Meta's 2022 Financial Results Show Mixed Results, Stock Jumps 17%
Meta, formerly known as Facebook, has released its final quarterly and full-year financial results for 2022, which showed mixed results. Although the company slightly exceeded analyst expectations with its revenue, it has yet to fully recover from a difficult past year. Following the release of the results, Meta's stock value jumped by over 17%, indicating renewed confidence from investors. However, there is still much to consider before investing in the tech giant.
Mark Zuckerberg's push towards virtual reality continues to drive the company, despite little success thus far. While Meta beat Wall Street revenue expectations by 2%, its 2022 revenue is still down by over 1% compared to 2021. The decline was even more pronounced in the fourth quarter of 2022, with a drop greater than 4%. Despite an increase in advertising revenue and app income, it was not enough to make up for the previous decline.
2022 and early 2023 has been a challenging time period for Meta, as well as other major tech companies. In Q2 2022, Meta reported its first-ever revenue decline, with a drop of 1%. This was followed by a decline of 4% in Q3 2022, netting a profit but still less than the same quarter in 2021. These back-to-back poor earnings resulted in a loss of $700 billion in market value between October 2021 and October 2022.
Zuckerberg continued to focus on VR, even as the company faced challenges. Between Q3 and Q4 2022, Meta's spending on Reality Labs, the group responsible for its metaverse projects, increased even further. Despite the increased spending, the revenue from these projects has declined year-over-year. The company expects its total expenses to be lower in 2023 but did not specify if this means a decrease in metaverse spending.
In November 2022, Zuckerberg reassured investors by stating that WhatsApp and Messenger would be the company's future focus for boosting income. However, the app revenue has yet to fully materialize. On a positive note, the money the company paid out to laid-off employees did not set it back much, as noted in the quarterly press release.