01—Abstract
Summary
Summary of the 10-K filed January 31, 2014. Cited figures are marked; the original filing is the authoritative source.
Meta Platforms, Inc. (then Facebook) reported strong revenue growth for the fiscal year ended December 31, 2013, with total revenue reaching $7.87 billiona, a 55% increase year-over-year.
This growth was primarily driven by a significant surge in advertising revenue, up 63%b from the previous year, largely attributed to the increased prominence and effectiveness of ads within the News Feed on both mobile and desktop platforms. Notably, mobile advertising revenue constituted approximately 45% of total advertising revenue in 2013, up from 11% in 2012, highlighting the company's successful pivot to mobile monetization. The company continues to focus on expanding its global user base, which stood at 1.23 billion monthly active users (MAUs) as of December 31, 2013, with a particular emphasis on increasing engagement through mobile devices.
This strategic focus on user growth and engagement, even at the potential expense of short-term monetization, underpins Meta's long-term business strategy. While costs also increased, primarily due to investments in infrastructure and R&D, the company achieved profitability, reporting a net income of $1.5 billionc for 2013, a substantial increase from $53 million in 2012. Investors should note the increasing reliance on mobile, the ongoing investment in new products and infrastructure, and the competitive landscape as key factors to monitor.
02—Key points
Key Highlights
- Revenue grew 55% to $7.87 billion in 2013, driven by a 63% increase in advertising revenue.
- Mobile advertising revenue accounted for approximately 45% of total advertising revenue in 2013, a significant increase from 11% in 2012.
- Monthly Active Users (MAUs) reached 1.23 billion as of December 31, 2013, a 16% increase year-over-year.
- Daily Active Users (DAUs) grew 22% to 757 million on average in December 2013.
- Net income dramatically improved to $1.5 billion in 2013, compared to $53 million in 2012.
- The company continues to invest heavily in research and development, with expenses totaling $1.415 billion in 2013.
- Meta Platforms (Facebook) generated substantial free cash flow of $2.849 billion in 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Meta Platforms, Inc. kept $0.19.
- Revenue$7.87B100.0%
- Cost of revenue−$1.88B23.8%
- Gross profit$6.00B76.2%
- Operating costs−$3.19B40.6%
- Operating income$2.80B35.6%
- Interest, other & tax−$1.30B16.6%
- Net income$1.50B19.1%
Where FY2013 revenue went
$7.87B- Cost of revenue: $1.88B, 24% of revenue
- Other operating costs: $1.78B, 23% of revenue
- Net income: $1.50B, 19% of revenue
- R&D: $1.42B, 18% of revenue
- Interest, other & tax: $1.30B, 17% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed January 31, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $7.87B$5.09B | +54.7% |
| Cost of Revenue | $1.88B$1.36B | +37.5% |
| Gross Profit | $6.00B$3.73B | +61.0% |
| R&D Expenses | $1.42B$1.40B | +1.1% |
| Operating Expenses | $5.07B$4.55B | +11.4% |
| Operating Income | $2.80B$538.00M | +421.2% |
| Interest Expense | $56.00M$51.00M | +9.8% |
| Net Income | $1.50B$53.00M | +2730.2% |
| EPS (Basic) | $0.62$0.02 | +3000.0% |
| EPS (Diluted) | $0.60$0.01 | +5900.0% |
| Shares Outstanding (Basic) | 2.42B2.01B | +20.6% |
| Shares Outstanding (Diluted) | 2.52B2.17B | +16.2% |
05—Questions
Frequently Asked Questions
What is Meta Platforms' primary source of revenue, and how is it growing?
Meta Platforms' primary source of revenue is advertising. In 2013, advertising revenue increased by 63% to $6.986 billion, representing the substantial majority of the company's total revenue. This growth was significantly fueled by the successful integration and monetization of ads within the News Feed on mobile devices and PCs.
How significant is the shift to mobile for Meta Platforms?
The shift to mobile is critically important. In 2013, mobile advertising revenue constituted approximately 45% of total advertising revenue, a dramatic increase from 11% in 2012. The company's user base also shows a strong mobile presence, with mobile MAUs growing 39% to 945 million as of December 31, 2013. This trend is expected to continue to be the primary driver of user growth and monetization.
What are the main risks facing Meta Platforms according to this filing?
Key risks include the potential failure to retain or grow its user base and engagement, which directly impacts advertising revenue. Competition from other social networks and technology companies is significant. The company also faces risks related to evolving laws and regulations concerning user privacy and data protection, as well as potential negative publicity impacting its brand and reputation. Monetizing new products and user growth on mobile devices also presents ongoing challenges.
What is Meta Platforms' strategy for future growth?
Meta Platforms' strategy focuses on expanding its global community, developing engaging social products to increase user interaction, enhancing the utility and user experience of its services, and improving its advertising products. A critical component is excelling at mobile product development and ensuring these products are fast, reliable, and accessible. They also aim to enable developers to build and monetize applications on their platform and invest in a scalable infrastructure.
06—Continue