Meta shares jump 14% after profit triples and company announces first-ever dividend

Meta beat on earnings and revenue in its fourth-quarter earnings report Thursday and announced its first-ever dividend payment. The stock soared 14% in extended trading.

Here are the key numbers:

• Earnings per share: $5.33 vs. $4.96 expected by LSEG, formerly known as Refinitiv
• Revenue: $40.1 billion vs. $39.18 billion expected by LSEG
• Daily active users (DAUs): 2.11 billion vs. 2.08 billion expected, according to StreetAccount
• Monthly active users (MAUs): 3.07 billion vs. 3.06 billion expected, according to StreetAccount
• Average revenue per user (ARPU): $13.12 vs. $12.81 expected, according to StreetAccount

Revenue jumped 25% in the quarter from $32.2 billion a year earlier, the fastest rate of growth for any period since mid-2021, as the online ad market continued to rebound. Meanwhile, the company’s expenses decreased 8% year over year to $23.73 billion, and its operating margin more than doubled to 41%, a clear sign that cost-cutting measures are bolstering profitability.

Net income more than tripled to $14 billion, or $5.33 per share, from $4.65 billion, or $1.76 per share, a year earlier.

Meta said it will pay investors a dividend of 50 cents a share on March 26. That comes after cash and equivalents swelled to $65.4 billion at the end of 2023 from $40.7 billion a year earlier. The company also announced a $50 billion share buyback.

The after-hours market jump continues a rally from 2023, when the stock almost tripled. It hit a record in January and was up 12% this year prior to the earnings report. Based on its late-trading price, Meta’s market cap has swelled to almost $1.2 trillion.

Sales in Meta’s Reality Labs unit passed $1 billion in the quarter, though the virtual reality unit recorded $4.65 billion in losses.

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

Meta said it expects first-quarter sales to be in the range of $34.5 billion to $37 billion. Analysts were expecting revenue of $33.8 billion. Expenses in 2024 will be in the range of $94 billion to $99 billion.

Meta said headcount was 67,317 as of Dec. 31, representing a 22% year-over-year decrease following layoffs.

Finance chief Susan Li said on the call with analysts that the biggest drivers of revenue growth came from companies in areas including e-commerce, entertainment and gaming.

Part of Meta’s financial recovery over the past year was driven by Chinese retailers, which have bolstered spending to reach users across the globe. Fast-growing upstarts Temu and Shein, which originated in China, have been pouring money into ads on Facebook and Instagram. Li said on Thursday that revenue from China-based advertisers accounted for 10% of sales for the year and 5 percentage points of growth.

Zuckerberg has said advances in artificial intelligence have helped bolster the ad business, which is growing faster than rival Google’s. In Alphabet‘s earnings report Tuesday, the company said Google ad revenue increased 11% from a year earlier, slower expansion than analysts were expecting.

Meta’s report comes alongside results from Amazon and Apple and marks the end of earnings season for tech’s mega-cap companies. Amazon reported better-than-expected results, with its ad business showing continued growth, and Apple also exceeded estimates, reporting revenue growth for the first time in a year.

Zuckerberg said Meta will continue to invest in AI and in building up its computing infrastructure to handle bigger workloads. But that growth will come without much expansion in headcount. Zuckerberg said the company has a “big recruiting backlog,” because it’s still working through the organizational changes tied to last year’s layoffs and is adding people in areas that will see increased investment.

As far as the company’s ongoing hiring plans, Zuckerberg said additions will be “relatively minimal” because he wants to “keep things lean.”

Zuckerberg, along with the top executives of social media companies TikTok, X, Snap and Discord, faced tough questioning from lawmakers at a hearing Wednesday. Members of the Senate Judiciary Committee accused the Facebook founder of ignoring the severity of child exploitation on the company’s family of apps.

Parents attending the hearing lambasted Meta and other companies for what they allege are insufficient safety and design measures that have caused mental health issues for their children and, in some cases, even resulted in their deaths.

“I’m sorry for everything you’ve all gone through. It’s terrible,” Zuckerberg told the parents in an emotional scene on Capitol Hill. “No one should have to go through the things that your families have suffered.” 

WATCH: Meta CEO Mark Zuckerberg apologizes to parents at online child safety Senate hearing