Meta Reports Q4 Earnings Beat, Forecasts Slower Revenue Growth and Higher Expenses

Key Points:

* META shares rose 2% in pre-market trading after Q4 earnings exceeded expectations.
* EPS reached $8.02 on revenue of $48.4 billion, surpassing estimates.
* Meta anticipates a slowdown in revenue growth for the current quarter.
* Expenses are projected to increase faster in 2025 than in 2024.

Detailed Performance:

Meta (META) reported fourth-quarter earnings per share (EPS) of $8.02 on revenue of $48.4 billion, exceeding Bloomberg estimates of $6.75 EPS and $46.9 billion revenue. For the full year, net income reached $62.4 billion, a 59% increase from $39.1 billion in 2023.

However, Meta forecasts revenue between $39.5 billion and $41.8 billion for the first quarter, representing 8%-15% growth year-over-year.

Capital Expenditure and Expense Outlook:

Meta expects investments in core business to drive revenue growth in 2025. The company previously estimated capital expenditures in 2024 to range from $37 billion to $40 billion, subsequently revised to $38 billion to $40 billion.

CFO Susan Li anticipates expenses for 2025 to fall between $114 billion and $119 billion, a significant increase from $95.1 billion in 2024. Infrastructure costs and employee compensation are predicted to be primary drivers of this expense growth.

AI and Metaverse Investments:

CEO Mark Zuckerberg emphasized Meta's ongoing progress in AI, augmented reality, and the evolution of social media. The company has allocated $60 billion to $65 billion for AI infrastructure projects this year.

Legal Settlement:

Prior to Meta's earnings release, the Wall Street Journal reported a $25 million settlement reached with President Donald Trump over a lawsuit related to his suspension from Meta platforms after the January 6th insurrection.