10-QPeriod: Q2 FY2020

Meta Platforms, Inc. Quarterly Report for Q2 Ended Jun 30, 2020

Filed July 31, 2020For Securities:META

Summary

Meta Platforms, Inc. (META) reported solid financial results for the second quarter of 2020, demonstrating resilience despite the evolving economic landscape influenced by the COVID-19 pandemic. The company saw significant growth in its user base across its family of products, with daily active users (DAUs) reaching 1.79 billion and monthly active users (MAUs) at 2.70 billion, reflecting an 11% and 14% year-over-year increase, respectively. Revenue for the quarter rose by 11% to $18.69 billion, driven primarily by advertising revenue, which grew 10% to $18.32 billion. Despite increased investments in research and development and marketing, the company maintained a strong operating margin of 32%, contributing to a net income of $5.18 billion and diluted earnings per share of $1.80. The company highlighted continued investment in its core priorities: supporting marketers, fostering user connections, and addressing major social issues like privacy and safety. Meta also reported substantial cash reserves and continued capital expenditures, underscoring its commitment to long-term growth and infrastructure development. While the pandemic presented advertising demand challenges, Meta's diversified user base and strategic investments position it for continued engagement and growth.

Financial Highlights

49 data points
Beta

Revenue

$18.69B

79.5% Gross Margin

Net Income

$5.18B

27.7% Net Margin

EPS (Diluted)

$1.80

Total Assets

$139.69B

Cash & Equivalents

$21.05B

Free Cash Flow

$622.00M

Financial Statements
Beta
Revenue$18.69B
Cost of Revenue$3.83B
Gross Profit$14.86B
R&D Expenses$4.46B
Operating Expenses$12.72B
Operating Income$5.96B
Net Income$5.18B
EPS (Basic)$1.82
EPS (Diluted)$1.80
Shares Outstanding (Basic)2.85B
Shares Outstanding (Diluted)2.88B

Key Highlights

  • 1Revenue increased 11% year-over-year to $18.69 billion in Q2 2020.
  • 2Facebook DAUs grew 12% year-over-year to 1.79 billion, and MAUs grew 12% to 2.70 billion.
  • 3Family daily active people (DAP) increased 15% year-over-year to 2.47 billion.
  • 4Net income was $5.18 billion, with diluted EPS of $1.80.
  • 5Operating margin remained strong at 32%.
  • 6Capital expenditures for the six months ended June 30, 2020, were $6.81 billion.
  • 7The company held $58.24 billion in cash and cash equivalents and marketable securities as of June 30, 2020.

Frequently Asked Questions

While COVID-19 led to a reduction in advertising demand and pricing in Q2 2020, Meta experienced significant increases in user base size and engagement across its platforms. The company's revenue still grew by 11% year-over-year, indicating resilience, though growth rates were impacted. Meta also saw increased expenses related to supporting users and working on economic recovery efforts.

Meta's strategy focuses on supporting marketers, building new experiences to improve people's lives, strengthening its business by supporting businesses that rely on its services, and communicating transparently. The company continues to invest in its core priorities, including privacy, safety, security, and building new experiences, alongside infrastructure investments.

Meta continues to see strong growth in its user base. Facebook daily active users (DAUs) and monthly active users (MAUs) increased by 12% year-over-year. Across its entire family of products (Facebook, Instagram, Messenger, WhatsApp), daily active people (DAP) grew 15% and monthly active people (MAP) grew 14% year-over-year, demonstrating broad engagement across its platforms.

Meta is involved in several ongoing legal and regulatory matters, including substantial settlements and investigations related to privacy practices, data misuse, and antitrust concerns. Notably, the company paid a $5.0 billion penalty to the FTC in April 2020 to resolve an inquiry and is involved in litigation regarding biometric privacy and data breaches. These matters require significant resources and could lead to future costs and changes in business practices.