Meta beats expectations on earnings and Q1 outlook, boosts share repurchase by $50 billion

Social media giant Meta (META) reported its fourth quarter earnings after the bell on Thursday beating analysts’ estimates on the top and bottom lines and offered a strong outlook for the first quarter.

For the quarter, Meta reported adjusted earnings per share (EPS) of $5.33 on revenue of $40.11 billion. Analysts were anticipating Adj. EPS of $4.94 on revenue of $39.01 billion, according to Bloomberg consensus data. The company reported revenue of $32.2 billion in the same quarter last year. The company also boosted its stock buyback by $50 billion, and initiated a quarterly dividend of $0.50 per share.

For Q1, Meta said it anticipates revenue of between $34.6 billion and $37 billion, surpassing analysts’ expectations of $33.6 billion.

Shares of meta skyrocketed more than 12% following the report.

Meta’s Advertising revenue topped out at $38.7 billion, beatingng expectations of $37.8 billion. The company also reported 2.11 billion Facebook daily active. Wall Street was anticipating 2.07 billion.

Meta’s Reality Labs, however, continues to burden on the company. The division, which is tasked with turning Zuckerberg’s vision of the metaverse into a reality, lost another $4.65 billion, up from the $4.3 billion the company lost the endeavor in the same period last year. Still, the division beat expectations on revenue, topping $1.07 billion versus an anticipated $812 million.

The launch of Apple’s rival Vision Pro headset could create a jump in consumer interest in AR/VR headsets and generate a knock-on effect for Meta’s Quest line of headsets.

But Meta’s Reality Labs efforts have taken a backseat in investors’ minds to the company’s increased investments in generative AI. In January, Zuckerberg announced in an Instagram Reels post that the company’s long-term strategy was to develop general artificial intelligence and make it open source.

There’s no single definition of generative AI, but broadly speaking, it’s a kind of AI that can think and learn like a human. In other words, it’s capable of understanding a multitude of concepts rather than specializing in a certain field.

Meta founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images)

In his post, Zuckerberg also said Meta is building out its AI capabilities by spending billions of dollars on Nvidia GPUs. The company is already using generative AI features for advertisers to help them build out ads, and its Meta AI chatbot is available through its various apps.

Meta has been on a hot streak over the last 12 months, with shares rocketing 121%, outperforming the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN). In January, the company’s market capitalization once again eclipsed the $1 trillion mark.

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Daniel Howley is the tech editor at Yahoo Finance. He’s been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.

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