Meta, the social media giant, recently delivered some much-needed positive news as the company beat its fourth-quarter revenue estimate. The company reported a revenue of $32.2 billion for the fourth quarter, which is 4.5% lower than the previous year’s $33.7 billion, but higher than the estimated $31.5 billion. This announcement triggered a surge in Meta’s stock futures, with an increase of 18% in after-hours trading.
Over the past year, the company’s shares have suffered a 53% decline, which is a much steeper drop compared to the 19% decrease in the tech-heavy Nasdaq. However, Meta reported a 4% year-over-year increase in daily active users, reaching 2 billion, which exceeded the expected 1.99 billion.
Despite these positive developments, Meta has struggled in the face of declining online advertising spending and increased competition from TikTok, leading to three consecutive quarters of declining revenue. CEO Mark Zuckerberg’s vision of the metaverse has not gained much traction among investors, and the company’s Reality Labs unit lost over $9 billion in the first three quarters of 2022. To address these challenges, Meta has implemented cost-cutting measures, including cutting 11,000 jobs (13% of its workforce) and extending a hiring freeze through 2023.
Despite the challenges, Meta’s strong Q4 revenue performance has provided some hope for the future. The company’s ability to beat expectations and increase its daily active user base is a positive sign for the future. Although it remains to be seen if Meta will be able to recover, for now, shareholders can take comfort in the company’s positive performance.
Meta declared last week that it was lifting the ban on former President Donald Trump’s Facebook and Instagram accounts, which had been suspended for two years due to the January 6, 2021 attack on the Capitol. A spokesperson for the company, Nick Clegg, issued a statement indicating that the company now deems that Trump’s presence does not pose the same level of “serious threat to public safety” as it did right after the Capitol incident.
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