Positive surprises from better-than-expected user growth and average revenue per user (ARPU) have led to a better-than-expected top line for Meta.
For Q4’2023, guidance was in line with expectations, with sales in the range of $36.5 billion to $40 billion, against the analyst forecast of $38.85 billion, which would bring total revenues for 2023 north of $133 billion (+14% year-over-year jump).
On top of that, The „Year of Efficiency, “ as labeled by CEO Mark Zuckerberg, has caused Meta’s operating costs in particular headcount to be reduced, which resulted in the highest profit ($11.5 billion) and earnings per share ($4.39) in the last several quarters.
As a result, the company equity has done outstanding this year despite the turbulent geopolitical and macroeconomic landscape. The stock is up +135% year-to-date, outperforming by miles the modest +32% gain of the heavy tech Nasdaq over the same period.
However, the good news ended here.
Meta CFO Susan Li said she expects „greater uncertainty and volatility ahead.” and “observed softer ad spend in the beginning of the fourth quarter, “ correlating with the start of the Middle East conflict.
Meta is investing a lot of capital into VR and AR, but those massive bets have not paid off for now.
The company has lost over $25 billion in its Reality Labs since 2020, and $13.7 billion of that came last year. It has now lost close to $37.5 billion since Q3’2020. Those snowballing losses will only go up “…for Reality Labs, we expect operating losses to increase meaningfully yearly due to our ongoing product development…” said Zuck.
Despite those losses, the company keeps investing massive amounts of capital into the segment with the recent launches of Meta AI, Meta Quest 3, and Ray-Ban Meta smart glasses.
This showcases the company’s ambition to leverage its massive user base of over 3 billion people, or around 38% of the global population, with integrated AI technology products. The company is also implementing AI-powered advertising models to improve its sales.
CEO Mark Zuckerberg said, „AI will be our biggest investment area in 2024“, on the quarterly call.
Alternatively, traders can short Meta using our -3x Facebook .
Sandeep joined Leverage Shares in September 2020. He leads research on existing and new product lines, asset classes, and strategies, with special emphasis on analysis of recent events and developments.
Sandeep has longstanding experience with financial markets. Starting with a Chicago-based hedge fund as a financial engineer, his career has spanned a variety of domains and organizations over a course of 8 years – from Barclays Capital’s Prime Services Division to (most recently) Nasdaq’s Index Research Team.
Sandeep holds an M.S. in Finance as well as an MBA from Illinois Institute of Technology Chicago.
Julian joined Leverage Shares in 2018 as part of the company’s primary expansion in Eastern Europe. He is responsible for web content and raising brand awareness.
Julian has been academically involved with economics, psychology, sociology, European politics & linguistics. He has experience in business development and marketing through business ventures of his own.
For Julian, Leverage Shares is an innovator in the field of finance & fintech, and he always looks forward with excitement to share the next big news with investors in the UK & Europe.
Violeta joined Leverage Shares in September 2022. She is responsible for conducting technical analysis, macro and equity research, providing valuable insights to help shape investment strategies for clients.
Prior to joining LS, Violeta worked at several high-profile investment firms in Australia, such as Tollhurst and Morgans Financial where she spent the past 12 years of her career.
Violeta is a certified market technician from the Australian Technical Analysts Association and holds a Post Graduate Diploma of Applied Finance and Investment from Kaplan Professional (FINSIA), Australia, where she was a lecturer for a number of years.
Oktay joined Leverage Shares in late 2019. He is responsible for driving business growth by maintaining key relationships and developing sales activity across English-speaking markets.
He joined Leverage Shares from UniCredit, where he was a corporate relationship manager for multinationals. His previous experience is in corporate finance and fund administration at firms like IBM Bulgaria and DeGiro / FundShare.
Oktay holds a BA in Finance & Accounting and a post-graduate certificate in Entrepreneurship from Babson College. He is also a CFA charterholder.
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