Meta Reports Record Q4 Profit and Revenue, Driven by Strong Ad Sales and AI Investments

Preview

Meta's financial performance in the fourth quarter of 2024 significantly exceeded Wall Street's expectations, showcasing robust growth in both profit and revenue. The company reported a record-breaking quarterly profit of $20.84 billion, marking a 49% increase year-over-year. This translates to earnings per share (EPS) of $8.02, up 50% from the previous year, surpassing the consensus estimate of $6.76.

Revenue for the quarter reached $48.39 billion, representing a 21% year-over-year growth and beating analyst expectations of $47.04 billion. This impressive performance was driven primarily by strong advertising revenue, particularly on platforms like Facebook and Instagram. The average price of ads on Meta's platforms increased by 6%, contributing to the overall revenue surge.

Meta's success in the quarter can also be attributed to its strategic investments in artificial intelligence (AI) and its expanding AI capabilities. The company has been heavily investing in AI, which has been a key driver of its revenue growth. This includes the development of new AI systems and enhancements to existing ones, which have improved user engagement and monetization efforts.

Despite the strong quarterly performance, Meta's stock faced a decline in after-hours trading. This downturn was primarily due to the company's guidance for the first quarter of 2025, which projected a potential slowdown in revenue growth. Meta forecasted first-quarter revenue to be between $34.5 billion and $37 billion, which, while above Wall Street's expectations, indicated a moderation in growth compared to the previous quarter.

Overall, Meta's fourth-quarter results highlight the company's ability to leverage its platforms and AI investments to drive significant financial gains, although it also signals caution for future growth prospects.