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Meta Platforms, Inc. (FB) SEC Filing 8-K Material Event for the period ending Wednesday, February 2, 2022

Meta Platforms, Inc.

CIK: 1326801 Ticker: FB


Meta Reports Fourth Quarter and Full Year 2021 Results

MENLO PARK, Calif. – February 2, 2022 – Meta Platforms, Inc. (Nasdaq: FB) today reported financial results for the quarter and full year ended December 31, 2021.

"We had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow," said Mark Zuckerberg, Meta founder and CEO. "I'm encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we'll continue investing in these and other key priorities in 2022 as we work towards building the metaverse."

Fourth Quarter and Full Year 2021 Financial Highlights
Three Months Ended December 31,Year-over-Year % ChangeYear Ended December 31,Year-over-Year % Change
In millions, except percentages and per share amounts2021202020212020
Total revenue$33,671 $28,072 20 %$117,929 $85,965 37 %
Total costs and expenses21,086 15,297 38 %71,176 53,294 34 %
Income from operations$12,585 $12,775 (1)%$46,753 $32,671 43 %
Operating margin37 %46 %40 %38 %
Provision for income taxes$2,417 $1,836 32 %$7,914 $4,034 96 %
Effective tax rate 19 %14 %17 %12 %
Net income$10,285 $11,219 (8)%$39,370 $29,146 35 %
Diluted earnings per share (EPS)$3.67 $3.88 (5)%$13.77 $10.09 36 %

Fourth Quarter and Full Year 2021 Operational and Other Financial Highlights

Family daily active people (DAP) – DAP was 2.82 billion on average for December 2021, an increase of 8% year-over-year.
Family monthly active people (MAP) – MAP was 3.59 billion as of December 31, 2021, an increase of 9% year-over-year.
Facebook daily active users (DAUs) – DAUs were 1.93 billion on average for December 2021, an increase of 5% year-over-year.
Facebook monthly active users (MAUs) – MAUs were 2.91 billion as of December 31, 2021, an increase of 4% year-over-year.
Ad impressions and price per ad – In the fourth quarter of 2021, ad impressions delivered across our Family of Apps increased by 13% year-over-year and the average price per ad increased by 6% year-over-year. For the full year 2021, ad impressions increased by 10% year-over-year and the average price per ad increased by 24% year-over-year.
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $5.54 billion and $19.24 billion for the fourth quarter and full year 2021, respectively.
Share repurchases – We repurchased $19.18 billion and $44.81 billion of our Class A common stock in the fourth quarter and full year 2021, respectively. As of December 31, 2021, we had $38.79 billion available and authorized for repurchases.
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $48.0 billion as of December 31, 2021.
Headcount – Headcount was 71,970 as of December 31, 2021, an increase of 23% year-over-year.


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New Financial Reporting Segment Structure and Operating Results

Beginning in the fourth quarter of 2021, we report our financial results based on two reportable segments:

Family of Apps (FoA), which includes Facebook, Instagram, Messenger, WhatsApp and other services.
Reality Labs (RL), which includes augmented and virtual reality related consumer hardware, software and content.
Segment Information
(In millions)
(Unaudited)
Three Months EndedYear Ended December 31,
December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020202120202019
Revenue:
Advertising$32,639 $28,276 $28,580 $25,439 $27,187 $114,934 $84,169 $69,655 
Other revenue155 176 192 198 168 721 657 541 
Family of Apps32,794 28,452 28,772 25,637 27,355 115,655 84,826 70,196 
Reality Labs877 558 305 534 717 2,274 1,139 501 
Total revenue$33,671 $29,010 $29,077 $26,171 $28,072 $117,929 $85,965 $70,697 
Income (loss) from operations:
Family of Apps$15,889 $13,054 $14,799 $13,205 $14,874 $56,946 $39,294 $28,489 
Reality Labs(3,304)(2,631)(2,432)(1,827)(2,099)(10,193)(6,623)(4,503)
Total income from operations$12,585 $10,423 $12,367 $11,378 $12,775 $46,753 $32,671 $23,986 

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CFO Outlook Commentary

We expect first quarter 2022 total revenue to be in the range of $27-29 billion, which represents 3-11% year-over-year growth. We expect our year-over-year growth in the first quarter to be impacted by headwinds to both impression and price growth.

On the impressions side, we expect continued headwinds from both increased competition for people's time and a shift of engagement within our apps towards video surfaces like Reels, which monetize at lower rates than Feed and Stories.

