January 25, 2023
Meta Profits Skyrocket, Gives Back To Investors In First Dividend
- by Laurie Sullivan @lauriesullivan, February 2, 2024
Meta reported fourth-quarter revenue of $40.1 billion on Thursday, sending the company's stock soaring after hours. The company announced its first dividend distribution in its history.
The report comes as Meta seeks to integrate artificial intelligence (AI) tools into its core products. In a statement, Meta CEO Mark Zuckerberg said Meta has “made a lot of progress on our vision for advancing AI and the metaverse.”
The company said it will pay a 50 cent-per-share dividend to investors for the first time, and has authorized a $50 billion share buyback program. The cash dividend will be paid quarterly.
AI is being used to improve advertising revenue through services and campaigns, and support new Meta products like AI chatbots. Advertising revenue came in at $38.7 billion, compared with $31.25 billion for the same time period the prior year.
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Meta’s hardware products like the Quest 3 VR headset have not contributed any sizable percentage of the company’s revenue, but the company expects to roll out more AI services in coming months.
As companies like Meta release positive earnings, questions arise over whether layoffs contributed to the profits soaring. The company in 2023 laid off more than 20,000 workers in 2023 as part of what Zuckerberg branded a “year of efficiency" to focus on cost-cutting measures.
Meta’s operating margin doubling to 41% from 20% in the same quarter of 2022, and expenses fell 8% year over year to $23.73 billion.
Meta CFO Susan Li on the call said the company had laid off about 22% of its staff. About 67,300 of employees worked for the company as of the last quarter in 2023, but hiring efforts have resumed.
Despite challenges with the U.S. government, Meta said monthly active users rose 6% across Facebook, Instagram, WhatsApp and Messenger, reaching 3.98 billion as of the end of 2023. Threads, its Twitter-like social app launched in July 2023, has more than 130 million monthly active users, the company said.
