In December, the daily number of Facebook users reached a record average of two billion, which is nearly a quarter of the world’s population.
The growth was higher than anticipated, bringing a new wave of confidence to the company, which has been struggling with rising costs and a decline in advertising revenue.
The parent company, Meta, experienced a 15% surge in after-hours trading as CEO Mark Zuckerberg declared 2023 as the “year of efficiency” and announced his focus on cost cuts.
“We’re in a different environment now,” Zuckerberg said, referencing the company’s declining revenue for the first time in its history after years of double-digit growth.
“We don’t anticipate that that’s going to continue, but I also don’t think it’s going to go back to the way it was before.”
Meta, which also owns Instagram and WhatsApp, underwent a significant restructuring in 2022, including reducing office space and cutting 11,000 jobs, about 13% of staff.
These moves cost Meta $4.6 billion and resulted in a decline in profits, although the company still generated $23.2 billion in profit for the year.
We’re in a different environment now … I don’t think it’s going to go back to the way it was before.
In the last quarter of 2022, Meta reported revenue of $32.2 billion, down 4% from the previous year, which was better than most analysts had predicted.
Last year, Meta had alarmed investors by posting the first decline in daily Facebook users and focusing investments on virtual reality, also known as the metaverse.
However, in December, the daily number of Facebook users increased by 4% compared to the previous year, including growth in Europe, the US, and Canada. The number of active users across all Meta apps was up 5% year-on-year.
Zuckerberg noted the company’s progress with its video product, Reels, as they compete with TikTok and other rivals. He stated that their efforts in this area are starting to pay off and ad revenue is following users to the videos.
Investors were encouraged by the company’s forecast of lower costs and stronger sales in the coming months, leading to a rise in shares.
Meta also announced an additional $40 billion investment in buying back shares, which had dropped sharply the previous year due to investor concerns about the company’s direction.