Meta had an abysmal 2022. The value of its stock fell by 65 percent year over year, it laid off 11,000 people, and employee morale has suffered.

There are signs things are turning around, though: Earlier this month, the company reported stronger-than-expected Q4 earnings and saw its stock price jump by more than 20 percent in a single day. While almost every other major tech company is continuing to struggle and has also laid off thousands from their workforces, none has seen a stock market rebound anywhere close to Meta’s.

That progress could be overstated and the company isn’t out of the woods just yet, according to an internal memo from one of the company’s top executives that Recode obtained. Meta still faces major business challenges, including Apple limiting its advertising business, TikTok’s rising popularity, and its brand sentiment with users in the US.

Meta declined to comment.

In the note, which Meta Chief Marketing Officer Alex Schultz posted on Meta’s internal employee message board, Workplace, in early February, he cautioned employees to contain their excitement. “We have to keep our eyes on the horizon and not focus on the reaction of the street and our stock price,” he wrote. “I believe in this company … but we’re still early in this turnaround, not everything will pan out.”

Schultz wrote that Meta is still “at the whim of Apple,” referencing the new privacy feature that the iPhone maker introduced in 2021 that limited the amount of data Meta can collect about many mobile users, making it harder for the company to target ads — which is a key part of its business model. Last February, Meta said the change would cost the company $10 billion in lost revenue a year — around as much as the company is spending annually on its metaverse ambitions. Since Apple made the change, Facebook had been using AI to recoup those losses and better target ads without Apple’s help. One approach, according to the Wall Street Journal, has been “bargaining with users” to get them to agree to tracking in exchange for seeing fewer ads. These efforts are still early, though, and Schultz’s memo reflects the continued power that Apple, as the gatekeeper of the iPhone App Store, still holds over Facebook and Instagram.

The executive also tempered expectations around Reels, Meta’s TikTok clone, saying that its “monetization efficiency” — or how much money the company is making from ads on Reels — has grown “but is still very low.” Overall, Reels is “still smaller than TikTok,” Schultz wrote. Meta CEO Mark Zuckerberg said in November that the amount of time users spend on Reels is about half of the time spent on TikTok, in countries outside of China.

Zuckerberg also said in a post-earnings call post this month that there are more than 140 billion Reels plays across Facebook and Instagram each day, a more than 50 percent increase from six months ago. But advertising within Reels still doesn’t make nearly as much money as advertising within Facebook and Instagram feeds.

In terms of the overall popularity of Meta’s apps, Schultz was similarly blunt.

“We are seeing better numbers on young adults and teens in the US but we’re not satisfied, sentiment trends are better for our brands but that doesn’t mean they are good in the US and similar countries and I could go on and on,” Schultz wrote.

The memo is in line with Zuckerberg’s drumbeat of messaging in recent months: Employees need to work harder to make sure Meta is “winning” again. The company is reportedly planning another round of layoffs. In particular, Zuckerberg wants to cut layers of middle management as part of his drive for increased efficiency.

For Meta, a company that had two decades of nearly unstoppable growth that suddenly halted in the past year, the note is also a demonstration of how tenuous the company’s trajectory remains. It’s too early to call Meta’s recent stock market gains a comeback.

As Meta and the rest of the tech industry face unprecedented economic uncertainty, Meta’s leaders aren’t planning to let the company rest on its laurels. Schultz’s note makes it clear: There’s still a lot more work to do before Meta can return to its glory days.

Read the full memo below:

Hey, team, just like when I talked in our Q&A after our stock price dropped precipitously last year there’s been another big street reaction to our earnings call (and the run up to it), this time up. It’s nice to see people thinking we’ve improved our discipline and we’re not as bad they thought. I’ve been in a few groups though where I’ve seen folks get quite excited. So I want to remind you what I said last year. We’re never as bad as they think we are at times like last year’s stock crash but we’re probably never as good as they think at times like this. We’re still early in this turnaround. We still have efficiency we need to find to run this company better in the new reality, we’re still at the whim of Apple, relative Monetization Efficiency has grown on reels but it is still very low, reels have grown a lot but they are still smaller than TikTok, we are seeing better numbers on young adults and teens in the US but we’re not satisfied, sentiment trends are better for our brands but that doesn’t mean they are good in the US and similar countries and I could go on and on. We have to keep our eyes on the horizon and not focus on the reaction of the street and our stock price. I believe in this company, I am really bullish in the long term future, all the things I felt positive about last year, I feel positive about, BUT we’re still early in this turnaround, not everything will pan out, we will have a lot of highs and lows yet and we have to keep a long term focus and level head no matter what the outside noise is, positive or negative.

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