Meta has shared one other solid performance report, with the corporate posting a 25% year-over-year increase in revenue, and an enormous 201% jump in net income year-over-year for the three month period.
Despite many questions around its Metaverse vision, in addition to the apparent decline in popularity of Facebook, and its somewhat questionable early efforts to tap into the evolving AI race, Meta continues to be the powerhouse of the social media sector, and stays in a powerful position to capitalize on emerging opportunities.
First off, on users, Facebook’s day by day lively user count rose to 2.11 billion on average for December, up 6% year-over-year.
Honestly, the incontrovertible fact that Facebook’s still adding users is amazing, because it needs to be reaching saturation point in many markets. That’s very true in North America, where Facebook still added 2 million more users.
The death of Facebook has been greatly exaggerated, and while I’d also wish to see time spent stats, in order to grasp exactly how these 2 billion+ users are engaging in the app, Meta did report last yr that user time on Facebook can be rising, because of this of more AI advisable content being injected into user feeds.
The platform stays a critical connector, and it’s also still growing at solid rates in emerging markets, which can be reflected in its monthly user stats.
The chart above shows that just about all of Facebook’s user growth is coming in the Asia Pacific and “Rest of World” segments. That’ll help to position the platform for further success as these markets evolve.
This might be the last time that we get Facebook-specific usage stats, with Meta CFO Susan Li confirming the corporate will only be sharing its collective Family user stats any further. Meta’s Family user counts incorporate unique user data across Facebook, Instagram, Messenger, and WhatsApp.
It’s easy to lose sight of just how significant that figure is. The population of the whole world is around 8 billion, and with 1.4 billion people in China, where Meta’s apps usually are not available, that implies that the vast majority of individuals who can access a Meta app are doing so regularly.
Facebook stays a key ad consideration for this reason, because so many individuals check into the app on daily basis to compensate for the newest news from friends and family. Sure, TikTok now takes up loads of attention, but Meta’s platforms remain dominant in the general market.
In terms of revenue, Meta bought in $40 billion for the quarter, bringing its total to $134 billion for the yr. Meta’s promoting revenue in Q4 totaled $38.7 billion, up from $31.2 billion a yr ago.
As you’ll be able to see, Meta continues to be heavily reliant on the U.S. and European markets, but its other regions are developing, with its holiday results reflecting its ongoing ad system improvements, resulting in increased advertiser demand.
Which results in this interesting note for Facebook advertisers:
“In the fourth quarter of 2023, ad impressions delivered across our Family of Apps increased by 21% year-over-year and the typical price per ad increased by 2% year-over-year. For the complete yr 2023, ad impressions increased by 28% year-over-year and the typical price per ad decreased by 9% year-over-year.”
More ads, in more places implies that the general costs reduce, though it’s price noting that Meta saw a rise in average price per ad in Q4. That’s likely as a consequence of higher overall demand for the vacations, but still, price noting.
On one other front, its longer-term metaverse plan stays costly.
Meta did report a rise in sales from its Reality Labs VR division for the quarter, rising to $1.07 billion. But its cost of development stays high, with overall Reality Labs investment at $5.7 billion for the period.
That implies that, in total, Meta spent over $17 billion on VR development for the complete yr, eclipsing its previous record of $13.7 billion in VR investment in 2022.
So while sales of its recent Quest 3 headset are rising, and the newest version of its Ray Ban Stories glasses are gaining traction, Meta continues to be a great distance from making a living from its future bets.
But even so, there are positive signals, with Meta specifically noting that the rise in Reality Labs revenue was because of this of increased sales of Quest 3 units over the vacation season.
And with Meta also recently adding mobile connectivity for its metaverse environment, enabling non-VR users to have interaction in VR experiences, that ought to help to plant more seeds for the subsequent stage, while Meta’s also eventually planning to integrate generative AI into its VR world constructing tools, which could further personalize its immersive offerings.
Also price noting here is the variance in income in its non-advertising intake, which, in significant part, would reflect the performance of its Meta Verified subscription program.
Meta launched its paid verification package to U.S. users in March, so the outcomes of those sales can be reflected in this element from Q2 onwards. Meta’s “Other” intake increased by over $100 million between Q2 and Q4, which could suggest that, at a basic estimate, Meta has sold around 6 million paid verification subscriptions.
Meta hasn’t released any specific info on this, however the rising numbers here suggest that its verification sales are in the thousands and thousands. Which will help to bring even extra money into its coffers, though that at 6 million, that will still only equate to lower than 0.5% of its overall user base.
There are loads of good signs for Meta in this report, a lot in order that even with the VR losses still being so high, its shares have seen a giant boost, as positive sentiment around the corporate increases.
The storyline last yr was that Meta was losing billions on Zuckerberg’s metaverse dream, but now, as that vision starts to make clear, and its ad business gets back on target, the narrative around Meta is changing once more.
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