AI boosts advertising revenue, Meta's financial report shines, stock price hits historic high

Social media giant Meta announced its fourth-quarter earnings, showing continuous growth in revenue and profits. The company also declared its first-ever dividend payout and a $50 billion stock buyback. Following the financial report, Meta's stock price surged 15% in after-hours trading, reaching a new all-time high.

Advertising Revenue Continues to Grow, But Metaverse Still in the Red

With the online advertising market continuing to rebound, this quarter's revenue grew by 25% from the same period last year to $40.1 billion, reaching the fastest growth rate since mid-2021. Costs have also decreased, with the operating profit margin more than doubling to 41%, clearly indicating that cost-cutting measures are enhancing the company's profitability.

Meta's Reality Labs division had sales exceeding $1 billion this quarter, but still incurred a loss of $4.65 billion, and the losses continue to widen.

AI Boosts Rapid Growth in Advertising Business

Meta CEO Mark Zuckerberg stated that advancements in AI have helped boost the advertising business, with the business growing faster than competitor Google. Google's parent company, Alphabet, disclosed in its earnings report on Tuesday that its advertising revenue grew by 11% from the same period last year, expanding at a slower pace than analysts' expectations.

In a statement, Meta CEO Mark Zuckerberg said:

As our community and business continue to grow, we had a good quarter. We made significant progress in advancing our vision of artificial intelligence and the metaverse.

Meta also expects first-quarter sales to fall between $34.5 billion and $37 billion this year, higher than analysts' estimate of $33.8 billion.

Due to the company's increasing cash flow, Meta also announced that it will distribute a dividend of 50 cents per share to investors on March 26, marking Meta's first dividend payout. Meta also announced a $50 billion stock buyback.

Criticism Mounts Over Inadequate Child Protection

However, according to CNBC, Meta, along with senior executives from social media companies TikTok, X, Snap, and Discord, faced harsh questioning from lawmakers during a hearing on Wednesday. Members of the Senate Judiciary Committee accused them of neglecting inadequate child protection in a range of their applications, leading to children experiencing mental health issues.

Zuckerberg emotionally expressed in Capitol Hill:

I'm sorry for everything you've been through. It's terrible. No one should experience what these children have gone through.