10-QPeriod: Q3 FY2013

Meta Platforms, Inc. Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 1, 2013For Securities:META

Summary

Meta Platforms, Inc. (META) reported strong financial performance for the nine months ended September 30, 2013. Revenue saw a significant increase of 51% year-over-year, reaching $5.286 billion, driven primarily by a 57% surge in advertising revenue. This growth was fueled by increased ad delivery and higher prices per ad, especially from News Feed ads on mobile devices. The company demonstrated a return to profitability, with net income of $977 million for the first nine months of 2013, a significant improvement from a net loss of $11 million in the prior year period. This financial strength is supported by robust user growth, with Monthly Active Users (MAUs) reaching 1.19 billion, a 18% increase, and mobile MAUs growing by an impressive 45% to 874 million. Operationally, the company is investing heavily in its infrastructure, as evidenced by a 43% increase in cost of revenue, largely due to data center expansion, and a 51% increase in R&D expenses for the third quarter, reflecting investments in product development. Despite these investments, operating income grew significantly, and the company ended the period with a healthy $3.1 billion in cash and cash equivalents. Management anticipates available funds and cash flow from operations will be sufficient for future needs. However, investors should note ongoing litigation related to the IPO and potential risks associated with competition and evolving regulatory environments.

Financial Highlights

52 data points
Beta

Revenue

$2.02B

74.9% Gross Margin

Net Income

$425.00M

21.1% Net Margin

EPS (Diluted)

$0.17

Total Assets

$14.93B

Cash & Equivalents

$3.10B

Free Cash Flow

$666.00M

Financial Statements
Beta
Revenue$2.02B
Cost of Revenue$507.00M
Gross Profit$1.51B
R&D Expenses$369.00M
Operating Expenses$1.28B
Operating Income$736.00M
Interest Expense$21.00M
Net Income$425.00M
EPS (Basic)$0.17
EPS (Diluted)$0.17
Shares Outstanding (Basic)2.43B
Shares Outstanding (Diluted)2.53B

Key Highlights

  • 1Revenue increased by 51% year-over-year to $5.286 billion for the nine months ended September 30, 2013.
  • 2Advertising revenue, the primary revenue driver, grew by 57% year-over-year due to increased ad delivery and higher pricing, with a significant contribution from mobile News Feed ads.
  • 3The company returned to profitability, reporting a net income of $977 million for the nine months ended September 30, 2013, compared to a net loss of $11 million in the same period of 2012.
  • 4Monthly Active Users (MAUs) grew 18% year-over-year to 1.19 billion as of September 30, 2013.
  • 5Mobile MAUs experienced substantial growth of 45% year-over-year, reaching 874 million.
  • 6The company ended the period with $3.1 billion in cash and cash equivalents, demonstrating strong liquidity.
  • 7Significant investments in infrastructure (cost of revenue up 43%) and research and development (R&D up 51% in Q3) are ongoing.

Frequently Asked Questions

For the nine months ended September 30, 2013, Meta Platforms reported a 51% increase in revenue year-over-year, reaching $5.286 billion. The company returned to profitability with a net income of $977 million, a significant improvement from a net loss of $11 million in the same period of 2012. This strong performance was driven primarily by a 57% increase in advertising revenue.

Meta Platforms continues to experience robust user growth. As of September 30, 2013, Monthly Active Users (MAUs) increased by 18% year-over-year to 1.19 billion. Mobile Monthly Active Users (Mobile MAUs) showed particularly strong growth, increasing by 45% year-over-year to 874 million, indicating a significant shift towards mobile engagement.

The primary driver of revenue growth is advertising, which increased by 57% year-over-year for the nine months ended September 30, 2013. This growth is attributed to an increase in the number of ads delivered and a rise in the average price per ad. Notably, advertising revenue from News Feed ads on mobile devices has become a significant contributor, representing approximately 49% of total advertising revenue in the third quarter of 2013.

Meta Platforms is investing heavily in its infrastructure, with cost of revenue increasing by 43% for the first nine months of 2013, largely due to data center expansion. Research and development expenses also saw a significant increase, up 51% in the third quarter, reflecting investments in product development. The company maintains a strong liquidity position, ending the period with $3.1 billion in cash and cash equivalents, and management expects sufficient cash flow from operations to meet future needs.