Meta Q4 - Blockbuster numbers and dividend

It's been 20 years since Mark Zuckerberg founded Facebook in a Harvard dorm room. The holding company stock, now called Meta, also happened to rocket 20% higher after it posted stellar results last week. They were truly impressive numbers.

Revenue grew 25% for the quarter, and thanks to trimming a bloated workforce by a fifth, costs dropped by 8%. The result was an eye-popping operating profit margin of 41%, up from 'only' 20% the previous year. All the extra money meant that Meta's net profit increased by 201%. If that wasn't enough to excite shareholders, the company announced it would finally start paying a dividend! To top things off, the board authorised an extra $50 billion in share buybacks.

To generate annual revenue of $135 billion, Meta's family of apps had 4 billion monthly users, 3.2 billion of whom log in daily. That means 1 in 2 people on earth use one of Meta's products on a monthly basis. Simply amazing.

On a valuation basis, Meta and Google (another advertising business) both trade on forward PEs of about 22, which is relatively cheap for high-margin, fast-growing tech companies. Note that Apple, Microsoft, and Amazon are all much more expensive. The market applies a discount because it views advertisers as fickle, which they are. At the start of 2023, advertising revenue was under pressure because people were anticipating a global recession by the end of the year, that never happened.

It is great to see such strong numbers from one of our holdings, especially given how tough the last few years have been as a Meta shareholder. Well done if you rode the wave.