Meta Platforms (NASDAQ: $META), the parent company of social media platforms Facebook, Instagram, and WhatsApp smashed earnings estimates in its fourth quarter and fiscal 2024 results, sending the stock rising. Let us take a closer look at the results.
META Q4 Results
For the fourth quarter of fiscal 2024, Meta Platforms reported a 21% YoY jump in revenue to $48.4 billion, beating estimates of 47.04 billion. Net income in the quarter was $20.8 billion, a 49% year-over-year increase, for an EPS of $8.02, above estimates of $6.77.
Meta reported revenue of $164.50 billion for the full year, a 22% YoY increase, and full-year net income of $62.36 billion, a 59% year-over-year increase. The full-year EPS rose 60% YoY to $23.86 compared to $14.87 the previous year.
The company reported total costs and expenses of $25.02 billion for the fourth quarter and $95.12 billion for the full year, a 5% and 8% increase YoY, respectively. Meanwhile, capital expenditures for the fourth quarter and full year came in at $14.84 billion, and 39.23 billion, respectively.
As part of its capital return program, Meta bought back $29.75 billion worth of shares in fiscal 2024. Additionally, it paid out $5.07 billion in dividends for the whole year, with $1.27 billion paid out in the fourth quarter.
As of December 31, 2024, Meta had $77.81 billion in cash, and cash equivalents. It also reported free cash flow of $13.15 billion in the fourth quarter, and $52.10 billion for the full year. As of the end of December 31, 2024, it had $28.83 billion in long-term debt.
2025 Outlook
For the first quarter of fiscal 2025, Meta expects revenue of $39.5 billion to $41.8 billion, below analysts’ estimates of $41.7 billion at the $40.65 billion midpoint. The estimate represents an 8% to 15% year-over-year increase.
The company expects expenses of $114 to $119 billion for the full year, above estimates of $111 billion at the $116.5 billion midpoint.
According to Meta, the second-largest driver of expenses will be employee compensation as they grow their talent base in the areas of monetization, infrastructure, Reality Labs, compliance, and generative AI.
For the full year, the company anticipates capital expenditure of $60 to $65 billion, largely driven by an increase in investments to support its generative AI work and core business.
Earnings Call Highlights
During the earnings call, Meta Platforms CEO Mark Zuckerberg said he expected Meta AI to become the leading AI assistant worldwide. He noted that it was already being used by more people than any other AI assistant. According to him, 2025 will be the year in which an AI assistant reaches 1 billion users.
Zuckerberg added that 2025 would be the year when Llama and open source become “the most advanced and widely used AI models as well.”
He also addressed TikTok, noting that regardless of what happens with the platform, he expects Facebook and Instagram reels to continue growing. Additionally, he expects Threads to become the leading discussion platform, with over a billion users in the next several years.
The CEO noted that Threads have over 320 million monthly active users, and was adding over a million sign ups daily. He also expects WhatsApp’s market share in the US to continue growing in the US, eventually becoming the leading messaging app, like elsewhere in the world.
Commenting on the recent US elections, Zuckerberg noted that this was going to be huge in how they interact with governments. He noted that the current US administration was proud of its leading companies, and “prioritizes American technology winning, and that will defend our values and interests abroad. And I’m optimistic about the progress and innovation that this can unlock.”
META Stock Performance
Following the Q4 earnings beat, Meta stock soared 1.67% during pre-marketing to $687.79 as of 7:43 AM EST. If the pre-market gains hold, META will be at a new all-time high, a remarkable vote of confidence in the company’s AI investments.
The stock has risen 45.26% in the past 6 months and 71.64% in the past 12 months as of Wednesday, January 30, 2025. That is better than the market, with the Communication Services sector up 23.52% in the past 6 months and 32.03% in the past year. Meanwhile, the S&P 500 has risen 10.54% in the past 6 months and 213.48% in the past year.
Compared to peer Alphabet (GOOG), META stock is slightly more expensive, with a forward P/E ratio of 26.60 compared to 22.42 for GOOG. However, META has a high payout ratio of 8.3% compared to 5.31% for GOOG.
Analysts are optimistic about the stock’s future, giving it a strong buy rating. They forecast an average price of $709.67, which is a 4.90% upside from the last closing price. The most optimistic analysts predict a price of $875, with a forecast of $530 on the lower end.
Should You Add META To Your Portfolio In 2025?
META AI was one of the few stocks in the AI space to survive the shock that came from the release of the DeepSeek AI platform. One reason for this is that Meta’s AI work is open source and was part of how DeepSeek created its model.
META investors reacted positively to the release of DeepSeek, as it could potentially present a great case study on how to lower AI training costs; Meta platforms is currently shelling out billions of dollars to train its AI.
Additionally, META stock is reasonably priced compared to other players in the AI industry, such as Nvidia. Consequently, for anyone seeking to invest in the AI space, META could potentially be a great addition to your portfolio as it increases investments in the AI space.
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