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Meta Platforms' (META) Q4 Earnings Beat, Revenues Up Y/Y
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Meta Platforms (META - Free Report) reported fourth-quarter 2023 earnings of $5.33 per share, beating the Zacks Consensus Estimate by 10.35%. The company reported earnings of $1.76 per share in the year-ago quarter.
Revenues of $40.11 billion beat the Zacks Consensus Estimate by 2.87% and jumped 24.7% year over year. At constant currency (cc), the top line improved 22%.
Geographically, the Rest of the World (RoW) revenues grew 33.4% on a year-over-year basis. Asia-Pacific and the United States & Canada revenues increased 24.2% and 19% year over year, respectively. Performance in Europe improved, with revenues growing 34% year over year.
Revenues from Family of Apps (97.3% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 24.2% year over year to $39.04 billion.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, were 3.19 billion, up 7.8% year over year.
Family Monthly Active People or MAP increased 6.4% year over year to 3.98 billion.
Advertising revenues (99.1% of Family of Apps revenues) increased 23.8% year over year to $38.71 billion and accounted for 96.5% of fourth-quarter revenues. At cc, revenues increased 21%.
RoW advertising revenues jumped 31.7% on a year-over-year basis. Asia-Pacific and the United States & Canada advertising revenues increased 22.6% and 18.5% year over year, respectively. Moreover, Europe’s advertising revenues surged 60.5% year over year.
Ad impressions delivered across Family of Apps increased 21% year over year, and the average price per ad increased 2% year over year in the reported quarter. Impression growth was primarily driven by Asia-Pacific and the Rest of the World.
Online commerce was the largest contributor to year-over-year growth, followed by CPG and gaming.
Family of Apps’ other revenues soared 81.5% year over year to $334 million.
Reality Labs’ revenues (2.7% of total revenues) surged 47.3% year over year to $1.07 billion.
Facebook’s User Base Remains Strong
Monthly active users (MAUs) were 3.065 billion, up 3.4% year over year.
MAUs in Asia-Pacific, RoW and the United States & Canada grew 4.2%, 4% and 2.3% year over year, respectively. Europe MAUs climbed 0.2% year over year.
Daily Active Users (DAUs) were 2.11 billion, which increased 5.5% year over year and represented 69% of MAUs.
Asia-Pacific DAUs increased 7% year over year. DAUs in RoW and the United States & Canada grew 7% and 3%, respectively. DAUs in Europe increased 1.3% year over year.
Average Revenues per User in RoW jumped 27.8% on a year-over-year basis. Asia-Pacific, Europe, and the United States & Canada increased 19.7%, 33.8%, and 16.5%, year over year, respectively.
Operating Details
In the fourth quarter, total costs and expenses decreased 8% year over year to $23.73 billion. This included restructuring charges of $1.15 billion.
As a percentage of revenues, total costs and expenses were 59.2%, significantly down from 80.1% reported in the year-ago quarter.
In the reported quarter, Family of Apps expenses were $18 billion, accounting for 76% of Meta’s overall expenses. FoA expenses fell 13% year over year. Reality Labs’ expenses were $5.7 billion, up 14% year over year.
As a percentage of revenues, marketing & sales expenses decreased 620 basis points (bps), while general & administrative expenses fell 390 bps on a year-over-year basis.
Research & development expenses, as a percentage of revenues, were 26.2%, down 420 bps on a year-over-year basis.
Meta’s employee base was 67,317 at the end of the fourth quarter, down 22% year over year.
Operating income of $16.38 billion jumped 156% year over year. The operating margin was 40.8%, expanding significantly from 19.9% reported in the year-ago quarter.
Family of Apps’ operating income surged 97% year over year to $21.03 billion. Reality Labs reported a loss of $4.65 billion compared with the year-ago quarter’s loss of $4.28 billion.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash & cash equivalents and marketable securities were $65.4 billion compared with $61.12 billion as of Sep 30, 2023.
Long-term debt was $18.39 billion as of Dec 31, 2023.
Capital expenditures were $7.9 billion in the fourth quarter compared with $6.76 billion in the previous quarter. Free cash flow was $11.51 billion compared with $13.64 billion reported in the previous quarter.
The company repurchased $6.32 billion of its Class A common stock in the reported quarter. As of Dec 31, 2023, it had $30.93 billion available and authorized for repurchases. Meta also announced a $50 billion increase in its share repurchase authorization.
Meta declared a cash dividend of 50 cents per share payable on Mar 26, 2024, to stockholders of record as of the close of business on Feb 22.
Guidance
Meta expects total revenues between $34.5 billion and $37 billion for the first quarter of 2024.
For 2024, the company anticipates total expenses between $94 billion and $99 billion. Capital expenditure is expected between $30 billion and $37 billion.
It continues to expect Reality Labs’ operating losses to increase year over year in 2024.
Zacks Rank & Other Stocks to Consider
Currently, Meta carries a Zacks Rank #2 (Buy).
META shares have jumped 26.1% compared with the Zacks Computer and Technology sector’s rise of 12.9% in the past six-month period.
Image: Bigstock
Meta Platforms' (META) Q4 Earnings Beat, Revenues Up Y/Y
Meta Platforms (META - Free Report) reported fourth-quarter 2023 earnings of $5.33 per share, beating the Zacks Consensus Estimate by 10.35%. The company reported earnings of $1.76 per share in the year-ago quarter.
