10-QPeriod: Q3 FY2018

Meta Platforms, Inc. Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 31, 2018For Securities:META

Summary

Meta Platforms, Inc. (META) reported strong financial performance for the third quarter of 2018, with revenue reaching $13.73 billion, a 33% increase year-over-year, driven primarily by advertising revenue. Net income stood at $5.14 billion, resulting in diluted earnings per share of $1.76. The company continued its aggressive investment in long-term initiatives, including safety and security, scaling headcount, and expanding data center capacity, which led to total costs and expenses of $7.95 billion. Despite increased expenses, the company maintains a robust financial position with $41.21 billion in cash and cash equivalents and marketable securities as of September 30, 2018. Investors should note the ongoing legal and regulatory scrutiny related to user data practices and a recent cyber-attack, which are significant contingent liabilities for the company.

Financial Highlights

49 data points
Beta

Revenue

$13.73B

82.4% Gross Margin

Net Income

$5.14B

37.4% Net Margin

EPS (Diluted)

$1.76

Total Assets

$92.45B

Cash & Equivalents

$9.74B

Free Cash Flow

$4.16B

Financial Statements
Beta
Revenue$13.73B
Cost of Revenue$2.42B
Gross Profit$11.31B
R&D Expenses$2.66B
Operating Expenses$7.95B
Operating Income$5.78B
Net Income$5.14B
EPS (Basic)$1.78
EPS (Diluted)$1.76
Shares Outstanding (Basic)2.88B
Shares Outstanding (Diluted)2.91B

Key Highlights

  • 1Revenue grew 33% year-over-year to $13.73 billion, with advertising revenue up 33% to $13.54 billion.
  • 2Net income was $5.14 billion, and diluted EPS was $1.76.
  • 3Daily Active Users (DAUs) increased by 9% to 1.49 billion, and Monthly Active Users (MAUs) grew by 10% to 2.27 billion.
  • 4The company continued significant investments in infrastructure and headcount, with capital expenditures of $3.34 billion in Q3 and a 45% year-over-year increase in headcount.
  • 5Cash and cash equivalents and marketable securities totaled $41.21 billion.
  • 6The company repurchased approximately $9.38 billion of Class A common stock in the first nine months of 2018.
  • 7Ongoing legal proceedings and government inquiries related to data privacy and a recent cyber-attack represent significant contingent liabilities.

Frequently Asked Questions

Meta Platforms (Facebook) reported a 33% year-over-year increase in revenue for the third quarter of 2018, reaching $13.73 billion. This growth was primarily driven by advertising revenue, which also increased by 33% to $13.54 billion, with mobile advertising representing approximately 92% of total advertising revenue.

The company experienced continued user growth. Daily Active Users (DAUs) averaged 1.49 billion in September 2018, a 9% increase year-over-year. Monthly Active Users (MAUs) reached 2.27 billion as of September 30, 2018, up 10% year-over-year.

Meta is facing multiple class action lawsuits and government inquiries related to user data practices, including the misuse of data by a developer and a recent cyber-attack that compromised user access tokens. These matters are being vigorously defended but represent significant contingent liabilities and potential for substantial fines and business practice changes.

Meta continued to invest heavily in its growth priorities, including safety and security, scaling headcount, and expanding data center capacity and network infrastructure. This resulted in significant year-over-year expense growth, with total costs and expenses reaching $7.95 billion in Q3 2018. The company anticipates expense growth to exceed revenue growth in the remainder of 2018 and 2019.