Meta Platforms has pleased Wall Street after Mark Zuckerberg promised a ‘year of efficiency’ in 2023, after Metaverse spending took a hefty toll on its 2022 profits.

Investors were also delighted when Meta announced a new $40 billion share buyback scheme that sent shares up nearly 19 percent in after-hours trading on Wednesday, which if it holds on Thursday, added more than $75 billion to its existing $401 billion market capitalisation.

It comes after a tough 2022 for Meta, after it contended with a post-pandemic slump in digital ads, coupled with heavy spending that unsettled some investors.

Profit hit

Indeed, Meta’s fourth quarter and year end results revealed that its cost and expenses in 2022 had risen 23 percent to $87.6bn, from $71.2bn in 2021.

Digging down into the financials, for the fourth quarter ending 31 December, Meta posted a net profit of $4.6bn, a 55 percent drop from the $10.3bn profit a year earlier.

Fourth quarter revenues also took a hit down 4 percent to $32.1bn from $33.7bn in the same year-ago quarter.

Full year results also displayed the heavy spending in 2022.

Net profit for 2022 fell 41 percent down to $23.2bn from $39.4bn in 2021.

Revenues fell 1 percent down to $116.6bn in 2022, from $117.9bn in 2021.

“Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” said Mark Zuckerberg, Meta founder and CEO.

“The progress we’re making on our AI discovery engine and Reels are major drivers of this,” said Zuckerberg. “Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organisation.”

Meta restructuring

Zuckerberg it should be remembered in November had announced that Meta was axing 13 percent of its workforce, or 11,000 staff, which should be completed by the end of Q1 2023.

Zuckerberg had reacted to concern about Meta’s heavy spending on the Metaverse, after investor pushback. Shareholder Altimeter Capital Management had urged Meta to streamline operations by cutting jobs.

In its third quarter results in October Meta share price had plummeted after it forecast that it would lose $10bn in ad revenue over full-year 2022 due to privacy changes by Apple that allow iPhone users to opt out of ad tracking across apps.

Facebook daily active users (DAUs) are sitting at 2 billion on average for December 2022, an increase of 4 percent year-over-year.

Meanwhile Facebook monthly active users (MAUs) were 2.96 billion as of 31 December 2022, an increase of 2 percent year-over-year.

Meta noted that Q4 ad impressions and price per ad increased by 23 percent year-over-year and the average price per ad decreased by 22 percent year-over-year.

For the full year 2022, ad impressions increased by 18 percent year-over-year and the average price per ad decreased by 16 percent year-over-year.