Meta founder and CEO Mark Zuckerberg speaks throughout the Meta Connect occasion at Meta headquarters in Menlo Park, California, on Sept. 27, 2023.
Josh Edelson | AFP | Getty Images
Mark Zuckerberg is so happy along with his “year of efficiency” that he is extending it indefinitely.
On Thursday’s earnings name, after Meta reported fourth-quarter financials that sailed previous analysts’ estimates, Zuckerberg mentioned he needs to “keep things lean” and has no plans to speed up hiring.
Headcount, which peaked effectively above 86,000 in 2022, shrank 22% final yr to 67,317, as Meta instituted mass price cuts to appease an investor base that had misplaced religion within the firm’s means to regulate to altering market circumstances. At the time, Meta was going through a troublesome digital advert market and the lingering results of Apple’s 2021 iOS replace.
Exactly a yr in the past, Zuckerberg instructed analysts on an earnings name that administration’s theme for 2023 could be the “year of efficiency,” and that Meta would grow to be a “stronger and more nimble organization.”
Wall Street has rewarded him ever since. The inventory nearly tripled in worth final yr, making it the second-best performer within the S&P 500, behind solely Nvidia. It reached a report final month, and the persevering with rally has pushed Meta’s market cap effectively previous $1 trillion.
On Thursday, Meta reported fourth-quarter gross sales development of 25%, the quickest fee of enlargement since mid-2021, to $40.1 billion. Net revenue soared a whopping 201% to $14 billion, and the corporate’s working margin greater than doubled to 41%. The inventory jumped 15% in prolonged buying and selling.
Add all of it up, and Meta is displaying it could actually develop at a wholesome clip whereas additionally dramatically reducing prices, which shrank 8% from a yr earlier. So assured is the corporate in its monetary well being that it approved a $50 billion share buyback and, for the primary time, mentioned it could pay a 50-cent quarterly dividend.
It’s not that Zuckerberg is not prepared to spend cash. He simply would not need to do it on individuals.
Zuckerberg mentioned on the decision that his playbook includes constructing a “world-class compute infrastructure,” which implies spending billions of {dollars} on Nvidia’s synthetic intelligence chips wanted to coach Meta’s AI fashions.
“We’re playing to win here and I expect us to continue investing aggressively in this area in order to build the most advanced clusters,” Zuckerberg mentioned. “We’re also designing novel data centers and designing our own custom silicon specialized for our workloads.”
‘Even past 2024’
Total bills for the yr will probably be $94 billion to $99 billion, Meta mentioned, up from $88.15 billion in 2023. Finance chief Susan Li mentioned capital expenditures will probably be between $30 billion to $37 billion, “a $2 billion increase of the high end of our prior range.”
But in terms of hiring, Zuckerberg mentioned the times of hyper development are within the rearview mirror. Meta nonetheless plans so as to add individuals this yr for high-paying, technical roles, however will increase in headcount will probably be “relatively minimal compared to what we would have done historically,” Zuckerberg mentioned.
“Until we reach a point where we’re just really underwater on our ability to execute, I kind of want to keep things lean because I think that’s the right thing for us to do culturally,” he added.
And that is not only a story for this yr, if Zuckerberg is to be believed.
“I sort of expect that for the next period of time going forward even beyond 2024,” he mentioned.
Meanwhile, Meta’s Reality Labs unit, tasked with creating digital actuality and augmented actuality applied sciences, continues to bleed money and would not seem like slowing down. The division racked up a report working lack of $4.65 billion within the fourth quarter and has now misplaced over $42 billion since late 2020. Revenue, pushed largely by Quest VR headsets, climbed previous $1 billion for the primary time.
Meta mentioned losses at Reality Labs will proceed to “increase meaningfully year-over-year,” underscoring Zuckerberg’s ongoing perception that the metaverse is the computing platform of the longer term.
He’s now not involved with scaring off traders, acknowledging that the main price cuts have enabled Meta to make “different investments where that’s necessary,” Zuckerberg mentioned.
“That was the theme that I laid out at the beginning of the year of efficiency last year, to make us a stronger technology company and give us the flexibility and stability to execute the long-term goals,” he mentioned.
WATCH: Meta broadcasts first ever dividend of $0.50.
Source: www.cnbc.com”