Social media giant Meta reported its financial results for the fourth quarter and the full year of 2022. Results show that the company was hit with a decrease in net income
Meta founder and CEO Mark Zuckerberg has dubbed 2023 as the “year of efficiency” for management, with the company aiming toward becoming stronger and a “more nimble organisation.” Zuckerberg also states that the company is seeing strong engagement across its apps. Facebook in particular has reached a milestone of 2 billion daily actives.
However, that’s this year, but how did things look for the company at the end of 2022? Let us dive into the fourth quarter and full-year results of Meta’s financial report.
In the fourth quarter of 2022, Meta’s net income was sitting at just over $4.6 billion, however, this is a 55% decline from the same period the previous year. In Q4 of 2022, net income was over $10 billion. Looking at the year as a whole, Meta ended 2022 with a net income of $23.2 billion. This marks a 41% decrease from $39.4 billion the previous year.
Meta’s quarter revenue last year was £32.17 billion, down 4% year over year. Yearly total revenue in 2022 amounted to $116.6 billion, which is down 1% year over year. However Meta does note in the report that “had foreign exchange rates remained constant with the same periods of 2021, revenue would have been $2.01 billion and $5.96 billion higher, an increase of two percent and four percent on a constant currency basis for the fourth quarter and full year 2022.
Total costs and expenses in Q4 2022 amounted to $25.77 billion, a 22% increase from $21 billion the year before. For the whole year of 2022, Meta’s costs and expenses were $87.6 billion which is a 23% increase from $71.1 billion in 2021. This includes the charges related to Meta’s restructuring efforts of $4.20 billion and $4.61 billion in the fourth quarter and full year of 2022.
The milestone of 2 billion daily active users on Facebook marks an increase of 4% year-over-year. Looking at monthly active users Facebook has seen 2.96 billion as of December 31, 2022, marking an increase of 2% year-over-year. Meta also calculates its family daily active people which was 2.96 billion on average in December last year, an increase of 5% year-over-year. Family monthly active people came in at 3.74 billion as of the very end of December last year, a further 4% increase year over year.
Touching on the headcount, Meta states it took several measures to pursue greater efficiency to “realign our business and strategic priorities”. What this is referring to is the layoff of approximately 11,000 Meta employees. Meta claims its headcount was 86,482 as of December 31, 2022, an increase of 20% year-over-year.
It also states that the reported headcount includes “a substantial majority of the approximate 11,000 employees impacted by the layoff we announced in November 2022.” This cut in employees is expected to be reflected in the headcount for the first quarter of 2023. A major role in the job losses was supposedly down to Zuckerberg’s vision for the metaverse. One he was willing to sink a lot of money into. Last year was a rough one for the company and having to lay off so many members of staff was certainly a bitter note. We are seeing many big tech layoffs in companies such as Microsoft, Google, and even PayPal.
Looking at the first three quarters of 2022, Meta lost over $9 billion in its Reality Labs division, the area that is focused on the company’s metaverse mission. Then in the last three months of last year, the company lost over a further $4 billion. Despite the losses, Zuckerberg seems keen to focus on the metaverse. He claims that the company has two major technological aspects driving the company’s roadmap, these are AI and a long-term commitment to the metaverse.
Speaking on AI, Zuckerberg commented on the AI discovery engine, stating that the system for both Facebook and Instagram are shifting from “being organised solely around people and accounts you follow. To increasingly show more relevant content recommended by our AI systems.” Zuckerberg also noted that the platforms are very focused on short-form video and its Reels system is growing quickly. With the rise in popularity of apps such as TikTok, more social platforms are looking to capitalise on short snappy videos. Zuckerberg revealed that Reel plays across Facebook and Instagram have more than doubled over the last year.
AI was named “the foundation of our discovery engine and our ads business” with further goals for it to enable new products in the future and transform the shape of Meta apps. Zuckerberg also commented on Generative AI claiming that it is “an extremely exciting new area with so many different applications, and one of my goals for Meta is to build on our research to become a leader in generative AI. In addition to our leading work in recommendation AI.” All aboard for the generative AI train.
Into the metaverse
The metaverse is clearly a core focus for the company, it did switch its name to Meta after all. Last year the mixed reality Quest Pro launched, for $1,499 I might add. Yet it does mark another step forward for the company in showing what it is capable of creating. Zuckerberg commented on the idea of mixed reality and how they are focused on “building platforms to deliver better social experiences than what’s possible today on phones.” Mixed reality offers the ability to blur both worlds and has the immersiveness of VR while remaining in the physical world.
Zuckerberg also claims that later in the year there are plans to launch the next generation of consumer headsets “which will feature Meta Reality as well. I expect that this is going to establish this technology as the baseline for all headsets going forward, and eventually of course for AR glasses as well.” It seems that Meta may have more competition in the mixed reality market as Samsung just announced it’s teaming up with Qualcomm and Google to build a mixed reality platform.
Overall it seems that Meta is looking toward the future and is ready to put a turbulent 2022 behind them. Core focuses on evolving markets such as AI, the metaverse and mixed reality are looking to shape much of Meta’s future journey. One we’ll be covering all the way.