Meta Platforms, the parent company of flagship social network Facebook, has declared its inaugural dividend just days before Facebook’s 20th anniversary.
The announcement accompanied a robust fourth-quarter revenue report, surpassing expectations due to strong ad and device sales during the holiday shopping season.
Following the disclosure, Meta’s shares surged by 12% after hours, marking a continued recovery that propelled the company to record highs for the first time in over two years. This surge in value added approximately $130 billion to Meta’s market capitalization, dwarfing the market value of its smaller rival Snap Inc. (SNAP.N).
The tech giant, a pioneer in the industry, revealed that the dividend payout would be 50 cents per share and also authorised an additional $50 billion for share repurchases. Meta CEO Mark Zuckerberg expressed satisfaction with the progress made in advancing AI and the metaverse, emphasising the company’s commitment to these futuristic technologies.
For the quarter ending December 31, Meta reported a 25% rise in revenue, reaching $40.1 billion, surpassing analyst expectations of $39.2 billion.
The company forecasts first-quarter revenue between $34.5 billion and $37 billion, exceeding Wall Street’s projections of $33.8 billion. Additionally, Meta expects total expenses for the full year 2024 to remain unchanged at $94 billion to $99 billion.
Meta’s recovery from the challenges of 2022, which led to a significant drop in its market value, has been attributed to improved user growth, digital ad sales, and strategic measures such as shedding over 21,000 employees since late 2022.
Investors have become more tolerant of the company’s continued spending, given positive trends in the social media business and investments in metaverse technologies.
Meta’s Reality Labs division, focused on the metaverse, outperformed expectations in the fourth quarter with record sales of $1.1 billion, surpassing the anticipated $804 million. Despite this success, Meta anticipates increasing operating losses for Reality Labs in 2024 as it intensifies investments in augmented and virtual reality.
