024/02/01/meta-earnings-q4-2024.html
• https://investor.fb.com/home/default.aspx
• https://investor.fb.com/home/default.aspx