Meta Pleases As ‘Year Of Efficiency’ Pays Off With FY23 Results

Meta Platforms has pleased Wall Street after its ‘year of efficiency’ pledge made this time last year, by CEO Mark Zuckerberg.

That 2023 pledge was made afterheavy Metaverse spending, a tough digital ad market, and the lingering effects of Apple’s 2021 iOS update, took a hefty toll on Meta’s 2022 profits.

During 2023 Meta repeatedly slashed its workforce numbers as well as other operating expenses. This aggressive cost cutting saw Meta’s stock price almost triple in value last year, and propelled Meta’s market cap well past $1 trillion.

Q4, FY23 results

And Meta has now posted its fourth quarter and full year 2023 financial results, which revealed impressive growth in Q4 profits and revenues.

The results also blew past analyst expectations, pushing Meta’s share price up 14.1 percent in after hours trading.

So what is the financial performance that has so pleased investors?

Well for the fourth quarter ending 31 December 2023, Meta’s net profit rose a staggering 204 percent to $14bn, compared with a profit of $4.6bn in the same year-ago quarter.

Q4 sales also increased 25 percent to $40.1bn from $32.1bn in Q4 2022.

There was equally good news of when examining the full year results, as the annual net profit rose 69 percent to $39bn for FY2023, up from $23.2bn in FY2022.

Annual revenues meanwhile rose 16 percent to $134.9bn from $116.6bn in 2022.

“We had a good quarter as our community and business continue to grow,” said Mark Zuckerberg, Meta founder and CEO. “We’ve made a lot of progress on our vision for advancing AI and the metaverse.”

Happy investors

It is clear that Meta’s cost cutting has played a part here, as the firm said it had 67,317 employees as of 31 December 2023.

This is a 22 percent decrease year-over-year, after Meta repeatedly laid off thousands of workers in 2022 and 2023.

On a Thursday earning call, Zuckerberg was quoted by CNBC as telling analysts that he is extending Meta’s ‘year of efficiency’, and said he wants to “keep things lean” and has no plans to accelerate hiring.

Indeed he reportedly said he wants to keep hiring “relatively minimal compared to what we would have done historically.”

However Meta said it expects higher payroll costs this year as it plans to add more highly-paid AI specialists to further its AI ambitions.

Acquiring these skilled people has heavy cost implications, as their skills are highly sought after by many companies.

Meta also pleased investors by announcing its first-ever cash dividend of $0.50 per share to be paid out on 26 March, coupled with a $50 billion share buyback.

Meta also said it it plans to pay a quarterly dividend going forward.

Key metrics

Meta also published its key metrics, which showed that Facebook daily active users (DAUs) were 2.11 billion on average for December 2023, an increase of 6 percent year-over-year.

Meanwhile Facebook monthly active users (MAUs) were 3.07 billion as of December 31, 2023, an increase of 3 percent year-over-year.

In Q4, ad impressions delivered increased by 21 percent year-over-year.

Thursday’s financial report comes one day after Mark Zuckerberg had appeared in a Senate hearing, alongside other social media executives, in order to testify about the impact of the company’s platforms on young users.

During the hearing, Zuckerberg issued a rare apology to the parents of children who had been harmed by Facebook and Instagram.