While most of the other Mega-Cap tech giants were hit hard this week, META stock was largely unaffected by DeepSeek’s announcement, in part because it offered some validation for the company’s open-source AI strategy.
In fact the shares reached an all-time high intraday yesterday ahead of tonight’s earnings and right before the earnings were released (later than expected), The Wall Street Journal reports that Meta has settled its lawsuit with President Trump for $25 million.
President Trump has signed settlement papers that are expected to require Meta Platforms to pay roughly $25 million to resolve a 2021 lawsuit Trump brought after the company suspended his accounts following the attacks on the U.S. Capitol that year, according to people familiar with the agreement.
Of that, $22 million will go toward a fund for Trump’s presidential library, with the rest going to legal fees and the other plaintiffs who signed onto the case. Meta won’t admit wrongdoing, the people said. Trump signed the settlement agreement Wednesday in the Oval Office.
The latest Meta (or Facebook) has ever posted earnings before today was 1616ET.
Today’s print hit at 1640ET and it was a doozy with top- and bottom-line beats:
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*META 4Q REV. $48.39B, EST. $46.98B
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*META 4Q EPS $8.02, EST. $6.78
Daily active people, which you will remember includes the number of users across Facebook, Instagram, Messenger and WhatsApp, was 3.35 billion on average in December. The estimate was 3.28 billion… so another decent beat there…
BUT… weak guidance and refusal to provide full year 2025 revenue outlook:
- *META SEES 1Q REV. $39.5B TO $41.8B, EST. $41.67B
On the positive side, as had already been previewed, Meta raised its CapEx outlook:
- *META SEES 2025 CAPEX $60B TO $65B, EST. $52.41B
But sees total expenses considerably higher than expected…
- *META SEES 2025 TOTAL EXPENSES $114B TO $119B, EST. $108.01B
While META had missed CapEx forecasts dramatically for the last two quarters, Q4 2024 saw CapEx catching up notably…
META shares are flying around all the place after the print, unchanged for now (holding on to post-DeepSeek rebound gains)…
“We continue to make good progress on AI, glasses, and the future of social media,” Chief Executive Mark Zuckerberg said in a statement.
A little warning about regulation from Meta’s CFO in the release here:
“In addition, we continue to monitor an active regulatory landscape, including legal and regulatory headwinds in the EU and the US that could significantly impact our business and our financial results.”
Reality Labs sales in Q4 were almost the same as they were a year earlier: $1.08 billion in the last quarter of 2024 compared to $1.07 billion in that period of 2023.
For the full year, Reality Labs revenue was up 13% in 2024.
But, on the other side of the coin here, Reality Labs losses were also wider in 2024.
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2024 Q4 losses: ($4.97 billion)
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2024 full year losses: ($17.73 billion)
So this is a business unit that is still nowhere near break-even at the moment.
Will that CapEx hike really stick after the DeepSeek headlines?
credittrader
Wed, 01/29/2025 – 16:52
