Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, announced its first-ever dividend and a stellar quarterly report, as it marked the 20th anniversary of its flagship social network.
Meta’s dividend and share buyback
Meta said it would pay a dividend of 50 cents per share to its shareholders, making it the first of its peers in the tech sector to do so. It also authorized an additional $50 billion in share repurchases, signaling its confidence in its future growth and profitability.
The dividend and buyback announcement came as Meta reported revenue of $40.1 billion for the fourth quarter of 2023, up 25% year-over-year and beating analysts’ expectations of $39.2 billion. Net income rose more than 200% to $14 billion, or $5.33 per share, exceeding expectations of $4.97 per share.
Meta’s stock soared more than 14% in after-hours trading, adding more than $140 billion to its market value and reaching record highs. The company’s shares have recovered from a slump in 2022, when it faced regulatory scrutiny, user backlash, and employee unrest over its handling of various issues, such as privacy, misinformation, and harmful content.
Facebook’s 20th anniversary and rebranding
The impressive results came just days before Facebook, the world’s largest social network, celebrated its 20th anniversary on February 4, 2024. Founded in a Harvard dorm room in 2004 by Mark Zuckerberg and his friends, Facebook has grown into a global phenomenon, connecting more than 3 billion people and revolutionizing how they communicate, discover, and engage with each other and the world.
Facebook has also been accused of ignoring or downplaying the negative impacts of its platform on society, democracy, and human rights, as well as the well-being of its users and employees. In October 2022, the company changed its name to Meta, reflecting its ambition to build the metaverse, a virtual reality where people can interact through digital avatars and experiences.
Zuckerberg, who remains the CEO and controlling shareholder of Meta, said in a post on Threads, another app owned by Meta, that he was proud of what Facebook had achieved in the past 20 years, but also acknowledged the challenges and criticisms it faced.
“You’re never as good as they say when you’re up, or as bad as they say when you’re down. Just keep building and doing good work over long periods of time,” he wrote.
Meta’s outlook and opportunities
Meta said it expected its revenue growth to moderate in the first quarter of 2024, due to seasonal factors and regulatory changes, such as Apple’s iOS 14.5 update, which limits the ability of apps to track users across other apps and websites. Meta forecast first quarter revenue of $34.5 billion to $37 billion, above Wall Street expectations of $33.8 billion.
Meta also said it expected its full-year 2024 total expenses to be unchanged at $94 billion to $99 billion, as it continues to invest heavily in its core products, as well as new initiatives, such as the metaverse, artificial intelligence, and virtual and augmented reality.
Meta faces intense competition from other tech giants, such as Google, Amazon, and Microsoft, as well as emerging rivals, such as TikTok, Snap, and Twitter, in the online advertising and social media markets. It also faces regulatory pressure and legal challenges in various countries, such as the US, the EU, and India, over its market dominance, data practices, and content moderation policies.
However, Meta also has many opportunities to leverage its massive user base, network effects, and innovation capabilities, to create new products and services, and to expand into new markets and segments, such as e-commerce, gaming, and education.
Meta’s dividend and quarterly report show that the company is still growing and generating cash, despite the headwinds and controversies it faces. As Facebook turns 20, Meta is looking ahead to the next 20 years, with a vision to build the metaverse and beyond.
