The number of people using Facebook daily grew to an average of two billion in December - about a quarter of the world's population.
The bigger-than-expected growth helped drive new optimism about the company, which has been under pressure as its costs rise and advertising sales slump.
Shares in parent company Meta surged more than 15% in after-hours trade as boss Mark Zuckerberg declared 2023 the "year of efficiency".
He said he was focused on cost cuts.
"We're in a different environment now," he said, pointing to the firm's revenue, which declined in 2022 for the first time in its history after years of double-digit growth.
"We don't anticipate that that's going to continue, but I also don't think it's going to go back to the way it was before."
Meta, which also owns Instagram and WhatsApp, announced a major restructuring last year, including reducing office space and cutting 11,000 jobs or about 13% of staff.
The firm said those moves cost it $4.6bn last year - hitting its profits, which were almost cut in half. It still brought it in $23.2bn in profit for the year.
"2022 was a challenging year but I think we ended it having made good progress," Mr Zuckerberg said.
In the three months to December, the firm said revenue was $32.2bn, down 4% year-on-year.
But that was better than many analysts had expected.
Meta had alarmed investors last year when it posted the first-ever decline in daily Facebook users in its history and signalled it was focusing investments on virtual reality, known as the metaverse.
But in December, the number of users on the site daily was up 4% from a year earlier, adding users even in Europe and the US and Canada.
Meta said the number of people active across all of its apps each day was up 5% year-on-year.
Mr Zuckerberg said the company was making progress with its video product - Reels - which it has been focused on as it faces off with rivals such as TikTok, which have gained traction, especially among younger users.
Mr Zuckerberg said those efforts were starting to pay off, and ad dollars were starting to follow users to the videos.
Investors seized on the company's forecast of lower costs and stronger sales than expected in the months ahead, helping send shares higher.
The company also said it would spend an extra $40bn to buy back shares, which dropped sharply last year amid investor doubts about the direction of the company.