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Meta earnings: Stock spikes after better-than-expected revenue, buyback announcement

Meta (META) reported its Q4 2022 earnings today after the bell, and the Facebook parent beat key revenue expectations and growing losses on its metaverse operation. It also announced a $40 billion stock buyback plan.

Here's what the key numbers looked like, as compared to analysts' estimates compiled by Bloomberg.

Q4 Revenue – $32.17 billion actual versus $31.65 billion expected

Advertising Revenue – $31.25 billion actual versus $30.86 billion expected

Adjusted Earnings Per Share (EPS) – $1.76 actual versus $2.26 expected

Facebook Daily Active Users (DAUs) – 2 billion actual versus 1.98 billion expected

Family of Apps Daily Active Users (DAUs) – 2.96 billion actual versus 2.92 billion expected

Reality Labs Operating Loss – -$4.28 billion actual versus -$3.99 billion expected

The company's stock bumped about 14% in after-hours trading.

Good headline numbers aside, there's a lot to question about Meta's results today, as its metaverse division Reality Labs clocked a larger-than-expected loss of -$4.28 billion, more than $200 million more than Wall Street expected.

Perhaps more than surpassing revenue expectations, Meta has successfully cut costs.

"We anticipate our full-year 2023 total expenses will be in the range of $89-95 billion, lowered from our prior outlook of $94-$100 billion due to slower anticipated growth in payroll expenses and cost of revenue," Meta CFO Susan Li said in a statement.

The company's in hot pursuit of efficiency, and appears to have been ruthless in its cost-cutting efforts.

"We expect capital expenditures to be in the range of $30-33 billion, lowered from our prior estimate of $34-37 billion,” Li’s statement continues. “The reduced outlook reflects our updated plans for lower data center construction spend in 2023 as we shift to a new data center architecture that is more cost efficient and can support both AI and non-AI workloads.”

Meta's buyback was a strong move, given that the company laid off 11,000 workers in November and more jobs are reportedly on the table even now. Moreover, the company's C-suite re-shuffled substantially through last year, with longtime COO Sheryl Sandberg officially leaving the company in September.

Meta Platforms Chief Executive Mark Zuckerberg leaves federal court after attending the Facebook parent company's defense of its acquisition of virtual reality app developer Within Inc., in San Jose, California, U.S. December 20, 2022.  REUTERS/Laure Andrillon
Meta Platforms Chief Executive Mark Zuckerberg leaves federal court after attending the Facebook parent company's defense of its acquisition of virtual reality app developer Within Inc., in San Jose, California, U.S. December 20, 2022. REUTERS/Laure Andrillon (Laure Andrillon / reuters)

Meta's got a lot of moving parts

Still, on the face of it, these numbers offer up a better-than-expected close out to what's been an exceptionally difficult year for Meta, which also owns Instagram and WhatsApp. In 2022, the company's stock declined approximately 63%, as the company battled macroeconomic headwinds and a slow ad market.

All in all, it's been a solid day for Meta, which reportedly won its case against the Federal Trade Commission (FTC) this morning, getting the green light to buy VR developer Within. Meta's proposed acquisition of Within, which makes popular VR app Supernatural, has been in the works since October 2021. However, they're not out of the woods yet. The FTC, going forward, could appeal and will likely continue to scrutinize Meta's future deals under Chair Lina Khan.

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.

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