Meta’s Q4 Earnings Beat Expectations, But Forecast Slows Down
Strong Finish to 2024, But Cautious Outlook for 2025
Meta, the social media giant, reported its fourth-quarter earnings on Wednesday, exceeding expectations with a revenue of $48.4 billion and earnings per share of $8.02. This impressive performance led to a 4% surge in shares during early trading on Thursday, reversing initial losses.
A Year of Growth
For the full year, Meta’s net income reached $62.4 billion, a remarkable 59% increase from the previous year’s $39.1 billion. Revenue for 2024 totaled $164.5 billion, up 22% from the previous year. The company’s fourth-quarter revenue rose 21% over last year, demonstrating its continued growth momentum.
Cautious Forecast for Q1 and 2025
However, Meta’s forecast for the first quarter indicates a slowdown in revenue growth, with expectations ranging from $39.5 billion to $41.8 billion, reflecting 8%-15% growth from the prior year period. Additionally, the company declined to provide a full-year revenue forecast for 2025, citing investments in its core business as a key factor.
AI Infrastructure Investments
CEO Mark Zuckerberg recently announced plans to spend between $60 billion and $65 billion on AI infrastructure projects this year, including the construction of a massive data center. This significant investment is expected to drive expense growth in 2025, with CFO Susan Li predicting expenses to fall in the range of $114 billion-$119 billion, up from $95.1 billion in 2024.
Expenses and Employee Compensation
Infrastructure costs, driven by higher operating expenses and depreciation, are expected to be the single largest driver of expense growth in 2025. Employee compensation will be the second-largest factor, as the company adds technical talent in priority areas such as infrastructure, monetization, Reality Labs, generative AI, and regulation and compliance.
Progress in AI and Social Media
Despite concerns over DeepSeek’s claims of producing an AI model that can compete with Silicon Valley’s best for a fraction of the cost, CEO Mark Zuckerberg remains optimistic about Meta’s progress in AI, glasses, and the future of social media. “I’m excited to see these efforts scale further in 2025,” he said.
Settlement with President Trump
In a separate development, Meta reached a $25 million settlement with President Trump over a lawsuit regarding the company’s decision to suspend the president from its platforms following the January 6 insurrection in 2021.
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