10-QPeriod: Q3 FY2024

Meta Platforms, Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 31, 2024For Securities:META

Summary

Meta Platforms, Inc. (META) demonstrated robust financial performance in the third quarter of 2024, with total revenue reaching $40.59 billion, 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 billion for the quarter, reflecting ongoing substantial investments in the metaverse. Financially, the company ended the quarter with a healthy $70.90 billion 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% 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.

Financial Highlights

52 data points
Beta

Revenue

$40.59B

81.8% Gross Margin

Net Income

$15.69B

38.7% Net Margin

EPS (Diluted)

$6.03

Total Assets

$256.41B

Cash & Equivalents

$43.85B

Free Cash Flow

$16.47B

Financial Statements
Beta
Revenue$40.59B
Cost of Revenue$7.38B
Gross Profit$33.21B
R&D Expenses$11.18B
Operating Expenses$23.24B
Operating Income$17.35B
Interest Expense$200.00M
Net Income$15.69B
EPS (Basic)$6.20
EPS (Diluted)$6.03
Shares Outstanding (Basic)2.53B
Shares Outstanding (Diluted)2.60B

Key Highlights

  • 1Total revenue increased 19% year-over-year to $40.59 billion, driven primarily by advertising.
  • 2Family of Apps (FoA) operating income grew 25% year-over-year to $21.78 billion.
  • 3Reality Labs (RL) reported an operating loss of $4.43 billion for the quarter, an 18% increase in loss compared to the prior year.
  • 4Diluted earnings per share (EPS) was $6.03, up from $4.39 in the prior year's third quarter.
  • 5The company repurchased $8.86 billion of its Class A common stock and paid $1.26 billion in dividends and dividend equivalents.
  • 6Cash, cash equivalents, and marketable securities stood at $70.90 billion as of September 30, 2024.
  • 7Headcount increased by 9% year-over-year to 72,404 employees.

Frequently Asked Questions

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.

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.

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.

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.