Meta posts robust fourth-quarter earnings amid DeepSeek mania | Meta

After an unprecedented delay, Meta reported earnings more than half an hour after market close on Wednesday. The company posted $48.39bn in fourth-quarter revenue and and earnings per share of $8.02, handily beating Wall Street projections of $46.9bn and $6.75 in earnings-per-share.

“We continue to make good progress on AI, glasses and the future of social media,” said Mark Zuckerberg, Meta founder and CEO. “I’m excited to see these efforts scale further in 2025.” The day before, an internal memo leaked that said Meta’s Reality Labs division, which oversees its Meta Ray Bans smart glasses, had grown by nearly 40% and beaten all its sales and revenue targets.

“This is going to be a really big year,” Zuckerberg said on the call with analysts. “More than usual, it feels like the trajectory for most of our long term initiatives are going to be a lot clearer by the end of this year.”

Earnings were preceded by a Wall Street Journal report that Donald Trump signed an agreement to call on Meta to pay $25m to settle a lawsuit he filed against the company in 2021. Trump filed the lawsuit after Facebook banned him from the platform following the January 6 Capitol attacks. It’s unclear if that’s what led to the delay in reporting earnings.

The company is not providing full year revenue outlook for 2025 but expects “first quarter 2025 total revenue to be in the range of $39.5-41.8 billion,” according to a press release. That projection is less than what analysts were expecting for the first quarter, which analyst Debra Aho Williamson, founder and chief analyst of Sonata Insights, said is “concerning”.

“Meta’s solid revenue growth in the fourth quarter masks a looming problem,” said Williamson. “Its revenue outlook for Q1 was lighter than Wall Street was expecting, and it is planning exorbitant capital expenditures for AI infrastructure in 2025. That adds up to a concerning situation.”

Analysts will probably ask about Mark Zuckerberg’s plans to spend between $60bn and $65bn on AI infrastructure in 2025. That is up from the $50bn the CEO said he expected to spend at the end of last quarter. But as Meta faces increased competition, especially from new player DeepSeek AI, the company is ramping up its AI efforts.

Earlier this week, Meta announced it was rolling out a more personalized AI assistant. The tech giant also maintains that Meta AI is the most used virtual assistant, though it is difficult to avoid using it on platforms such as Instagram and WhatsApp by design.

Some analysts remain bullish about Meta’s AI capabilities despite the overnight success of Chinese competitor DeepSeek.

“DeepSeek is a great LLM model that is competitive with Meta’s Llama and OpenAI’s ChatGPT … the comparisons end there, as tonight we expect a doubling down on the AI vision/build-out from both tech stalwarts Meta and MSFT which will be another strong sign of confidence this AI Revolution is just starting,” said Dan Ives of Wedbush Securities. Microsoft reported its quarterly earnings the same day as Meta.

Other analysts expect AI will take a back seat to concerns over Zuckerberg’s decision to get rid of third-party factchecking programs.

“Expect a more defensive tone during Meta’s Q4 earnings call, especially during the Q&A as questions abound about the company shuttering its third-party factcheckers,” said the Forrester VP research director, Mike Proulx. “Meta’s typical AI progress update will get overshadowed by analyst concerns about advertiser brand safety and user backlash.”

On the earnings call, Zuckerberg said this was going to be a big year “for redefining our relationship with governments. “We have a US administration that is proud of our leading companies, prioritizes American technology winning, that will defend our values and interests abroad,” he said. “I’m optimistic about the progress and innovation it’s going to unlock.”

Days after Meta announced it was doing away with its third-party factchecker program, news broke that the company would reduce its workforce by 5% – this time targeting what it called “low performers”.

“Despite a rather frenzied start to 2025, Meta’s Q4, 2024 results will likely demonstrate continued company momentum heading into this year,” Proulx said. “With yet another 5% reduction in workforce announced, Meta’s 2024 ‘year of efficiency’ gets trumped in 2025 with an apparent year of ‘intensity’.”

Zuckerberg said he is also watching to see whether TikTok gets banned – which could provide a windfall for Meta products. He said that regardless of what happens he expects Reel to continue to grow on Instagram and Facebook.

Zuckerberg is also expected to be asked about Reality Labs, where there has been a reported leadership shake-up. Reality Labs will be brought closer to the main business and be led by Meta’s COO, Javier Olivan, according to the Information. It is unclear if Reality Labs’ current COO, Dan Reed, will remain at the company.