Meta reports a drop in shares, increase in ad revenue in Q4 report

Meta shares dropped as much as a 23% in after-hours trading following the release of their Q4 2021 financial report.

The rare fall in results is believed to be due to the company’s spending on their Metaverse and dealing with advertising challenges on its services, CNN reported.

In their Q4 report, the tech giant - which is the parent company of Facebook, Instagram and WhatsApp - reported a net income of almost A$14.45 billion (US$10.29 billion), compared to December 2020 results of A$15.7 billion (US$11.21 billion)

Meta recorded a climb in advertising revenue in its recently released Q4 2021 financial report.

The company reported ad revenue of A$45.4 billion (US$32.64 billion) for its Family of Apps, an increase of 15.6% in the three months to the end of December.

Ad impressions across the core social apps also increased by 13% year-over-year and the average price per ad increased by 6% year-over-year.

For the full year for 2021, ad impressions increased by 10% year-on-year and the average price per ad increased by 24% year-on-year.

Meta’s Q4 revenue climbed up 20% year-on-year to A$47.31 billion (US$33.67 billion), while the net income was A$47.31 billion (US$33.67 billion).

Overall, Meta’s Q4 2021 revenue climbed to US$33.67 billion (A$47.31 billion), up 20% year-on-year. Net income came to US$10.29 billion (A$14.45 billion).

In their report, Meta said they expect the total revenue of the first quarter of 2022 to be in the range of $27 to $29 billion, “which represents 3-11% year-over-year growth.”

“We expect our year-over-year growth in the first quarter to be impacted by headwinds to both impression and price growth,” the report added.

In terms of impressions, the company expects from both “increased competition for people’s time and a shift of engagement” in the apps towards video surfaces like Reels that monetise lower rates than Feed and Stories.

Meanwhile in terms of pricing, the tech giant expects growth to be negatively impact by an update to Apple iOS privacy changes, macroeconomic challenges like cost inflation and supply chain disruptions are impacting advertiser budgets, and foreign currency growth.

Meta founder and CEO Mark Zuckerberg said: "We had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow.’ 

“I'm encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we'll continue investing in these and other key priorities in 2022 as we work towards building the metaverse,” he added