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In a year that could not have been less ordinary for Meta Holdings, continued strong financial momentum was the one hint of normalcy.
The company posted revenue of $33.671 billion in the fourth quarter of 2021, up 20% from the same quarter in 2020, and revenue for the full year of $117.929 billion was up 37% compared with 2020.
Net income slipped 8% year over year in the fourth quarter, to $10.285 billion, as Meta began investing in hiring and technology to fulfill its mission of helping to build out the metaverse. Full-year net income of $39.37 billion was up 35% from 2020.
There was no slowing the revenue train despite a tumultuous 2021 that included a damaging leak of internal documents, the departure of several key executives, jarring privacy changes to Apple’s iOS operating system, federal and state antitrust lawsuits and a refocusing of the company on the metaverse, highlighted by its name change from Facebook to Meta last October.
Insider Intelligence principal analyst Debra Aho Williamson said in a statement, “We saw growth driven by increased holiday ad spending, as well as positive sentiment about the economy prior to the rise of omicron. In addition, Meta’s two main ad platforms, Facebook and Instagram, are still at the top of the list for most advertisers when they consider where to put digital ad dollars.”
Chief financial officer David Wehner projected 2022 capital expenditures of $29 billion to $34 billion, primarily driven by investments in data centers, servers, network infrastructure and office facilities, and he said of artificial intelligence and machine learning investments, “While our Reality Labs products and services may require more infrastructure capacity in the future, they do not require substantial capacity today and, as a result, are not a significant driver of 2022 capital expenditures.”
The fourth quarter of 2021 marked the first reporting period for which Meta reported its financial results based on two reportable segments: Family of Apps, which includes Facebook, Instagram, Messenger, WhatsApp and other services; and Reality Labs, which includes augmented and virtual reality consumer hardware, content and software.
Revenue for the Family of Apps segment was $32.794 billion for the quarter and $115.655 billion for the full year, while those figures for Reality Labs were $877 million and $2.274 billion, respectively.
Meta reported an average of 3.59 billion monthly active people for its Family of Apps, up 9% year over year, and 2.82 billion daily active people, up 8%.
For the Facebook app specifically, monthly active users averaged 2.91 billion as of Dec. 31, 2021, up 4% versus the same time one year earlier, and daily active users of 1.93 billion were up 5% year over year.
Ad impressions delivered across the company’s Family of Apps rose 13% year over year for the fourth quarter and 10% for the full year, while its average price per ad was up 6% for the quarter and 24% for the full year.
Looking forward to 2022, Wehner said Meta expects continued headwinds from increased competition for people’s time to affect impressions, along with a shift of engagements within Meta’s Family of Apps toward video surfaces such as Reels, which monetize at lower rates than News Feed and Stories.
He also foresaw a negative impact on pricing for this year, driven by comparisons with a period when Apple’s iOS changes had not yet taken effect, as well as the impact of cost inflation and supply-chain disruptions on advertisers’ budgets, and headwinds caused by currency exchange rates.
“It’s clear that there are many big roadblocks ahead as Meta faces tough new competition for ad revenue, such as TikTok, and as it contends with ongoing ad targeting and measurement challenges from Apple’s iOS changes,” Williamson cautioned. In addition, there’s a lot of uncertainty about Meta’s investments in the metaverse and if or when they will have a positive impact on the company’s bottom line. While we expect Meta to ramp up testing ads and commerce within its metaverse offerings this year, those efforts will be highly experimental and not likely to drive much revenue in the near term.”
Chris Apaliski, senior director of paid social at performance marketing agency Adlucent, was not as concerned about the impact of the iOS changes, telling Adweek, “From an advertiser’s point of view, the Integration of tools like Facebook’s conversions API (application-programming interface) and other integrations with the marketing API have enabled them to start diving back into their data from a different lens after viewing any iOS 14+ implications. Facebook has taken a very active approach with advertisers to discuss changes and potential solutions to adapt to privacy changes, which has helped drive more trust back into the platform, albeit making life a little harder for marketers and advertisers.”
Wehner projected revenue for the first quarter of 2022 of $27 billion to $29 billion, which would represent year-over-year growth of between 3% and 11%.
Meta reported headcount of 71,970 as of Dec. 31, 2021, up 23% from Dec. 31, 2020.
Brad Copeland, vice president at commerce technology company Productsup, was more optimistic about the move to the metaverse, saying in an email, “Despite the time it will take to grow revenue among its own AR/VR division, the company’s metaverse-first strategy has created unavoidable noise among nearly every industry. Indirectly, Meta has presented brands of all sizes with the opportunity to engage and reconnect with customers across generations through new initiatives like NFTs (non-fungible tokens)—something marketers have struggled to achieve for years prior, especially in the height of the pandemic.”
But Haris Anwar, senior analyst at financial platform and news site Investing.com, cautioned, “Certain companies are dealing with the supply-chain disruptions and Apple’s privacy changes much better than others. Alphabet is certainly one such example, where strong earnings momentum continues to show the resilience of its platform. With there not seeming to be any imminent end in sight to this current environment, investors will continue to move to the sidelines, creating a tricky path for Meta to navigate.”
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