Meta earnings report beats revenue expectations; claims 2023 is the ‘year of efficiency’
Meta stocks rose up to 20% after its Quarter four earnings report showed tighter cost cuts and Mark Zuckerberg promised 2023 to be an efficient year.
Meta released its earnings report for Q4 of the year 2022, with CEO Mark Zuckerberg describing the company’s near future priorities and plans, painting a picture of an efficient way ahead.
Revenue and Daily Usage
- The company beat revenue expectations in the final quarter of 2022, bringing in $32.2 billion, marking a third straight quarter of declining sales.
- Facebook’s user numbers managed to inch up with the platform hitting 1.98 billion daily active users and 2.96 billion monthly active users as of September 2022.
- The company’s cost and expenses ballooned 22% year-over-year to $25.8 billion.
- Reality Labs, the division of Meta building its Quest headsets and coming AR glasses, reported an operating loss of $13.72 billion for 2022.
Meta has downsized its staff by a hefty 13%, with 11,000 people laid off in November. This combined with its aggressive cuts and promise of an efficient 2023 drove stock prices up around 20%. The company took a notable beating in 2022’s market turndown, losing as much as 60% of its value over the course of the year.
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“Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization,” Zuckerberg said.
Content offering and Future expectations
As per the report, Meta plans to put Instagram Reels and the company’s algorithmic recommendation engine as two major focus areas in the coming months. On the whole, Zuckerberg has called attention to Meta’s trendier AI work.
“Facebook and Instagram are shifting from being organized solely around people and accounts you follow to increasingly showing more relevant content recommended by our AI systems,” Zuckerberg said. “And this covers every content format, which is something that makes our services unique, but we’re especially focused on short-form video since Reels is growing so quickly.”
Meta’s core business of serving ads remains challenged, with overall revenue declining by 1%, compared to 2021.
The company expects that its total expenses in 2023 will be in the range of $89 billion to $95 billion, which is lower than its prior outlook of $94 billion to $100 billion for the year. Meta attributed the adjustment to ‘slower anticipated growth in payroll expenses and cost of revenue’.