Meta continues to burn billions in the metaverse
Facebook group Meta's apps are once again a money-making machine: sales up, 14 billion dollars in profit. The Metaverse remains a bottomless pit.
(Image: Michael Vi/Shutterstock.com)
Meta Platforms' advertising machine is running again. In the final quarter of the 2023 financial year, the parent company of Facebook, Instagram, and WhatsApp increased its turnover by a quarter and generated a healthy profit. The company founded by Mark Zuckerberg intends to pay investors a dividend for the first time.
In the fourth quarter of 2023, turnover rose by 25 percent year-on-year to 40.1 billion US dollars (36.7 billion euros), as Meta announced after the US stock exchange closed on Thursday. At the bottom line, profit tripled from 4.65 billion US dollars a year ago to 14 billion US dollars (12.9 billion euros).
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Meta now wants to pay a dividend for the first time and is offering investors the prospect of 50 cents per share. In shareholder circles, the dividend and result have been well received. Meta's share price rose by over 15 percent in after-hours trading. The Group also intends to buy back its shares with a total value of 50 billion US dollars.
Investors are reassured
Investors had repeatedly expressed concern that Meta was spending too much money on a technology with uncertain profit prospects. The doubts became stronger at times last year when the online advertising business slowed down overall. Zuckerberg has now reiterated that Meta can invest in both artificial intelligence and virtual worlds.
The company continues to spend a lot of money on the development of the Metaverse and mixed reality glasses. The operating loss of the Reality Labs division rose from 4.3 billion to 4.65 billion US dollars, while turnover increased from 727 million to just under 1.1 billion US dollars. The division burned through over 16 billion US dollars in the entire financial year.
These investments in the future are offset by a savings program that has relieved the cost side. Since the end of November 2022, the Group has cut over 20,000 jobs and closed branches. In total, Meta spent almost 3.5 billion US dollars on restructuring last year.
3 billion users
Facebook now has 2.11 billion daily active users. Over 3 billion people are active on the platform at least once a month. And every day, 3.19 billion users access at least one of the group's apps. Meta includes Instagram and WhatsApp, among others.
Threads, the Meta alternative to Elon Musk's Twitter successor X, now has 130 million monthly active users. Threads has thus gained around 30 million new users within three months. In December, Meta launched the service in the EU after months of delay.
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