Strong Results by Meta Propel Share Price Surge

Key takeaways:

• Earnings Beat: EPS of $5.33 exceeded estimates of $4.91, exceeding expectations by 9%.

• Revenue Growth: Revenue of $40.11 billion rose 25% YoY, outpacing analyst expectations of $39.01 billion.

• Ad Revenue Up: Ad revenue of $38.71 billion grew 23% YoY, exceeding estimates of $37.81 billion.

• Strong User Growth: Facebook daily active users reached 2.11 billion, exceeding estimates of 2.07 billion.

• Metaverse Investment: Reality Labs revenue of $1.07 billion surpassed estimates of $812.6 million, but operating losses remain high at $4.65 billion.

• Positive Guidance: the Company expects 1Q revenue of $34.5 billion to $37 billion, above estimates of $33.64 billion.

• Shareholder Rewards: Meta announces $0.50 per share dividend and authorizes $50 billion in additional share repurchases.

Shares soared 14% after-hours trading, extending a strong recovery and reaching record highs. The company showed clear growth, not only in core ad business but also in new technology segments.

The results come despite disappointing ad sales that was shown by competitor Alphabet. Meta's resurgence can be attributed to user growth, ad sales rebound, cost-cutting measures, and investor confidence in its AI and metaverse ambitions. On the other hands, Reality Labs' continued losses raise questions about the long-term viability of the metaverse segment. Overall, Meta Platforms delivered strong Q4 results, exceeding expectations and boosting investor confidence. The company's future outlook remains positive, although challenges persist in the metaverse segment.

Enormous price increase in after hours trading with new all-time high. Source: xStation5