Meta has declared its first-ever dividend, the announcement, accompanied by financial results, has sent Meta’s shares soaring over 14%, over $140 billion to its market valuation. This comes just days ahead of Facebook’s 20th anniversary.
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Meta’s fourth-quarter financials exceeded expectations, with revenue surging by 25% to $40.1 billion and net income skyrocketing over 200% to $14 billion.
The company’s earnings per share stood at $5.33, surpassing analysts’ estimates of $4.97. This performance, driven by strong holiday ad sales, has contributed to the recovery of Meta’s shares, which had faced a downturn in 2022.
Meta has declared a dividend of 50 cents per share, making it the first among its internet contemporaries to initiate a dividend payout.
This move is complemented by the authorization of an additional $50 billion in share repurchases. The dividend, payable on a quarterly basis, shows Meta returning value to its shareholders.
Meta’s CEO, Mark Zuckerberg, who owns about 350 million shares, could receive approximately $175 million each quarter through this dividend policy.
Following the dividend announcement, Meta’s shares surged over 14%, reaching new all-time highs. The post-market rally adds to Meta’s performance, with its market capitalization almost tripling in 2023.
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Investors have responded positively to the company’s decisions. Meta’s financial success is contributed in part to its Year of Efficiency strategy, implemented in 2023.
This initiative involved cost-cutting measures, including layoffs and spending reductions, planned at reversing the previous year’s revenue declines.
The strategy has proven effective, with Meta reporting a 69% year-over-year growth in profits for the full year 2023, totaling $39 billion.
Meta remains committed to its investments in the metaverse and artificial intelligence (AI). CEO Mark Zuckerberg has declared AI as Meta’s primary investment area for 2024, with plans to build its own artificial general intelligence (AGI). The company expects capital expenditures of $30 billion to $37 billion.
Despite operating losses of over $16 billion in its Reality Labs unit in 2023, Meta continues to invest heavily in augmented and virtual reality.
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The success of the latest version of Ray-Ban smart glasses, featuring a built-in AI assistant, shows Meta’s determination to lead in the technologies. The metaverse-oriented Reality Labs division reported record sales of $1.1 billion in the fourth quarter.
The financial announcements come just a day after CEO Mark Zuckerberg appeared before the US Senate to address concerns about the impact of Meta’s platforms on young users.
During the hearing, Zuckerberg issued an apology to parents of children who had experienced harm on Facebook and Instagram.
CEO Mark Zuckerberg declared that artificial intelligence would be Meta’s biggest investment area in 2024.
The company’s updated outlook reveals plans to allocate between $30 billion and $37 billion in capital expenditures for the year, with a focus on investments in AI and non-AI servers and data centers.
Meta expects that its long-term AI research and product development efforts will require growing infrastructure investments beyond 2024.
Amazon and Alphabet, which have not paid dividends to date. Microsoft issued its first dividend in 2003, and Oracle initiated its dividend program in 2009.
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