Meta's stock has experienced a remarkable 15 per cent surge in trading after it was announced dividends will be paid to investors for the first time.
Mark Zuckerberg’s company saw the spike – which added more than £110 billion to its valuation – after the newly announced dividend was set at 50 cents a share, while a $50 billion share buyback programme is also set to benefit existing investors.
Analysts say the company has clocked one of its most impressive quarters, with its revenue rising 25 per cent to $40.1 billion in the final three months of 2023.
Meanwhile, Meta's net income jumped by over 200 per cent to $14 billion, fuelled by user growth, a recovery in ad sales, and a brutal cost-cutting drive that has seen 21,000 people lose jobs.
In a statement accompanying the earnings report, Mark, 39, emphasised the progress made in advancing AI and the metaverse.
The company foresees growing infrastructure investments beyond the current year, underscoring its commitment to ambitious long-term research into artificial intelligence and product development involving the sector.
During the previous quarter's earnings call, Mark highlighted AI as the primary investment area for 2024, revealing plans to acquire $9 billion worth of Nvidia chips to support the company's AI scaling efforts.
AI is poised to play a pivotal role in elevating advertising campaigns, bolstering advertising revenue, and facilitating new Meta products, including AI-driven chatbots.
Despite Meta's hardware products, such as the Quest 3 VR headset, not yet contributing significantly to revenue, Mark expressed optimism about the broader rollout of AI services in the coming months.
Meta’s 2023 “year of efficiency” involved significant workforce reductions, with over 20,000 employees laid off.
The cost-cutting measures yielded positive results, doubling the company’s operating margin to 41 per cent from 20 per cent in the same quarter of 2022.
Operating expenses decreased by 8 per cent year-over-year to $23.73 billion.
Meta’s CFO, Susan Li, revealed the company’s workforce stood at over 67,300 employees at the end of the fourth quarter, reflecting a 22 per cent reduction from the previous year but a 2 per cent increase from the third quarter as hiring efforts resumed.
Despite the positive financial indicators, regulatory challenges loom large for Meta.
The stunning financial results came after Mark appeared at a heated congressional hearing in Washington.
He faced parents holding pictures of children who died after being affected by online harms, amid allegations tech platforms are failing to protect young people from being exploited.
One senator accused Mark of having “blood on his hands” and added: ‘You have a product that's killing people.”
The entrepreneur issued an apology to the families present at the hearing, and said: “No one should go through the things that your families have suffered and this is why we invest so much and we are going to continue doing industry-wide efforts to make sure no one has to go through the things your families have had to suffer.”
