On the eve of Facebook's 20th anniversary on social media, Meta announced quarterly revenue and profits that exceeded expectations, and also made its first-ever dividend payout.
After hours on Thursday (February 1st) local time, Meta's stock price surged by over 14%, continuing its long-term growth momentum. In recent weeks, its stock price has reached a new high in over two years. The post market increase on Thursday skyrocketed the company's market value by over $140 billion.
Evercore ISI analyst Mark Mahaney said, "This is one of the most impressive quarters, both fundamentally and compared to expectations."
Initial dividend distribution
It is worth mentioning that in this quarterly report, Meta achieved a milestone - its first dividend distribution since its establishment.
Meta announced that it will distribute quarterly cash dividends of 50 cents per share for Class A and Class B common shares starting from March.
In addition, the company has announced a $50 billion stock buyback.
It is worth mentioning that Meta Mark CEO Zuckerberg currently holds approximately 350 million shares, which means his quarterly pre tax income is approximately $175 million and he will receive approximately $700 million annually from dividends.
So what signal did this dividend payout send? This may indicate Meta's redefinition of its own growth potential.
Usually, rapidly growing technology companies tend to avoid paying dividends and are more inclined to use their earnings to develop new products or make expensive acquisitions. But now, due to regulatory obstacles, Meta's acquisition prospects are weakening.
Analysis suggests that dividend payouts and an additional $50 billion in stock repurchases may attract more patience from investors, as Zuckerberg will place long-term bets on artificial intelligence and the metaverse.
Zuckerberg also emphasized in a statement on Thursday, "We have made significant progress in advancing the vision of artificial intelligence and the metaverse."
Quarterly performance
After Thursday's trading session, Meta released its fourth quarter financial report, which showed quarterly revenue of $40.11 billion, higher than analyst expectations of $39.01 billion; The profit per share was $5.33, higher than the analyst's expected $4.91.
Among them, the holiday shopping period boosted advertising sales, and the advertising department's fourth quarter revenue was $38.71 billion, higher than analyst expectations of $37.81 billion; The Reality Labs department, which designs VR and metaverse, generated revenue of $1.07 billion, exceeding analyst expectations of $812.6 million.
The guidance for the first quarter also generally exceeded expectations. Meta expects its first quarter revenue to be $34.5-37 billion, higher than Wall Street's expected $33.8 billion.
The company also stated that it expects total expenses for the entire year of 2024 to remain between $94 billion and $99 billion.
More investments in metaverse and artificial intelligence
Thanks to the improvement in advertising business, investors seem to be more tolerant of Meta's massive spending in the metaverse. Meta has invested billions of dollars in metaverse technology and established its own artificial intelligence infrastructure.
Zuckerberg told analysts after the report was released that the company's Reality Labs division suffered a loss of $4.65 billion in the fourth quarter, but revenue easily exceeded expectations. Its Quest device achieved a strong sales record of $1.1 billion during the holiday season, far exceeding the expected $804 million.
On Thursday, company executives also announced that they will increase their investment in the metaverse and artificial intelligence fields.
Meta acknowledges that as investment in AR and VR increases in 2024, it still expects the operational losses of Reality Labs to "significantly increase" in 2024, but its Ray Ban smart glasses have achieved unexpected success among consumers.
Ray Ban smart glasses are a hardware device with built-in artificial intelligence assistants. Zuckerberg believes that before smart glasses become mainstream in the future, Meta must produce complete displays and holograms as early as possible, as this hardware is likely to become a "killer application" in the future.