META
$186.53
Meta Platforms
($2.24)
(1.19%)
Earnings Details
Quarter December 2022
Wednesday, February 1, 2023 4:05:00 PM
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Summary

Meta Platforms Beats

Meta Platforms (META) reported Quarter December 2022 earnings of $3.00 per share on revenue of $32.2 billion. The consensus earnings estimate was $2.12 per share on revenue of $31.8 billion. The Earnings Whisper number was $2.25 per share. Revenue fell 4.5% compared to the same quarter a year ago.

The company said it expects first quarter revenue of $26.0 billion to $28.50 billion. The current consensus revenue estimate is $27.75 billion for the quarter ending March 31, 2023.

Meta builds technologies that help people connect, find communities, and grow businesses.

Results
Reported Earnings
$3.00
Earnings Whisper
$2.25
Consensus Estimate
$2.12
Reported Revenue
$32.17 Bil
Revenue Estimate
$31.80 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Meta Reports Fourth Quarter and Full Year 2022 Results

MENLO PARK, Calif., Feb. 1, 2023 /PRNewswire/ -- Meta Platforms, Inc. (Nasdaq: META) today reported financial results for the quarter and full year ended December 31, 2022.

"Our community continues to grow and I'm pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives," said Mark Zuckerberg, Meta founder and CEO. "The progress we're making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the 'Year of Efficiency' and we're focused on becoming a stronger and more nimble organization."

Fourth Quarter and Full Year 2022 Financial Highlights


Three Months Ended December 31,


 % Change


Year Ended December 31,


% Change

In millions, except percentages
and per share amounts

2022


2021



2022


2021


Revenue

$          32,165


$           33,671


(4) %


$        116,609


$        117,929


(1) %

Costs and expenses

25,766


21,086


22 %


87,665


71,176


23 %

Income from operations

$            6,399


$           12,585


(49) %


$          28,944


$          46,753


(38) %

Operating margin

20 %


37 %




25 %


40 %



Provision for income taxes

$            1,497


$             2,417


(38) %


$            5,619


$            7,914


(29) %

Effective tax rate

24 %


19 %




19 %


17 %



Net income

$            4,652


$           10,285


(55) %


$          23,200


$          39,370


(41) %

Diluted earnings per share (EPS)

$              1.76


$               3.67


(52) %


$              8.59


$            13.77


(38) %

Fourth Quarter and Full Year 2022 Operational and Other Financial Highlights

  • Family daily active people (DAP) – DAP was 2.96 billion on average for December 2022, an increase of 5% year-over-year.
  • Family monthly active people (MAP) – MAP was 3.74 billion as of December 31, 2022, an increase of 4% year-over-year.
  • Facebook daily active users (DAUs) – DAUs were 2.00 billion on average for December 2022, an increase of 4% year-over-year.
  • Facebook monthly active users (MAUs) – MAUs were 2.96 billion as of December 31, 2022, an increase of 2% year-over-year.
  • Ad impressions and price per ad – In the fourth quarter of 2022, ad impressions delivered across our Family of Apps increased by 23% year-over-year and the average price per ad decreased by 22% year-over-year. For the full year 2022, ad impressions increased by 18% year-over-year and the average price per ad decreased by 16% year-over-year.
  • Revenue – Revenue was $32.17 billion and $116.61 billion, a decrease of 4% and 1% year-over-year for the fourth quarter and full year 2022, respectively. Had foreign exchange rates remained constant with the same periods of 2021, revenue would have been $2.01 billion and $5.96 billion higher, an increase of 2% and 4% on a constant currency basis for the fourth quarter and full year 2022, respectively.
  • Costs and expenses – Total costs and expenses were $25.77 billion and $87.66 billion, an increase of 22% and 23% year-over-year for the fourth quarter and full year 2022, respectively. This includes charges related to our restructuring efforts of $4.20 billion and $4.61 billion in the fourth quarter and full year 2022, respectively.
  • Capital expenditures – Capital expenditures, including principal payments on finance leases, were $9.22 billion and $32.04 billion for the fourth quarter and full year 2022, respectively.
  • Share repurchases – We repurchased $6.91 billion and $27.93 billion of our Class A common stock in the fourth quarter and full year 2022, respectively. As of December 31, 2022, we had $10.87 billion available and authorized for repurchases. We also announced today a $40 billion increase in our share repurchase authorization.
  • Cash, cash equivalents, and marketable securities – Cash, cash equivalents, and marketable securities were $40.74 billion as of December 31, 2022.
  • Long-term debt – Long-term debt was $9.92 billion as of December 31, 2022.
  • Headcount – Headcount was 86,482 as of December 31, 2022, an increase of 20% year-over-year. Our reported headcount includes a substantial majority of the approximately 11,000 employees impacted by the layoff we announced in November 2022, who will no longer be reflected in our headcount by the end of the first quarter of 2023.

