01—Abstract
Summary
Summary of the 10-K filed February 3, 2022. Cited figures are marked; the original filing is the authoritative source.
Meta Platforms, Inc. (META) filed its 2021 10-K, reporting strong year-over-year revenue growth of 37%a driven by a significant increase in advertising revenue, up 37%.
This growth was fueled by a 24%b rise in average ad prices and a 10% increase in ad impressions, reflecting a recovery from pandemic-related impacts and growing digital ad demand. The company's Family of Apps (FoA) segment remains the primary revenue driver, with a 45% increase in operating income. However, the filing also highlights substantial investments and increasing operating losses within the Reality Labs (RL) segment, which is focused on the metaverse.
RL's operating loss widened to $10.2 billionc in 2021, signaling the company's long-term strategic shift and significant capital allocation towards future immersive experiences. Meta also faces ongoing regulatory scrutiny and legal challenges globally, particularly concerning privacy, data use, and antitrust matters, which could impact future operations and financial results.
02—Key points
Key Highlights
- Total revenue increased by 37% to $117.9 billion in 2021, driven by a 37% increase in advertising revenue.
- Average revenue per person (ARPP) across the Family of Apps increased by 22% year-over-year to $33.68.
- Reality Labs segment revenue doubled, increasing by 100% to $2.3 billion, though it reported an operating loss of $10.2 billion.
- Family of Apps (FoA) reported a 45% increase in operating income, reaching $56.9 billion.
- Capital expenditures were significant, totaling $19.2 billion in 2021, with future expenditures projected between $29-$34 billion for 2022, largely to support infrastructure and Reality Labs investments.
- The company reported 71,970 employees as of December 31, 2021, a 23% year-over-year increase.
- Meta faces substantial ongoing regulatory and legal challenges, including antitrust investigations and data privacy concerns in various jurisdictions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Meta Platforms, Inc. kept $0.33.
- Revenue$117.93B100.0%
- Cost of revenue−$22.65B19.2%
- Gross profit$95.28B80.8%
- Operating costs−$48.53B41.1%
- Operating income$46.75B39.6%
- Interest, other & tax−$7.38B6.3%
- Net income$39.37B33.4%
Where FY2021 revenue went
$117.93B- Net income: $39.37B, 33% of revenue
- R&D: $24.66B, 21% of revenue
- Other operating costs: $23.87B, 20% of revenue
- Cost of revenue: $22.65B, 19% of revenue
- Interest, other & tax: $7.38B, 6.3% of revenue
Kept 33% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 3, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $117.93B$85.97B | +37.2% |
| Cost of Revenue | $22.65B$16.69B | +35.7% |
| Gross Profit | $95.28B$69.27B | +37.5% |
| R&D Expenses | $24.66B$18.45B | +33.7% |
| Operating Expenses | $71.18B$53.29B | +33.6% |
| Operating Income | $46.75B$32.67B | +43.1% |
| Interest Expense | $23.00M— | — |
| Net Income | $39.37B$29.15B | +35.1% |
| EPS (Basic) | $13.99$10.22 | +36.9% |
| EPS (Diluted) | $13.77$10.09 | +36.5% |
| Shares Outstanding (Basic) | 2.81B2.85B | −1.3% |
| Shares Outstanding (Diluted) | 2.86B2.89B | −1.0% |
05—Questions
Frequently Asked Questions
What is Meta's primary source of revenue and how did it perform in 2021?
Meta's primary source of revenue is advertising, which generated $114.9 billion in 2021, a 37% increase year-over-year. This growth was driven by higher average ad prices and an increased number of ad impressions delivered across its platforms.
What is the financial performance and outlook for the Reality Labs segment?
The Reality Labs segment, focused on the metaverse, saw its revenue more than double to $2.3 billion in 2021. However, it reported a significant operating loss of $10.2 billion for the year, reflecting substantial ongoing investment in future technologies. Meta expects these investments to continue impacting profitability in the near term.
What are the major risks and challenges Meta Platforms is facing?
Meta faces significant risks including increased competition (especially from platforms like TikTok), evolving privacy regulations (like GDPR and CCPA) impacting ad targeting and measurement, potential changes to mobile operating system policies (e.g., Apple's iOS changes), ongoing regulatory scrutiny and litigation regarding antitrust, data privacy, and content moderation, and the substantial financial investment required for its metaverse strategy which may not yield expected returns.
How is Meta managing its cash and capital allocation?
Meta generated strong operating cash flow, enabling significant capital expenditures primarily in data center capacity and Reality Labs. The company also repurchased $44.8 billion of its Class A common stock in 2021. Meta ended 2021 with $48.0 billion in cash, cash equivalents, and marketable securities, and anticipates substantial capital expenditures for 2022, signaling a continued focus on long-term growth and metaverse development.
06—Continue