01—Abstract
Summary
Summary of the 10-Q filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Meta Platforms, Inc. (META) demonstrated robust financial performance in the third quarter of 2024, with total revenue reaching $40.59 billiona, a significant 19% increase year-over-year.
This growth was primarily driven by a 19% surge in advertising revenue, fueled by a 7% increase in ad impressions and an 11% rise in the average price per ad. The Family of Apps (FoA) segment continues to be the primary revenue generator, showing strong operational income growth. However, the Reality Labs (RL) segment reported an operating loss of $4.43 billionb for the quarter, reflecting ongoing substantial investments in the metaverse.
Financially, the company ended the quarter with a healthy $70.90 billionc in cash, cash equivalents, and marketable securities. Meta also returned significant capital to shareholders through $8.86 billion in share repurchases and $1.26 billion in dividends and dividend equivalents during the quarter.
Despite substantial investments in AI and the metaverse, the company's effective tax rate remained low at 12%d for the quarter. While overall financial performance was strong, investors should monitor the continued investment and losses in Reality Labs, as well as the potential impact of ongoing litigation and regulatory scrutiny on future operations.
02—Key points
Key Highlights
- Total revenue increased 19% year-over-year to $40.59 billion, driven primarily by advertising.
- Family of Apps (FoA) operating income grew 25% year-over-year to $21.78 billion.
- Reality Labs (RL) reported an operating loss of $4.43 billion for the quarter, an 18% increase in loss compared to the prior year.
- Diluted earnings per share (EPS) was $6.03, up from $4.39 in the prior year's third quarter.
- The company repurchased $8.86 billion of its Class A common stock and paid $1.26 billion in dividends and dividend equivalents.
- Cash, cash equivalents, and marketable securities stood at $70.90 billion as of September 30, 2024.
- Headcount increased by 9% year-over-year to 72,404 employees.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Meta Platforms, Inc. kept $0.39.
- Revenue$40.59B100.0%
- Cost of revenue−$7.38B18.2%
- Gross profit$33.21B81.8%
- Operating costs−$15.86B39.1%
- Operating income$17.35B42.7%
- Interest, other & tax−$1.66B4.1%
- Net income$15.69B38.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 31, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $40.59B$34.15B | +18.9% |
| Cost of Revenue | $7.38B$6.21B | +18.8% |
| Gross Profit | $33.21B$27.94B | +18.9% |
| R&D Expenses | $11.18B$9.24B | +21.0% |
| Operating Expenses | $23.24B$20.40B | +13.9% |
| Operating Income | $17.35B$13.75B | +26.2% |
| Interest Expense | $200.00M$132.00M | +51.5% |
| Net Income | $15.69B$11.58B | +35.4% |
| EPS (Basic) | $6.20$4.50 | +37.8% |
| EPS (Diluted) | $6.03$4.39 | +37.4% |
| Shares Outstanding (Basic) | 2.53B2.58B | −1.8% |
| Shares Outstanding (Diluted) | 2.60B2.64B | −1.6% |
05—Questions
Frequently Asked Questions
What is Meta's primary growth driver for this quarter?
Meta's primary growth driver for the third quarter of 2024 was its advertising revenue, which increased by 19% year-over-year. This growth was supported by an increase in both the number of ad impressions delivered and the average price per ad.
How is the Reality Labs segment performing financially?
The Reality Labs segment continues to operate at a significant loss, reporting an operating loss of $4.43 billion for the third quarter of 2024. This reflects the company's ongoing substantial investments in metaverse-related technologies and hardware, which are expected to continue to pressure profitability in the near to medium term.
What is Meta's approach to capital return to shareholders?
Meta actively returns capital to shareholders through its share repurchase program and, more recently, by initiating quarterly cash dividends. In the third quarter of 2024, the company repurchased $8.86 billion of its Class A common stock and paid out $1.26 billion in dividends and dividend equivalents, demonstrating a commitment to both share buybacks and direct shareholder returns.
What are the key risks highlighted by Meta in this filing?
Key risks highlighted include increased competition, evolving regulatory landscapes impacting data privacy and advertising (such as GDPR, DMA, and CCPA), potential disruptions to ad targeting and measurement tools due to changes in mobile operating systems, and the ongoing substantial investments and losses in the Reality Labs segment. Additionally, litigation and government investigations remain a significant ongoing risk.
06—Continue