Meta lowers Capex as it aims to cut data center spend

Meta Platforms has lowered its capital expenditures (Capex) to $30-33 billion for 2023 from its prior estimate of $34-37 billion.
Meta capital expenditure in 2022
The reduced outlook in Capex reflects its updated plans for lower data center construction spend in 2023 as it shifts to a new data center architecture that is more cost efficient and can support both AI and non-AI workloads, Meta Platforms said in its earnings report.

Meta Platforms is planning total expenses of $89-95 billion against prior outlook of $94-100 billion due to slower growth in payroll expenses and cost of revenue.

Meta Platforms expects to record $1 billion in restructuring charges in 2023 related to consolidating its office facilities footprint.

Meta Platforms is targeting first quarter 2023 revenue of $26-28.5 billion.
Facebook ARPU 2022Meta Platforms reported net income of $23.2 billion (–41 percent) on revenue of $116.609 billion (–1 percent) in 2022. In Q4, Meta Platforms posted net income of $4.652 billion (–55 percent) on revenue of $32.165 billion (–4 percent).

The parent of Instagram and Facebook is focused on improving its content recommendations powered by artificial intelligence and its ad targeting systems to keep users clicking.

CEO Mark Zuckerberg described the focus on efficiency as part of the natural evolution of the company, calling it a phase change for an organization.

Meta in November cut more than 11,000 jobs.

“Our management theme for 2023 is the Year of Efficiency and we’re focused on becoming a stronger and more nimble organization,” Mark Zuckerberg said in a statement.

Monetization efficiency for Reels on Facebook, a short-form video format, had doubled in the past six months and the business was on track to roughly break even by the end of 2023 or early 2024 and grow profitably after that, he said on the conference call.

Executives said Meta’s investments in AI-surfaced content and TikTok competitor Reels were starting to pay off. The company also has been using AI to increase automation for advertisers and target ads using less personal data, resulting in higher return on ad spend.

Meta’s daily active user base rose 5 percent to 2.96 billion in 2022. Monthly active user base rose 4 percent to 3.74 billion as of December 31, 2022.

Facebook has daily active user base of 2 billion and monthly active user base of 2.96 billion in December 31, 2022.

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