Meta’s ad business remains a cash cow—but its Reality Labs division dropped the ball
Will a focus on AI and the metaverse pay off?
Meta crushed it in 2024, finishing the year super strong, with its ads business doing exceptionally well, its social media apps booming, and the company making some big moves in AI, VR and AR.
Let's look at the insane numbers: Last year's fourth-quarter revenue was up a massive 21% to $48.4 billion, and for the whole year, it was up 22% to $164.5 billion. The profit picture is even better with fourth-quarter net income jumping 49% to $20.8 billion – and for the year, it was up a whopping 59% to $62.4 billion. That meant earnings per share rose to $8.02.
Its ad business is still the money maker, with ad prices up 14% and ad views up 6%. Zuckerberg says it's all thanks to AI and Meta's Family of Apps – which attracted 3.35 billion active people on Facebook, Instagram, and WhatsApp combined every day in December 2024, a 5% increase from 2023.
But it's not all sunshine and rainbows. Its Reality Labs division, which focuses on virtual and augmented reality, lost $5 billion in the fourth quarter and only made $1.1 billion. Plus it didn't help that the division suffered some layoffs recently.
Looking forward, Meta thinks it'll bring in between $39.5 billion and $41.8 billion in the first quarter of 2025. How it plans to do that is to go all-in on AI, with a $65 billion bet in 2025. But all this investment would mean that its expenses will be going up too, projected to be between $114 billion and $119 billion, compared to $95 billion in 2024.
And with the fierce competition, especially from Chinese AI startup, DeepSeek, which is shaking things up with its cheap AI models, it remains to be seen whether or not Meta's huge bet on AI and the metaverse would pay off.
Oyinebiladou Omemu