On the pricing side, we expect growth to be negatively impacted by a few factors:

First, we will lap a period in which Apple's iOS changes were not in effect and we anticipate modestly increasing ad targeting and measurement headwinds from platform and regulatory changes.

Second, we will lap a period of strong demand in the prior year and we're hearing from advertisers that macroeconomic challenges like cost inflation and supply chain disruptions are impacting advertiser budgets.

Finally, based on current exchange rates, we expect foreign currency to be a headwind to year-over-year growth.

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

We expect 2022 total expenses to be in the range of $90-95 billion, updated from our prior outlook of $91-97 billion. Our anticipated expense growth is driven by investments in technical and product talent and infrastructure-related costs.

We expect 2022 capital expenditures, including principal payments on finance leases, to be in the range of $29-34 billion, unchanged from our prior estimate. Our planned capital expenditures are primarily driven by investments in data centers, servers, network infrastructure, and office facilities. As we discussed previously, this range reflects a significant increase in our artificial intelligence and machine learning investments, which will support a number of areas across our Family of Apps. While our Reality Labs products and services may require more infrastructure capacity in the future, they do not require substantial capacity today and, as a result, are not a significant driver of 2022 capital expenditures.

Absent any changes to U.S. tax law, we expect our full-year 2022 tax rate to be similar to the full-year 2021 rate.





3




Ticker Symbol Change to META

Meta's Class A common stock is expected to begin trading on NASDAQ under the ticker symbol 'META' in the first half of 2022. This will replace the current ticker symbol 'FB,' which has been used since the company's initial public offering in 2012, and more details on exact timing will be forthcoming. No action is required by our stockholders with respect to the ticker symbol change and it does not affect the rights of our stockholders. Our Class A common stock will continue to be listed on NASDAQ and the CUSIP number will remain unchanged.
4




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 (402) 977-9140 or +1 (800) 633-8284, conference ID 22013689.

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@fb.com / investor.fb.com

Press:
Ryan Moore
press@fb.com / about.fb.com/news/
5




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 the COVID-19 pandemic on our business and financial results; 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; 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 and regulatory concerns; risks associated with acquisitions; security breaches; and our ability to manage growth 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 26, 2021, 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, 2021. In addition, please note that the date of this press release is February 2, 2022, 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, 2021 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 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.

6




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.
7




META PLATFORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except for per share amounts)
(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2021202020212020
Revenue$33,671 $28,072 $117,929 $85,965 
Costs and expenses: 
Cost of revenue6,348 5,210 22,649 16,692 
Research and development7,046 5,208 24,655 18,447 
Marketing and sales4,387 3,280 14,043 11,591 
General and administrative3,305 1,599 9,829 6,564 
Total costs and expenses21,086 15,297 71,176 53,294 
Income from operations12,585 12,775 46,753 32,671 
Interest and other income, net117 280 531 509 
Income before provision for income taxes12,702 13,055 47,284 33,180 
Provision for income taxes2,417 1,836 7,914 4,034 
Net income$10,285 $11,219 $39,370 $29,146 
Earnings per share attributable to Class A and Class B common stockholders:
Basic$3.72 $3.94 $13.99 $10.22 
Diluted$3.67 $3.88 $13.77 $10.09 
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
Basic2,765 2,850 2,815 2,851 
Diluted2,799 2,890 2,859 2,888 
Share-based compensation expense included in costs and expenses:
Cost of revenue$149 $120 $577 $447 
Research and development1,882 1,361 7,106 4,918 
Marketing and sales206 175 837 691 
General and administrative169 128 644 480 
Total share-based compensation expense$2,406 $1,784 $9,164 $6,536 






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META PLATFORMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
December 31, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$16,601 $17,576 
Marketable securities31,397 44,378 
Accounts receivable, net14,039 11,335 
Prepaid expenses and other current assets4,629 2,381 
Total current assets66,666 75,670 
Equity investments6,775 6,234 
Property and equipment, net57,809 45,633 
Operating lease right-of-use assets12,155 9,348 
Intangible assets, net634 623 
Goodwill19,197 19,050 
Other assets2,751 2,758 
Total assets$165,987 $159,316 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$4,083 $1,331 
Partners payable1,052 1,093 
Operating lease liabilities, current1,127 1,023 
Accrued expenses and other current liabilities14,312 11,152 
Deferred revenue and deposits561 382 
Total current liabilities21,135 14,981 
Operating lease liabilities, non-current12,746 9,631 
Other liabilities7,227 6,414 
Total liabilities41,108 31,026 
Commitments and contingencies
Stockholders' equity:
Common stock and additional paid-in capital55,811 50,018 
Accumulated other comprehensive income (loss)(693)927 
Retained earnings69,761 77,345 
Total stockholders' equity124,879 128,290 
Total liabilities and stockholders' equity$165,987 $159,316 


