Meta Platforms Inc’s stricter cost controls this year and a new $40bn share buyback sent shares soaring on Wednesday, as CEO Mark Zuckerberg called 2023 the “Year of Efficiency”.

The parent of Instagram and Facebook cut its cost outlook for 2023 by $5bn and projected first-quarter sales that could beat Wall Street estimates. It said its investments in AI-surfaced content and TikTok short video competitor Reels were starting to pay off.

The company forecasted first-quarter revenue between $26bn and $28.5bn, compared with analysts’ average estimates of $27.14bn, according to IBES data from Refinitiv.

Meta stock was up 18.3 percent in after-hours trade. Shares of peer Alphabet Inc were up 3.3 percent and Snap Inc stock rose by 1 percent.

Digital advertisement giant Meta faced a brutal 2022 as companies cut back on marketing spending, while rivals like TikTok captured younger users and Apple Inc’s privacy updates continued to challenge the business of placing targeted ads.

Its forecast suggests the advertising market may be recovering as companies increase their marketing budgets after a long pause due to macroeconomic uncertainties.

"Meta’s better-than-feared results should refute concerns over the state of the digital advertising industry following Snap’s horrible guidance earlier this week,” said Jesse Cohen, senior analyst at Investing.com.

“Despite all the challenges Meta must deal with, there are signs the business is still doing well,” he said.

Net income for the fourth quarter ended December 31, however, fell to $4.65bn, or $1.76 per share, compared with $10.29bn, or $3.67 per share, a year earlier.

The decline was largely due to a $4.2bn charge related to cost-cutting moves such as layoffs, office closures and an overhaul of the company’s data centre strategy.

The company reported adjusted earnings of $1.76 per share, missing the average analysts’ estimate of $2.22 per share.

Last year in November, the Facebook parent announced it would cut 13 percent of its staff, or more than 11,000 employees, as it battled soaring costs and a weak advertising market, Al Jazeera reports.