Restructuring

During the quarter ended December 31, 2022, we took several measures to pursue greater efficiency and to realign our business and strategic priorities. This includes a facilities consolidation strategy to sublease, early terminate, or abandon several office buildings under operating leases, a layoff of approximately 11,000 of our employees across the FoA and RL segments, and a pivot towards a next generation data center design, including cancellation of multiple data center projects.

A summary of our restructuring charges during the three months ended December 31, 2022 by major activity type is as follows (in millions):


Facilities
Consolidation


Severance and
Other Personnel
Costs


Data Center 
Assets


Total

Cost of revenue

$                 121


$                   —


$              1,341


$             1,462

Research and development

1,080


408



1,488

Marketing and sales

330


234



564

General and administrative

351


333



684

Total

$             1,882


$                 975


$              1,341


$             4,198

Total restructuring charges recorded under our FoA segment were $3.76 billion and RL segment were $440 million during the fourth quarter of 2022. Excluding these charges, our operating margin would have been 13 percentage points higher, our effective tax rate would have been one percentage point lower, and our diluted EPS would have been $1.24 higher for the fourth quarter of 2022. The impact of the severance and other personnel costs recorded in the fourth quarter of 2022 was not material after offsetting with the savings from the decreases in payroll, bonus and other benefits expenses.

CFO Outlook Commentary

We expect first quarter 2023 total revenue to be in the range of $26-28.5 billion. Our guidance assumes foreign currency will be an approximately 2% headwind to year-over-year total revenue growth in the first quarter, based on current exchange rates.

We anticipate our full-year 2023 total expenses will be in the range of $89-95 billion, lowered from our prior outlook of $94-100 billion due to slower anticipated growth in payroll expenses and cost of revenue. We now expect to record an estimated $1 billion in restructuring charges in 2023 related to consolidating our office facilities footprint. This is down from our prior estimate of $2 billion as we recorded a portion of the charges in the fourth quarter of 2022. We may incur additional restructuring charges as we progress further in our efficiency efforts.

We expect capital expenditures to be in the range of $30-33 billion, lowered from our prior estimate of $34-37 billion. The reduced outlook reflects our updated plans for lower data center construction spend in 2023 as we shift to a new data center architecture that is more cost efficient and can support both AI and non-AI workloads. Substantially all of our capital expenditures continue to support the Family of Apps.

Absent any changes to U.S. tax law, we expect our full-year 2023 tax rate percentage to be in the low twenties.

In addition, as previously noted, we continue to monitor developments regarding the viability of transatlantic data transfers and their potential impact on our European operations.

Webcast and Conference Call Information

Meta will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast of Meta's earnings conference call can be accessed at investor.fb.com, along with the earnings press release, financial tables, and slide presentation. Meta uses the investor.fb.com and about.fb.com/news/ websites as well as Mark Zuckerberg's Facebook Page (facebook.com/zuck) and Instagram account (instagram.com/zuck) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at +1 (800) 633-8284 or +1 (402) 977-9140, conference ID 22025147.

Transcripts of conference calls with publishing equity research analysts held today will also be posted to the investor.fb.com website.

About Meta

Meta builds technologies that help people connect, find communities, and grow businesses. When Facebook launched in 2004, it changed the way people connect. Apps like Messenger, Instagram and WhatsApp further empowered billions around the world. Now, Meta is moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology.

Contacts

Investors:
Deborah Crawford
investor@meta.com / investor.fb.com

Press:
Ryan Moore
press@meta.com / about.fb.com/news/

Forward-Looking Statements

This press release contains forward-looking statements regarding our future business plans and expectations. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: the impact of macroeconomic conditions on our business and financial results, including as a result of the COVID-19 pandemic and geopolitical events; our ability to retain or increase users and engagement levels; our reliance on advertising revenue; our dependency on data signals and mobile operating systems, networks, and standards that we do not control; changes to the content or application of third-party policies that impact our advertising practices; risks associated with new products and changes to existing products as well as other new business initiatives, including our metaverse efforts; our emphasis on community growth and engagement and the user experience over short-term financial results; maintaining and enhancing our brand and reputation; our ongoing privacy, safety, security, and content review efforts; competition; risks associated with government actions that could restrict access to our products or impair our ability to sell advertising in certain countries; litigation and government inquiries; privacy, legislative, and regulatory concerns or developments; risks associated with acquisitions; security breaches; and our ability to manage our scale and geographically-dispersed operations. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed with the SEC on October 27, 2022, which is available on our Investor Relations website at investor.fb.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2022. In addition, please note that the date of this press release is February 1, 2023, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: revenue excluding foreign exchange effect, advertising revenue excluding foreign exchange effect, and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.

