Meta Posted Record Revenues in Q4 2023 Boosted by Advertising Improvement
Meta's Record Q4 2023
The social media giant delivered another blockbuster report on Thursday, with record top and bottom lines, making a strong finish to a year marked by an impressive recovery. Meta posted net income of $14 billion in the fourth quarter, more than tripling form a year ago. Total Revenues exceeded $40 billion, up 25% y/y, marking the fastest growth since Q3 2021. Furthermore, executives expect revenues of $34.5-37 in the current Q1 2024 that would mark a 20.44%-29.17% y/y increase, meaning that sales could accelerate further. Bolstered by its turnaround, Meta announced its first ever dividend of $0.5/share. [1]
Those blockbuster results are patrly driven by the improvement in the advertising market – Meta's core business. The digital ads market has been recovering from the hit it took in 2022 due to high inflation, economic uncertainty and other factors. Global digital ad spending widened by 10.7% in 2023 according to Insider Intelligence, which projects a spike of 13.2% in the current year. [2]
The rebound is evident in this week's results by Google, which dominates the market. Ad sales continued to pick up in Q4, with an 11% y/y boost[3]. Amazon.com has also been expanding, with an 23.8% y/y rise in the final quarter of the year. [4] Advertising is Meta's main revenue source and the tech giant has been riding the recovery wave. Ad impressions across its apps rose by 21% y/y, while sales continued this year's acceleration with growth of nearly 24%. It outperformed leader Google and was close to Amazon's performance.
During the earnings call, Susan Li spoke of "growth on all international region", pointing to broad-based demand. Sales from China accounted for a notable 10% of last year's total, which raises some concerns, given strained Sino-Western relations. [5]
The ad business is benefiting from Mr Zuckerberg renewed emphasis on Artificial Intelligence, as the firm incorporates the technology in its advertising systems. With the Advantage+ suite Meta helps advertisers automate their campaigns and recently launched two new generative AI features on the creative side. [6]
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 02 Feb 2024 https://s21.q4cdn.com/399680738/files/doc_financials/2023/q4/Meta-12-31-2023-Exhibit-99-1-FINAL.pdf | |
| Retrieved 02 Feb 2024 https://www.insiderintelligence.com/content/worldwide-digital-ad-spending-forecast-2024#page-report | |
| Retrieved 02 Feb 2024 https://abc.xyz/assets/95/eb/9cef90184e09bac553796896c633/2023q4-alphabet-earnings-release.pdf | |
| Retrieved 02 Feb 2024 https://ir.aboutamazon.com/quarterly-results/default.aspx | |
| Retrieved 02 Feb 2024 https://s21.q4cdn.com/399680738/files/doc_financials/2023/q4/META-Q4-2023-Earnings-Call-Transcript.pdf | |
| Retrieved 04 May 2024 https://www.facebook.com/business/news/generative-ai-features-for-ads-coming-to-all-advertisers |
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