What drove META's earnings growth in 2024?

Meta Platforms (META) experienced significant earnings growth in 2024, driven by several key factors:

1. Revenue Growth: Meta's total revenue for 2024 reached $164.50 billion, marking a substantial 22% year-over-year increase compared to 2023. This growth was primarily driven by a 22% increase in advertising revenue, which accounted for the majority of the company's revenue.
2. Advertising Revenue: The Family of Apps (FoA) segment contributed $162.36 billion to total revenue, while Reality Labs (RL) added $2.15 billion. The increase in advertising revenue was attributed to an 11% rise in ad impressions and a 10% increase in the average price per ad. Ad impressions delivered across the Family of Apps increased by 6% year-over-year, and the average price per ad jumped by 14% in the reported quarter.
3. User Base Growth: Meta's Family of Apps now boasts an average of 3.35 billion daily active users in December 2024, a 5% increase from the same time the previous year. This growth was driven by its various platforms, especially Facebook, though Instagram's and Threads’ rise are noteworthy. In December, Threads hit 100+ million daily users.
4. Geographical Expansion: Geographically, revenues from the United States & Canada, Asia-Pacific, Europe, and the Rest of the World (RoW) surged 17.2%, 23.1%, 21.8%, and 28% on a year-over-year basis, respectively. This indicates a strong global performance and expansion of Meta's user base and revenue streams across different regions.
5. Investment in AI and Innovation: Meta's significant investment in AI, as evidenced by its massive USD 60–65 billion AI-focused capex plan for 2025, has positioned the company well for continued growth. The company's focus on AI-driven advertising and tools for brand-creator collaborations on Instagram is expected to further boost growth.

In summary, Meta's earnings growth in 2024 was driven by robust increases in advertising revenue, user base growth, and geographical expansion, coupled with strategic investments in AI and innovation.