10-KPeriod: FY2013

Meta Platforms, Inc. Annual Report, Year Ended Dec 31, 2013

Filed January 31, 2014For Securities:META

Summary

Meta Platforms, Inc. (then Facebook) reported strong revenue growth for the fiscal year ended December 31, 2013, with total revenue reaching $7.87 billion, a 55% increase year-over-year. This growth was primarily driven by a significant surge in advertising revenue, up 63% 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 billion 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.

Financial Highlights

53 data points
Beta

Revenue

$7.87B

76.2% Gross Margin

Net Income

$1.50B

19.1% Net Margin

EPS (Diluted)

$0.60

Total Assets

$17.89B

Cash & Equivalents

$3.32B

Free Cash Flow

$2.86B

Financial Statements
Beta
Revenue$7.87B
Cost of Revenue$1.88B
Gross Profit$6.00B
R&D Expenses$1.42B
Operating Expenses$5.07B
Operating Income$2.80B
Interest Expense$56.00M
Net Income$1.50B
EPS (Basic)$0.62
EPS (Diluted)$0.60
Shares Outstanding (Basic)2.42B
Shares Outstanding (Diluted)2.52B

Key Highlights

  • 1Revenue grew 55% to $7.87 billion in 2013, driven by a 63% increase in advertising revenue.
  • 2Mobile advertising revenue accounted for approximately 45% of total advertising revenue in 2013, a significant increase from 11% in 2012.
  • 3Monthly Active Users (MAUs) reached 1.23 billion as of December 31, 2013, a 16% increase year-over-year.
  • 4Daily Active Users (DAUs) grew 22% to 757 million on average in December 2013.
  • 5Net income dramatically improved to $1.5 billion in 2013, compared to $53 million in 2012.
  • 6The company continues to invest heavily in research and development, with expenses totaling $1.415 billion in 2013.
  • 7Meta Platforms (Facebook) generated substantial free cash flow of $2.849 billion in 2013.

Frequently Asked Questions

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.

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.

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.

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.