Meta Thrives on Wall Street Despite Washington Scrutiny

In the midst of intense scrutiny from Washington, Meta, led by CEO Mark Zuckerberg, experienced a triumphant day on Wall Street, boasting an array of positive updates for investors. The social media giant reported quarterly profits that skyrocketed threefold year-on-year, exceeding $14 billion (£11 billion). This financial success was accompanied by a surge in user numbers, reduced operational costs, and a substantial increase in advertising revenue.

Meta Thrives on Wall Street Despite Washington Scrutiny

Even the much-criticized and previously money-losing virtual reality division achieved a milestone by generating $1 billion in revenue. Underscoring its confidence, Meta announced its inaugural dividend, constituting a payout of 50 cents per share to shareholders. The company, which owns popular platforms like Facebook, Instagram, and WhatsApp, further assured investors that it is financially robust and can continue both business investments and quarterly dividend distributions “going forward.”

Surpassing already record-high stock values, Meta’s shares surged by over 12% in after-hours trading. Analysts viewed the decision to introduce dividends as a sign of maturity, particularly as Facebook approaches its 20th anniversary. This move reflects a significant shift in investor sentiment since 2022, when Meta faced a decline in its stock value, prompting a high-profile investor to pen an open letter to Zuckerberg, urging the company to regain its “mojo” amid perceived excesses.

In the broader landscape of big tech, positive financial outcomes were not exclusive to Meta. Amazon witnessed a 14% year-on-year sales leap during the September-December period, while Apple experienced a return to revenue growth after a one-year hiatus.

However, Meta’s financial performance stands out as the most remarkable, especially considering the scathing critique it faced in Washington just a day prior. During a Senate hearing, Zuckerberg was told that Meta’s product was allegedly “killing people,” and he was pressured to apologize to the families of victims of child sexual exploitation.

Addressing regulatory challenges, Meta acknowledged potential significant impacts on its business but swiftly shifted the focus during the investor call. Regardless of the ongoing controversies, Meta continues to attract users and advertisers alike. The company reported that nearly 3.2 billion people were active on its platforms daily in December, marking an 8% year-on-year increase. Revenue for the September-December period soared by 25% year-on-year, surpassing $40 billion.zzzzzzzzzzz

The cost-cutting initiatives implemented by Zuckerberg in the previous year, including substantial job reductions, played a role in reducing expenses by 8%, with a 22% decrease in headcount. Jasmine Engberg, Principal Analyst at Insider Intelligence, commended Meta for exceeding expectations, attributing the stellar performance to the company’s strategic use of artificial intelligence to enhance advertising.

Engberg stated, “It was a stellar Q4. Meta’s 2023 earnings are cause for more celebration as Facebook’s 20th anniversary nears.”