10-KPeriod: FY2019

Meta Platforms, Inc. Annual Report, Year Ended Dec 31, 2019

Filed January 30, 2020For Securities:META

Summary

Meta Platforms, Inc. (formerly Facebook, Inc.) filed its 2019 10-K on January 29, 2020, detailing a year of significant growth and substantial investments. The company reported robust revenue growth of 27% to $70.7 billion, primarily driven by its advertising business across Facebook and Instagram. User growth remained strong across its Family of services, with daily active people (DAP) increasing by 11% year-over-year to 2.26 billion and monthly active people (MAP) reaching 2.89 billion. However, the filing also highlights significant legal and regulatory challenges. A substantial $5 billion settlement with the FTC for privacy violations was a major event, alongside ongoing antitrust investigations and scrutiny over data privacy practices. These factors contributed to a notable increase in general and administrative expenses. Despite these headwinds, Meta continued its aggressive investment in research and development and infrastructure, indicating a continued focus on long-term growth and innovation in areas such as augmented and virtual reality.

Financial Highlights

51 data points
Beta

Revenue

$70.70B

81.9% Gross Margin

Net Income

$18.48B

26.1% Net Margin

EPS (Diluted)

$6.43

Total Assets

$133.38B

Cash & Equivalents

$19.28B

Free Cash Flow

$21.21B

Financial Statements
Beta
Revenue$70.70B
Cost of Revenue$12.77B
Gross Profit$57.93B
R&D Expenses$13.60B
Operating Expenses$46.71B
Operating Income$23.99B
Interest Expense$20.00M
Net Income$18.48B
EPS (Basic)$6.48
EPS (Diluted)$6.43
Shares Outstanding (Basic)2.85B
Shares Outstanding (Diluted)2.88B

Key Highlights

  • 1Revenue grew 27% year-over-year to $70.7 billion, driven by a 27% increase in advertising revenue.
  • 2Facebook Daily Active Users (DAUs) increased 9% to 1.66 billion, and Monthly Active Users (MAUs) grew 8% to 2.50 billion.
  • 3Family Daily Active People (DAP) increased 11% to 2.26 billion, and Family Monthly Active People (MAP) grew 9% to 2.89 billion.
  • 4The company recorded a $5 billion settlement with the FTC related to privacy issues.
  • 5Research and development expenses increased by 32% to $13.6 billion, reflecting ongoing investment in new technologies and products.
  • 6Capital expenditures were substantial, totaling $15.65 billion, primarily for data centers, servers, and infrastructure.
  • 7The company faces significant ongoing government investigations and regulatory scrutiny concerning privacy, data usage, and competition.

Frequently Asked Questions

The company generated substantially all of its revenue from advertising. Advertising revenue for 2019 was $69.66 billion, representing the vast majority of its total revenue.

Meta reported strong user growth across its platforms. Facebook DAUs increased by 9% year-over-year to 1.66 billion, and MAUs grew by 8% to 2.50 billion. Across its 'Family' of products (Facebook, Instagram, Messenger, WhatsApp), DAP increased 11% to 2.26 billion, and MAP grew 9% to 2.89 billion.

The company's primary expenses included cost of revenue ($12.77 billion), research and development ($13.60 billion), marketing and sales ($9.88 billion), and general and administrative costs ($10.47 billion). A significant portion of the general and administrative expenses was due to a $5 billion FTC settlement.

Key risks include intense competition, the potential for user growth and engagement to decline, reliance on advertising revenue, significant regulatory and legal challenges (including privacy concerns and government investigations), and the substantial investments in new technologies that may not yield expected returns. The company also noted the potential for its stock price to be volatile.