After the US stock market opened on Wednesday$Meta Platforms (META.US)$Announced the fourth quarter and annual results of 2022. The financial report shows that:

• The company's fourth-quarter revenue was $32.165 billion, down 4% from a year earlier, the third consecutive quarter of decline, but better than Wall Street expected. Analysts had widely expected Q4 revenue to fall 7 per cent year-on-year to $31.65 billion.

• Fourth-quarter net profit was $4.7 billion, down 55% from a year earlier, but higher than in the third quarter. It was the first time in a decade that Meta had suffered three consecutive quarter-on-quarter declines in profits. Analysts surveyed by FactSet had expected $6 billion.

• Fourth-quarter diluted earnings per share (EPS) was $1.76, down 52 per cent from a year earlier, while analysts expected $2.22, up 7.3 per cent from a month earlier and down 49 per cent in the third quarter from a year earlier.

However, some media analysts said that the lower-than-expected net income and earnings per share were caused by expenses related to the restructuring and layoffs of the company. On the whole, the financial report was still better than expected. Under the tone of the return of the wind, the market gave full recognition to Meta, which reported results, which closed up nearly 3% on Wednesday and surged more than 20% in after-hours trading.

As of press time, Meta was still up nearly 19% before Thursday's trading.

Last year, the macroeconomic downturn, Apple Inc's privacy policy to crack down on advertising business, short video trend eroding the market, meta universe has been repeatedly questioned, many negative effects once hammered Meta to the bottom, the share price was halved last year. Today, Meta has recovered more than 70% of its blood from the bottom, and the rebound momentum does not seem to have abated. In this financial report and performance conference, several key factors also reveal the good development prospects of the company.

1. Take advantage of artificial intelligence to build Facebook Inc's trump card.

In the fourth quarter of last year, Meta's core social platform, Facebook, had 2 billion daily active users (DAUs), slightly better than expected, and monthly active users (MAUs) were 2.96 billion, slightly lower than expected of 2.98 billion.

Among them, Facebook Inc's daily active users in the United States and Canada increased to 199 million from 197 million in the previous two quarters, and the number of daily active users in Europe increased from 303 million in the third quarter to 304 million.

Happily, this is the first time that Facebook Inc has broken through the threshold of 2 billion DAU. This not only has the symbolic significance of a milestone, but also the result of Meta's efforts to show the recovery in the context of low advertising demand and fierce market volume.

This achievement is attributed by the management to the application of artificial intelligence. Previously, in order to compete with TikTok and make up for the loss of revenue caused by Apple Inc's policy changesMeta has been investing heavily in artificial intelligence tools to improve its advertising system and provide better recommendations to users of its short video function Reels.

According to the media, Zuckerberg said in a workplace forum that the company is building AI tools similar to ChatGPT, which will use Meta's code base to help engineers with basic coding.

2. Stop uncontrolled growth: Zuckerberg emphasizes the "year of efficiency"

In June 2021, the market capitalization of Facebook Inc, who has not yet changed his name Meta, exceeded 1 trillion US dollars for the first time, joining the "trillion Club" and successfully standing at the top of the mountain.

However, after the massive expansion and the unbridled consumption of money in meta-universe, the once steadily growing Meta began to suffer a fierce blow, investors questioned and left one after another, and CEO Zuckerberg was accused of "dragging down Meta".

This time, Zuckerberg said bluntly that the theme for 2023 is "Year of Efficiency". Everywhere there is a signal of cost reduction and a hint of a more cautious investment in meta-cosmos.

First of all, the pace of layoffs has not been relaxed. Zuckerberg said in a conference call that the company's focus is on improving efficiency and eliminating middle management. In addition, Meta will be "more proactive in cutting back on projects that underperform or may no longer be so important".

The company laid off 13% of its employees in its first large-scale layoffs last year, consolidated offices and streamlined its data center, Meta's chief financial officer, Susan Li, said it was "just the beginning" and that the company was still "fully reviewing hiring needs."

The reduction in capital expenditure also satisfied the market. Meta expects first-quarter revenue to be between 26 and 28.5 billion, with a midpoint of $27.25 billion, slightly higher than analysts' expectations of $27.1 billion. Full-year cost forecasts have also been revised downwards, with costs expected to be between 94 billion and 100 billion in 2023, but the new report has been revised to between 890 and 95 billion, down about 5 per cent overall.

The analysis believes that without affecting the recovery of the advertising business, Meta has taken cost optimization measures this time, which will make investors have confidence in the company's cash flow and offset the negative impact of meta-universe's crazy money consumption to a certain extent.

3. Heroic buyback: the share buyback plan increases by $40 billion.

What excites investors most this time is the $40 billion buyback plan announced by the company. In 2022, Meta spent nearly $28 billion on its stock, leaving a repurchase quota of nearly $11 billion. However, the company's board of directors aggressively increased the share buyback quota to $40 billion.

The better-than-expected report also received a lot of praise from Wall Street. "Meta is regaining its magic," said Colin Sebastian, an analyst at Baird Equity Research. The analyst believes thatCompared with Snap Inc's dismal results, Meta looks particularly reliable in terms of performance and guidance, while further cuts in operating and capital expenditures and buyback plans are the biggest surprises.

Lloyd Volmsley, an analyst at UBS, said he expected Meta to achieve double-digit revenue growth by 2023, with strong growth in earnings and free cash flow.

Admittedly, the slowdown in advertising and the bottleneck of meta-universe are still the sword of Damocles hanging over Meta. Business transformation and breakthroughs in new technologies are destined to be a long-term process, and Zuckerberg sees meta-universe as a business that needs decades of hard work. For Meta, the most dangerous moment may be over, and future growth needs to be catalyzed by more positive factors.

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