We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

We exclude the following items from our non-GAAP financial measures:

Foreign exchange effect on revenue. We translated revenue for the three months and full year ended December 31, 2022 using the prior year's monthly exchange rates for our settlement or billing currencies other than the U.S. dollar, which we believe is a useful metric that facilitates comparison to our historical performance.

Purchases of property and equipment; Principal payments on finance leases. We subtract both purchases of property and equipment, net of proceeds and principal payments on finance leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business, regardless of whether we procure such property or equipment with a finance lease. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.

For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.

 

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)






Three Months Ended December 31,


Twelve Months Ended December 31,



2022


2021


2022


2021


Revenue

$           32,165


$           33,671


$         116,609


$         117,929


Costs and expenses:









Cost of revenue

8,336


6,348


25,249


22,649


Research and development

9,771


7,046


35,338


24,655


Marketing and sales

4,574


4,387


15,262


14,043


General and administrative

3,085


3,305


11,816


9,829


Total costs and expenses

25,766


21,086


87,665


71,176


Income from operations

6,399


12,585


28,944


46,753


Interest and other income (expense), net

(250)


117


(125)


531


Income before provision for income taxes

6,149


12,702


28,819


47,284


Provision for income taxes

1,497


2,417


5,619


7,914


Net income

$              4,652


$           10,285


$           23,200


$           39,370


Earnings per share attributable to Class A and Class B









common stockholders: 









Basic

$                1.76


$               3.72


$               8.63


$             13.99


Diluted

$                1.76


$               3.67


$               8.59


$             13.77


Weighted-average shares used to compute earnings









per share attributable to Class A and Class B common 









stockholders: 









Basic

2,638


2,765


2,687


2,815


Diluted

2,640


2,799


2,702


2,859


 Share-based compensation expense included in costs and









 expenses: 









Cost of revenue

$                 186


$                149


$                768


$                577


Research and development

2,366


1,882


9,361


7,106


Marketing and sales

239


206


1,004


837


General and administrative

217


169


859


644


Total share-based compensation expense

$              3,008


$             2,406


$          11,992


$             9,164


 

META PLATFORMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


December 31, 2022


December 31, 2021

Assets




Current assets:




Cash and cash equivalents

$                  14,681


$                  16,601

Marketable securities

26,057


31,397

Accounts receivable, net

13,466


14,039

Prepaid expenses and other current assets

5,345


4,629

Total current assets

59,549


66,666

Non-marketable equity securities

6,201


6,775

Property and equipment, net

79,518


57,809

Operating lease right-of-use assets

12,673


12,155

Intangible assets, net

897


634

Goodwill

20,306


19,197

Other assets

6,583


2,751

Total assets

$                185,727


$                165,987





Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$                    4,990


$                    4,083

Partners payable

1,117


1,052

Operating lease liabilities, current

1,367


1,127

Accrued expenses and other current liabilities

19,552


14,873

Total current liabilities

27,026


21,135

Operating lease liabilities, non-current

15,301


12,746

Long-term debt

9,923


Other liabilities

7,764


7,227

Total liabilities

60,014


41,108

Commitments and contingencies




Stockholders' equity:




Common stock and additional paid-in capital

64,444


55,811

Accumulated other comprehensive loss

(3,530)


(693)

Retained earnings

64,799


69,761

Total stockholders' equity

125,713


124,879

Total liabilities and stockholders' equity

$                185,727


$                165,987

 

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)






Three Months Ended
December 31,


Twelve Months Ended
December 31,



2022


2021


2022


2021


Cash flows from operating activities









Net income

$         4,652


$      10,285


$      23,200


$      39,370


Adjustments to reconcile net income to net cash provided by









operating activities:









Depreciation and amortization

2,376


2,014


8,686


7,967


Share-based compensation

3,008


2,406


11,992


9,164


Deferred income taxes

(1,173)


748


(3,286)


609


Impairment charges for leases and leasehold improvements

1,805



2,218



Abandonment charges for data center assets

1,341



1,341



Fair value adjustments for non-marketable securities

328


(16)


463


(232)


Other

244


50


178


105


Changes in assets and liabilities:









Accounts receivable

(1,698)


(2,038)


231


(3,110)


Prepaid expenses and other current assets

854


817


162


(1,750)


Other assets

54


(165)


(106)


(349)


Accounts payable

876


876


210


1,436


Partners payable

102


151


90


(12)


Accrued expenses and other current liabilities

1,303


2,562


4,210


3,544


Other liabilities

439


414


886


941


Net cash provided by operating activities

14,511


18,104


50,475


57,683


Cash flows from investing activities









Purchases of property and equipment

(9,043)


(5,401)


(31,431)


(18,690)


Proceeds relating to property and equipment

55


31


245


123


Purchases of marketable debt securities

(741)


(6,093)


(9,626)


(30,407)


