Meta Continues to Focus on AR, VR Build-Outs

I’m publishing this series to discuss a topic that I follow closely - cloud stocks, trends, strategy, acquisitions, and more. Please subscribe to my Cloud Stock Analysis series and never miss an article. I like fundamentals-focused business building, and teach the principles of fundamentals-focused business building at 1Mby1M.?Learn what to expect from 1Mby1M .

Earlier this week, Meta (Nasdaq: META)?announced its fourth quarter results that finally reported a quarter better than what the market had predicted. It continues to focus on building on its emerging technologies of Metaverse along with augmented reality (AR) and virtual reality (VR).

Facebook’s Financials

Facebook’s Q4 revenues fell 4% over the year to $32.17 billion, ahead of the market’s estimates of $31.53 billion. Adjusted EPS was $1.76 against the market’s forecast of $1.89.

Average Family Daily Active People grew 5% over the year to 2.96 billion for December 2022. Family monthly active people (MAP) grew 4% to 3.74 billion as of 31 December, 2022. Daily Active Users (DAUs) grew 4% to 2 billion and monthly active users (MAUs) grew 2% to 2.96 billion.

Ad impressions delivered across its Family of Apps increased by 23% over the year and the average price per ad fell by 22% over the year. Facebook’s annual revenues fell 1% to $116.61 billion and EPS was $8.59 for the full fiscal year.

Facebook has also reported plans to restructure. It is taking a $4.2 billion restructuring charge for the fourth quarter. The charge includes costs for the early termination of some office-space leases, redesigns of some data center projects, and severance for employees who were laid off last year. It expects another $1 billion in restructuring costs in 2023.

For the first quarter, Facebook expects revenues to be in the range of $26-$28.5 billion, compared with the $27.18 billion average analyst estimate.

Facebook’s Growth Plans

Recently, Meta announced a new Instagram update called Notes that equips users with a new way to share thoughts and see what their friends are up to. Notes allows users to post something up to 60 characters and have it appear at the top of the inbox for 24 hours. It also announced Group Profiles to allow people to create and join a profile to share posts and stories in a dedicated, shared profile with friends. It will only be shared to group members instead of followers and will be posted on the Group Profile instead of an individual profile. Meta is also testing a new way for people to connect with friends over shared interests by saving posts to a collaborative collection in a group or 1:1 DMs.

Meta announced the creation of a free open source software tool to help tackle terrorist and violent extremist content online that allows platforms to identify copies of images or videos and take action against them by the masses.

Meta continues to focus on its AR and VR segments. Recently, it introduced Mixed Reality. Mixed Reality is the Meta’s mixed reality solution. Its custom-built optical stack, Infinite Display, will continue to be improved in the later generations of its VR headsets. Meta believes that for its VR headsets to work properly, they need to understand the user’s room as a 3D space and recognize the surfaces and objects around the user and how they can interact with digital objects. Technologies like Spatial Anchors for allowing virtual things to occupy fixed spaces in the physical world and Scene Understanding for reconstructing physical spaces virtually are being developed and deployed in the headsets . It is also improving the eye and face tracking features that will allow people’s digital selves to more closely match their real-world facial expressions. This is expected to improve the quality of communication, expression, and connection in virtual spaces for digital avatars.

Its stock is trading at $195.62 with a market capitalization of $507.7 billion. It hit a 52-week high of $248.00 in January last year and fell to a 52-week low of $88.09 in October last year.?

Disclosure:?All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.

Looking For Some Hands-On Advice?

For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online?1Mby1M Roundtables , held almost every week. You can also check out our free?Bootstrapping Course , our?Udemy courses ,?YouTube channel ,?podcast interviews ?with VCs and Founders, and, to?follow my writings, click "Follow" from?here .

Photo Credit:?Marco Pak?eningrat /Flickr.com