Meta Q4 Earnings Report

Q4 revenue

• Q4 total revenue was $40.1 billion, up 25% or 22% on a constant currency basis.
• Costs and expenses – Total expenses were $23.7 billion, down 8% compared to last year.
• Capital expenditures – Capital expenditures, including principal payments on finance leases, were $7.9 billion, driven by investments in servers, data centers and network infrastructure.

From Will Easton, Managing Director, Meta ANZ

“Our Q4 earnings show the continued investments and the hard work from our teams have paid off with a strong finish to the year in Australia and New Zealand. As a company, we’re focused on building the most advanced AI products and services that will benefit everyone from our users to our advertising partners. This year, we’re excited to start rolling out several AI services across our Family of Apps in Australia and New Zealand.”

Mark also provided product updates on our work with AI.

• Mark discussed how moving forward, a major goal will be building the most popular and most advanced AI products and services.
• One thing that became clearer in the last year is that this next generation of services requires building full general intelligence.
• Meta has a long history of building new technologies into our services and we have a clear long-term playbook for becoming leaders. There are a few key aspects for success.

1. The first is a world-class compute infrastructure and the second part of our playbook is open-source software infrastructure.

• The next part of our playbook is taking a long-term approach towards the development, learning from unique data and feedback loops, and our culture of rapid learning and experimentation across our apps.
• We start by learning and tuning our products until they perform the way we want, and then we roll them out broadly. But normally, we learn and iterate methodically.
• From there, we'll focus on rolling out services until they reach hundreds of millions or billions of people.

1. And usually only when we reach that kind of scale do we start focusing on what monetization will look like.

• Mark finished this section by saying that he is really excited about pointing our company at developing so many awesome things.

Susan took some time to talk about the two primary factors that drive our revenue performance: Our ability to deliver engaging experiences for our community, and our effectiveness at monetizing that engagement over time.

• We remain pleased with engagement trends and have strong momentum across our product priorities.

1. There are more than 3.1 billion people who use at least one of our apps each day.
2. We’re seeing sustained growth in Reels and video overall as daily watch time across all video types grew over 25% year-over-year in Q4, driven by ongoing ranking improvements.
3. We’re also making good progress in areas that have the potential to grow people’s engagement with our products in the longer-term, such as Threads and generative AI.

• Susan then discussed how there are two parts to increasing monetization efficiency.

1. The first part is growing the level of ad inventory within organic engagement and the other part to increasing monetization efficiency is improving marketing performance.
2. The second part is focused on AI, helping businesses connect their marketing data and measure results and investing in new and engaging on-platform ad experiences.

Sustained growth across apps

• Daily watch time across all video types grew over 25% year-over-year in Q4, and as Mark shared about Reels, “people reshare Reels over 3.5 billion times every day.”
  • The biggest opportunity going forward is unifying our recommendations systems across Reels and other videos, which will help people discover the best content across our systems no matter what form it’s in.
• On WhatsApp, community growth remains strong and we’re seeing good traction with our Channels product, which has quickly scaled to over 500 million monthly active users.
• Threads is also growing steadily with more than 130 million monthly actives.

She then concluded by sharing our outlook.

• We expect first quarter 2024 total revenue to be in the range of $34.5-37 billion. Our guidance assumes foreign currency is neutral to year-over-year total revenue growth, based on current exchange rates.
• Susan then dove into the expense outlook, noting that full-year 2024 total expenses to be in the range of $94-99 billion, unchanged from our prior outlook.

1. For 2024, we expect a few factors to be drivers of total expense growth in 2024:
2. We expect higher infrastructure-related costs this year.
3. We anticipate growth in payroll expenses as we work down our current hiring underrun and add incremental talent to support priority areas in 2024.
4. For Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in AR/VR and our investments to further scale our ecosystem.

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