01—Abstract
Summary
Summary of the 10-K filed February 1, 2018. Cited figures are marked; the original filing is the authoritative source.
Meta Platforms, Inc.'s (META) 2017 10-K filing highlights robust financial performance driven primarily by its advertising business.
The company reported significant year-over-year revenue growth of 47%, reaching $40.65 billiona, with advertising revenue accounting for approximately 98% of total revenue. Daily Active Users (DAUs) and Monthly Active Users (MAUs) both saw a 14% year-over-year increase, demonstrating continued user engagement across its core platforms like Facebook and Instagram. Despite strong revenue growth, Meta also reported substantial investments in research and development, infrastructure, and long-term initiatives such as AI and VR/AR.
The company faces ongoing risks related to competition, regulatory scrutiny (particularly with the impending GDPR), data privacy, and user retention. Investors should note the significant control held by CEO Mark Zuckerberg due to the dual-class stock structure and the company's policy of not paying dividends, signaling a focus on reinvestment for future growth.
02—Key points
Key Highlights
- Total revenue for 2017 was $40.65 billion, a 47% increase year-over-year, primarily driven by advertising.
- Daily Active Users (DAUs) averaged 1.40 billion in December 2017, a 14% increase year-over-year.
- Monthly Active Users (MAUs) reached 2.13 billion as of December 31, 2017, a 14% increase year-over-year.
- Advertising revenue represented approximately 98% of total revenue in 2017.
- Research and development expenses were $7.75 billion in 2017, reflecting significant investment in product development and future technologies.
- The company ended 2017 with substantial cash, cash equivalents, and marketable securities totaling $41.71 billion.
- Significant risk factors include intense competition, evolving privacy regulations (like GDPR), user retention, and reliance on advertising revenue.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Meta Platforms, Inc. kept $0.39.
- Revenue$40.65B100.0%
- Cost of revenue−$5.45B13.4%
- Gross profit$35.20B86.6%
- Operating costs−$15.00B36.9%
- Operating income$20.20B49.7%
- Interest, other & tax−$4.27B10.5%
- Net income$15.93B39.2%
Where FY2017 revenue went
$40.65B- Net income: $15.93B, 39% of revenue
- R&D: $7.75B, 19% of revenue
- Other operating costs: $7.24B, 18% of revenue
- Cost of revenue: $5.45B, 13% of revenue
- Interest, other & tax: $4.27B, 11% of revenue
Kept 39% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 1, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $40.65B$27.64B | +47.1% |
| Cost of Revenue | $5.45B$3.79B | +43.9% |
| Gross Profit | $35.20B$23.85B | +47.6% |
| R&D Expenses | $7.75B$5.92B | +31.0% |
| Operating Expenses | $20.45B$15.21B | +34.4% |
| Operating Income | $20.20B$12.43B | +62.6% |
| Interest Expense | $6.00M$10.00M | −40.0% |
| Net Income | $15.93B$10.22B | +56.0% |
| EPS (Basic) | $5.49$3.56 | +54.2% |
| EPS (Diluted) | $5.39$3.49 | +54.4% |
| Shares Outstanding (Basic) | 2.90B2.86B | +1.3% |
| Shares Outstanding (Diluted) | 2.96B2.92B | +1.1% |
05—Questions
Frequently Asked Questions
What is Meta Platforms' primary source of revenue?
Meta Platforms' primary source of revenue is advertising. In 2017, advertising accounted for approximately 98% of the company's total revenue.
How is Meta Platforms investing for future growth?
Meta Platforms is investing in several key areas for future growth, including its core Facebook app and platform, video content, developing ecosystems around Instagram, Messenger, and WhatsApp, and long-term technology initiatives such as connectivity, artificial intelligence, and augmented/virtual reality.
What are the key risks facing Meta Platforms according to this filing?
Key risks include intense competition, potential decreases in user growth or engagement, reliance on advertising revenue, evolving government regulations (especially regarding privacy and data protection like GDPR), security breaches, damage to brand reputation, and the challenges of integrating acquisitions.
What is Meta Platforms' stance on dividends?
Meta Platforms has never declared or paid cash dividends on its common stock and does not expect to pay cash dividends in the foreseeable future. The company intends to retain future earnings to finance operations and expansion.
06—Continue