Mark Zuckerberg, CEO of Meta Platforms Inc., told his investors on Wednesday that the social media company will be efficient, lean, and decisive with the big help of artificial intelligence.
Meta shares rose more than 20% after the final quarter earnings beat market estimates. Zuckerberg spent 2022 focusing on his futuristic venture called the metaverse. However, on Wednesday, he promised to look into immediate issues such as sending relevant videos to the users at right. It will also make more revenue from messaging products. He said this year would be an efficient one.
Leaner Organization
Zuckerberg told the investors during the earnings call that the organization is removing some middle management layers and making. He will also make the organization flat for faster decision-making. They are also deploying more AI tools to help the engineers to be more efficient.
Mark Zuckerberg has said that Facebook is using Artificial Intelligence (AI) to improve its content recommendation system to make the platform more attractive to advertisers and users. There has been a slump in demand for digital ads, which make up most of its sales, especially from clients in finance and technology. Facebook has pointed to some industries, such as health and travel, where businesses spend more.
Results Exceed Expectations
Meta Inc. reported fourth-quarter sales of $32.2 billion, a 4% decline from the previous quarter but still beat analysts’ estimates. The company also projected first-quarter revenue of $26 billion to $28.5 billion, which aligns with analysts’ average projection of $27.3 billion. Meta is expected to return to growth following the current period.
Snap Inc., the parent company of Snapchat, gave a less optimistic outlook on Tuesday, causing its shares to drop 10%. The company predicted that sales would decline in the current period, with CEO Evan Spiegel noting that the ad slump appears to be reaching its lowest point. “Advertising demand hasn’t really improved, but it hasn’t gotten significantly worse either,” Spiegel said on a conference call.
Meta has made a comeback this year, with its shares gaining 27% as it continues to recover from its worst year in history. The company had to contend with a decrease in advertiser demand due to the economic downturn and stricter privacy rules on Apple Inc.’s iPhone. It made it harder for Meta to offer targeted ads. To reduce costs, Meta laid off 11,000 workers, or 13% of the workforce, in November. Despite these challenges, Meta appears to be back on track and is poised for continued growth in the coming year.
The fourth quarter was an overall improvement for Meta, with the flagship Facebook social network now boasting more than 2 billion daily users, a 70 million increase from the previous year.
Additionally, the company increased its stock buyback authorization by an additional $40 billion, adding to its $10.9 billion from past repurchases. However, the quarter also saw the company record restructuring charges of $4.2 billion due to job cuts.
Meta’s revised forecast for 2023 expenses of $89 billion to $95 billion may help to assuage investor worries that the company is investing too much in its virtual-reality projects. The new numbers are lower than previously predicted, which could help ease any concerns about overspending.