Sales of marketable debt securities

1,750


16,340


11,083


31,671


Maturities of marketable debt securities

513


1,598


2,075


10,915


Purchases of non-marketable equity securities


(2)


(5)


(47)


Acquisitions of businesses and intangible assets

(62)


(521)


(1,312)


(851)


Other investing activities

(3)


(123)


1


(284)


Net cash provided by (used in) investing activities

(7,531)


5,829


(28,970)


(7,570)


Cash flows from financing activities









Taxes paid related to net share settlement of equity awards

(656)


(1,507)


(3,595)


(5,515)


Repurchases of Class A common stock

(6,863)


(20,063)


(27,956)


(44,537)


Proceeds from issuance of long-term debt, net



9,921



Principal payments on finance leases

(235)


(172)


(850)


(677)


Other financing activities

695



344


1


Net cash used in financing activities

(7,059)


(21,742)


(22,136)


(50,728)


Effect of exchange rate changes on cash, cash equivalents, and restricted cash      

424


(130)


(638)


(474)


Net increase (decrease) in cash, cash equivalents, and restricted cash

345


2,061


(1,269)


(1,089)


Cash, cash equivalents, and restricted cash at beginning of the period

15,251


14,804


16,865


17,954


Cash, cash equivalents, and restricted cash at end of the period

$      15,596


$      16,865


$      15,596


$      16,865











Reconciliation of cash, cash equivalents, and restricted cash to the









consolidated balance sheets 









Cash and cash equivalents

$      14,681


$      16,601


$      14,681


$      16,601


Restricted cash, included in prepaid expenses and other current assets

294


149


294


149


Restricted cash, included in other assets

621


115


621


115


Total cash, cash equivalents, and restricted cash

$      15,596


$      16,865


$      15,596


$      16,865




META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


Three Months Ended
December 31,


Twelve Months Ended
December 31,


2022


2021


2022


2021

Supplemental cash flow data








Cash paid for income taxes, net

$      1,760


$         606


$      6,407


$          8,525

Non-cash investing and financing activities:








Property and equipment in accounts payable and accrued expenses

$      3,319


$      3,404


$      3,319


$          3,404

and other current liabilities








Acquisition of businesses in accrued expenses and other current

$         291


$           73


$         291


$               73

liabilities and other liabilities








Other current assets through financing arrangement in accrued

$           16


$         508


$           16


$             508

expenses and other current liabilities








Repurchases of Class A common stock in accrued expenses and

$         310


$         340


$         310


$             340

other current liabilities








 

Segment Results

We report our financial results for our two reportable segments: Family of Apps (FoA) and Reality Labs (RL). FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services. RL includes augmented and virtual reality related consumer hardware, software, and content.

The following table presents our segment information of revenue and income (loss) from operations:

Segment Information

(In millions)

(Unaudited)


Three Months Ended December 31,


Twelve Months Ended December 31,


2022


2021


2022


2021

Revenue:








Advertising

$           31,254


$           32,639


$         113,642


$         114,934

Other revenue

184


155


808


721

Family of Apps

31,438


32,794


114,450


115,655

Reality Labs

727


877


2,159


2,274

Total revenue

$           32,165


$           33,671


$         116,609


$         117,929









Income (loss) from operations:








Family of Apps

$           10,678


$           15,889


$           42,661


$           56,946

Reality Labs

(4,279)


(3,304)


(13,717)


(10,193)

Total income from operations

$              6,399


$           12,585


$           28,944


$           46,753

                                                                                                       

Reconciliation of GAAP to Non-GAAP Results

(In millions, except percentages)

(Unaudited)


Three Months Ended
December 31,


Twelve Months Ended
December 31,


2022


2021


2022


2021

GAAP revenue

$      32,165



$      33,671


$    116,609



$    117,929

Foreign exchange effect on 2022 revenue using 2021 rates

2,012





5,956




Revenue excluding foreign exchange effect

$      34,177





$    122,565




GAAP revenue year-over-year change %

(4)

%




(1)

%



Revenue excluding foreign exchange effect year-over-year change %

2

%




4

%



GAAP advertising revenue

$      31,254



$      32,639


$    113,642



$    114,934

Foreign exchange effect on 2022 advertising revenue using 2021 rates

1,977





5,896




Advertising revenue excluding foreign exchange effect

$      33,231





$    119,538




GAAP advertising revenue year-over-year change %

(4)

%




(1)

%



Advertising revenue excluding foreign exchange effect year-over-year change %

2

%




4

%













Net cash provided by operating activities

$      14,511



$      18,104


$      50,475



$      57,683

Purchases of property and equipment, net

(8,988)



(5,370)


(31,186)



(18,567)

Principal payments on finance leases

(235)



(172)


(850)



(677)

Free cash flow

$        5,288



$      12,562


$      18,439



$      38,439

 

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SOURCE Meta