Meta Platforms Surpasses Market Expectations with Strong Q4 Earnings

• Meta Platforms (NASDAQ:META) reported earnings per share (EPS) of $8.02, beating analyst estimates.
• The company's revenue reached $48.39 billion, driven by advancements in artificial intelligence (AI) enhancing its advertising business.
• Despite impressive overall performance, Meta's Reality Labs segment saw static revenue growth and an operating loss of $4.97 billion.

Meta Platforms, trading on the NASDAQ under the symbol META, is a leading technology company known for its popular social media platforms, Facebook and Instagram. The company recently reported its fourth-quarter earnings for 2024, surpassing market expectations. Meta achieved earnings per share (EPS) of $8.02, exceeding the analyst estimate of $6.76. The company's revenue for the quarter reached $48.39 billion, surpassing the anticipated $46.99 billion.

Meta's strong performance is largely attributed to advancements in artificial intelligence (AI), which have significantly bolstered its core advertising business. The Family of Apps, which includes Facebook, Instagram, WhatsApp, and Messenger, generated total revenue of $47.3 billion, marking a year-over-year increase from $39 billion. Advertising revenue, a crucial component, rose to $46.8 billion, supported by AI technologies that improved ad impressions and increased the average price per ad by 6% and 14%, respectively.

Despite the impressive revenue figures, Meta's Reality Labs segment, which focuses on metaverse and augmented reality innovations, experienced static revenue growth at $1.08 billion. The operating loss for this segment widened to $4.97 billion. This aligns with Meta's strategy of investing heavily in AR/VR solutions for long-term gains, despite current financial pressures. The company's net income for the quarter was approximately $20.84 billion, while its gross profit stood at about $39.55 billion.

Meta effectively managed its costs, with expenses rising by 5% to $25 billion for the quarter, within the guidance range of $96-98 billion for 2024. The cost of revenue for Meta was approximately $8.84 billion. The company continues to navigate regulatory challenges in the EU and US, maintaining a focus on strategic adaptation. Before taxes, Meta's income was about $23.55 billion, and it incurred an income tax expense of approximately $2.72 billion.

Looking ahead, Meta projects first-quarter 2025 revenue between $39.5 billion and $41.8 billion, reflecting confidence in its core business growth driven by AI innovations. Expenses for 2025 are expected to rise significantly to $114-119 billion, with capital expenditures increasing to $60-65 billion, supporting AI infrastructure expansion. Investors should watch the impact of AI on advertising and user engagement, as well as the progress of Reality Labs in AR and VR technologies.