Facebook (Meta) Reports Fourth Quarter Results

Meta Platforms (FB) reported fourth-quarter results late Wednesday that fell below estimates, as did the outlook. The report was the company’s first since changing its name from Facebook three months ago. FB stock plummeted.

Facebook owner Meta Platforms Inc’s shares plunged more than 20 percent late on February 2 after the social media company posted a weaker-than-expected forecast, blaming Apple’s privacy changes and increased competition for users from rivals like TikTok.

Meta said it faced hits from Apple Inc’s privacy changes to its operating system, which have made it harder for brands to target and measure their ads on Facebook and Instagram. It also cited macroeconomic issues like supply-chain disruptions.

The 18-year-old tech giant, which also faces pressure from platforms like TikTok and Google’s YouTube, said it expected slowing revenue growth in the coming quarter due to increased competition for users’ time and a shift of engagement toward such features as its short video offering Reels, which generate less revenue.

Financial Highlights

The company reported adjusted earnings of $3.67 a share on revenue of $33.67 billion. Analysts expected Meta to report earnings of $3.85 on revenue of $33.7 billion, according to FactSet. Revenue climbed 20% from the year-ago period, representing its slowest growth in six quarters.

That drop to 1.929 billion daily users from 1.93 billion the prior quarter is likely a reflection of Facebook’s increasing lack of relevance with young people. Meta doesn’t break out Instagram’s user numbers, but daily users across all of its apps barely nudged higher to 2.82, adding just 10 million users from the third quarter.

Facebook expects first-quarter revenue to be in the range of $27 billion to $29 billion, which is a growth of 3%-11%. Wall Street expected $30.2 billion.

Facebook also missed estimates with user numbers.

Daily Active Users (DAUs): 1.93 billion vs 1.95 billion expected by analysts, according to StreetAccount.

Monthly Active Users (MAUs): 2.91 billion vs 2.95 billion expected by analysts, according to StreetAccount.

Average Revenue per User (ARPU): $11.57 vs $11.38 expected by analysts, according to Street Account.

The company, which was recently renamed Meta, issued disappointing guidance for the first quarter in addition to coming up short on its fourth-quarter profit and user numbers. Daily Active Users (DAUs) on Facebook were slightly down in the fourth quarter compared to the previous quarter, marking its first quarterly decline in DAUs on record.

About Metaverse

These are the first results released since the company’s name change in late October, which was both a turn toward the metaverse vision and a turn away from its scandal-prone social media empire.

The Silicon Valley giant’s whistleblower crisis last year highlighted accusations that executives prioritized growth over keeping their billions of users safe.

Revenue from Family of Apps reached $32.9 billion, up 16%, with an operating income of $15.9 billion. Revenue from Reality Labs jumped 57% to $877 million, with an operating loss of $3.3 billion.