Meta’s Ad Business Is Still Expanding

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    Meta CEO Mark Zuckerberg will get $175 million from the company's first dividend, which will also benefit top shareholders.

    Mark Zuckerberg surprised everyone last week by apologizing during the Senate's online child safety meeting. A few days later, he made another announcement that Meta would pay its first dividend, making some shareholders very wealthy.

    Rapid increase in revenue

    After the company announced 3 times Meta shares ended the day more than 20% higher after the company booked a portion of its fourth-quarter profit and paid its first-ever dividend.

    For Meta, fourth-quarter sales increased 25% to $40.1 billion from $32.2 billion in the year-ago period.

    This is the fastest growth rate recorded since mid-2021 and is further evidence that the internet advertising business is still expanding. Compared to the previous year, Meta's net profit increased more than three times from $4.65 billion to $14 billion.

    The company predicts first-quarter sales will fall between $34.5 billion and $37 billion. Analysts had expected sales of $33.8 billion.

    initial dividend

    Importantly, Meta has announced that it will pay a quarterly dividend to investors. The March 26 dividend will be 50 cents per share. This was due to an increase in cash and cash equivalents from $40.7 billion to $65.4 billion at the end of 2023. Meta also declared a $50 billion share buyback.

    Friday's stock rally added nearly $200 billion to Meta's market capitalization, pushing its overall valuation to more than $1.2 trillion.

    This dividend announcement was warmly welcomed by investors.

    Ben Ballinger, a technology analyst at Quilter Cheviot, said it was a “symbolic moment in the meta's journey since the challenges of 2022.” In his emailed comments, he said Mark Zuckerberg has signaled his desire to bring shareholders along, emphasizing that Meta is now a mature and growing company. .

    Additionally, investors are paying close attention to Meta's moves in the field of artificial intelligence (AI). The company has a stake in the AI ​​space with its LLaMA large-scale language model, a competitor to his GPT-4 from Microsoft-backed OpenAI.

    Additionally, Ballinger called Meta a “hidden AI winner,” noting that while it won't appear on the show, the company's AI will “better serve advertisers and make the ads themselves more relevant to users.” Probably.''

    Results of the “Year of Efficiency”

    About a year ago, Meta CEO Zuckerberg told analysts on an earnings call that management had chosen 2023 to be the company's “year of efficiency.”

    However, some investors have expressed doubts about the company's huge investment in Metaverse. That's because these investments cost billions of dollars a quarter. Meta's Reality Labs division's fourth-quarter sales topped his $1 billion mark, but the virtual reality division posted his $4.65 billion loss, more than Vision Pro's.

    In response to the changing economic environment, Apple updates, and rising interest rates, Meta has cut more than 20,000 jobs. These steps seem to be paying dividends. The company's expenses fell 8% year over year to $23.73 billion, while Meta reported his operating margin doubled to 41%.

    According to other related reports, Meta is filing a lawsuit in Luxembourg's General Court seeking supervisory fees imposed by the European Commission under the Digital Services Act (DSA).


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