Revenues of $40.11 billion beat the Zacks Consensus Estimate by 2.87% and jumped 24.7% year over year. At constant currency (cc), the top line improved 22%.
Geographically, the Rest of the World (RoW) revenues grew 33.4% on a year-over-year basis. Asia-Pacific and the United States & Canada revenues increased 24.2% and 19% year over year, respectively. Performance in Europe improved, with revenues growing 34% year over year.
Revenues from Family of Apps (97.3% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 24.2% year over year to $39.04 billion.
Meta Platforms, Inc. Price, Consensus and EPS Surprise
Meta Platforms, Inc. price-consensus-eps-surprise-chart | Meta Platforms, Inc. Quote
Top-Line Details
Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, were 3.19 billion, up 7.8% year over year.
Family Monthly Active People or MAP increased 6.4% year over year to 3.98 billion.
Advertising revenues (99.1% of Family of Apps revenues) increased 23.8% year over year to $38.71 billion and accounted for 96.5% of fourth-quarter revenues. At cc, revenues increased 21%.
RoW advertising revenues jumped 31.7% on a year-over-year basis. Asia-Pacific and the United States & Canada advertising revenues increased 22.6% and 18.5% year over year, respectively. Moreover, Europe’s advertising revenues surged 60.5% year over year.
Ad impressions delivered across Family of Apps increased 21% year over year, and the average price per ad increased 2% year over year in the reported quarter. Impression growth was primarily driven by Asia-Pacific and the Rest of the World.
Online commerce was the largest contributor to year-over-year growth, followed by CPG and gaming.
Family of Apps’ other revenues soared 81.5% year over year to $334 million.
Reality Labs’ revenues (2.7% of total revenues) surged 47.3% year over year to $1.07 billion.
Facebook’s User Base Remains Strong
Monthly active users (MAUs) were 3.065 billion, up 3.4% year over year.
MAUs in Asia-Pacific, RoW and the United States & Canada grew 4.2%, 4% and 2.3% year over year, respectively. Europe MAUs climbed 0.2% year over year.
Daily Active Users (DAUs) were 2.11 billion, which increased 5.5% year over year and represented 69% of MAUs.
Asia-Pacific DAUs increased 7% year over year. DAUs in RoW and the United States & Canada grew 7% and 3%, respectively. DAUs in Europe increased 1.3% year over year.
Average Revenues per User in RoW jumped 27.8% on a year-over-year basis. Asia-Pacific, Europe, and the United States & Canada increased 19.7%, 33.8%, and 16.5%, year over year, respectively.
Operating Details
In the fourth quarter, total costs and expenses decreased 8% year over year to $23.73 billion. This included restructuring charges of $1.15 billion.
As a percentage of revenues, total costs and expenses were 59.2%, significantly down from 80.1% reported in the year-ago quarter.
In the reported quarter, Family of Apps expenses were $18 billion, accounting for 76% of Meta’s overall expenses. FoA expenses fell 13% year over year. Reality Labs’ expenses were $5.7 billion, up 14% year over year.
As a percentage of revenues, marketing & sales expenses decreased 620 basis points (bps), while general & administrative expenses fell 390 bps on a year-over-year basis.
Research & development expenses, as a percentage of revenues, were 26.2%, down 420 bps on a year-over-year basis.
Meta’s employee base was 67,317 at the end of the fourth quarter, down 22% year over year.
Operating income of $16.38 billion jumped 156% year over year. The operating margin was 40.8%, expanding significantly from 19.9% reported in the year-ago quarter.
Family of Apps’ operating income surged 97% year over year to $21.03 billion. Reality Labs reported a loss of $4.65 billion compared with the year-ago quarter’s loss of $4.28 billion.
Balance Sheet & Cash Flow
As of Dec 31, 2023, cash & cash equivalents and marketable securities were $65.4 billion compared with $61.12 billion as of Sep 30, 2023.
Long-term debt was $18.39 billion as of Dec 31, 2023.
Capital expenditures were $7.9 billion in the fourth quarter compared with $6.76 billion in the previous quarter. Free cash flow was $11.51 billion compared with $13.64 billion reported in the previous quarter.
The company repurchased $6.32 billion of its Class A common stock in the reported quarter. As of Dec 31, 2023, it had $30.93 billion available and authorized for repurchases. Meta also announced a $50 billion increase in its share repurchase authorization.
Meta declared a cash dividend of 50 cents per share payable on Mar 26, 2024, to stockholders of record as of the close of business on Feb 22.
Guidance
Meta expects total revenues between $34.5 billion and $37 billion for the first quarter of 2024.
For 2024, the company anticipates total expenses between $94 billion and $99 billion. Capital expenditure is expected between $30 billion and $37 billion.
It continues to expect Reality Labs’ operating losses to increase year over year in 2024.
Zacks Rank & Other Stocks to Consider
Currently, Meta carries a Zacks Rank #2 (Buy).
META shares have jumped 26.1% compared with the Zacks Computer and Technology sector’s rise of 12.9% in the past six-month period.
Shopify (SHOP - Free Report) , Pinterest (PINS - Free Report) and AvidXchange (AVDX - Free Report) are some other top-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have gained 22.9% in the past six-month period. SHOP is set to report its fourth-quarter 2023 results on Feb 13.
Pinterest shares have gained 34.9% in the past six-month period. PINS is set to report its fourth-quarter 2023 results on Feb 8.
AvidXchange shares have gained 0.8% in the past six-month period. AVDX is set to report its fourth-quarter 2023 results on Feb 28.