9




META PLATFORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2021202020212020
Cash flows from operating activities
Net income$10,285 $11,219 $39,370 $29,146 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization2,014 1,863 7,967 6,862 
Share-based compensation2,406 1,784 9,164 6,536 
Deferred income taxes748 (377)609 (1,192)
Other34 62 (127)118 
Changes in assets and liabilities:
Accounts receivable(2,038)(3,059)(3,110)(1,512)
Prepaid expenses and other current assets817 225 (1,750)135 
Other assets(165)(25)(349)(34)
Accounts payable876 (56)1,436 (17)
Partners payable151 278 (12)178 
Accrued expenses and other current liabilities2,462 2,218 3,357 (1,054)
Deferred revenue and deposits100 (3)187 108 
Other liabilities414 (89)941 (527)
Net cash provided by operating activities18,104 14,040 57,683 38,747 
Cash flows from investing activities
Purchases of property and equipment(5,370)(4,613)(18,567)(15,115)
Purchases of marketable securities(6,093)(5,737)(30,407)(33,930)
Sales of marketable securities16,340 2,008 31,671 11,787 
Maturities of marketable securities1,598 3,260 10,915 13,984 
Purchases of equity investments(2)(59)(47)(6,361)
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets(521)(5)(851)(388)
Other investing activities(123)(27)(284)(36)
Net cash provided by (used in) investing activities5,829 (5,173)(7,570)(30,059)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards(1,507)(1,121)(5,515)(3,564)
Repurchases of Class A common stock(20,063)(1,928)(44,537)(6,272)
Principal payments on finance leases(172)(205)(677)(604)
Net change in overdraft in cash pooling entities— 48 14 24 
Other financing activities— — (13)124 
Net cash used in financing activities(21,742)(3,206)(50,728)(10,292)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(130)314 (474)279 
Net increase (decrease) in cash, cash equivalents, and restricted cash2,061 5,975 (1,089)(1,325)
Cash, cash equivalents, and restricted cash at beginning of the period14,804 11,979 17,954 19,279 
Cash, cash equivalents, and restricted cash at end of the period$16,865 $17,954 $16,865 $17,954 
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents$16,601 $17,576 $16,601 $17,576 
Restricted cash, included in prepaid expenses and other current assets149 241 149 241 
Restricted cash, included in other assets115 137 115 137 
Total cash, cash equivalents, and restricted cash$16,865 $17,954 $16,865 $17,954 
10




META PLATFORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2021202020212020
Supplemental cash flow data
Cash paid for income taxes, net$606 $1,107 $8,525 $4,229 
Non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities$3,404 $2,201 $3,404 $2,201 
Acquisition of businesses in accrued expenses and other current liabilities and other liabilities$73 $118 $73 $118 
Other current assets through financing arrangement in accrued expenses and other current liabilities$508 $— $508 $— 
Repurchases of Class A common stock in accrued expenses and other current liabilities$340 $68 $340 $68 





11




Reconciliation of GAAP to Non-GAAP Results
(In millions, except percentages)
(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2021202020212020
GAAP revenue$33,671 $28,072 $117,929 $85,965 
Foreign exchange effect on 2021 revenue using 2020 rates307 (1,640)
Revenue excluding foreign exchange effect$33,978 $116,289 
GAAP revenue year-over-year change %20 %37 %
Revenue excluding foreign exchange effect year-over-year change %21 %35 %
GAAP advertising revenue$32,639 $27,187 $114,934 $84,169 
Foreign exchange effect on 2021 advertising revenue using 2020 rates306 (1,620)
Advertising revenue excluding foreign exchange effect$32,945 $113,314 
GAAP advertising revenue year-over-year change %20 %37 %
Advertising revenue excluding foreign exchange effect year-over-year change %21 %35 %
Net cash provided by operating activities$18,104 $14,040 $57,683 $38,747 
Purchases of property and equipment(5,370)(4,613)(18,567)(15,115)
Principal payments on finance leases(172)(205)(677)(604)
Free cash flow (1)
$12,562 $9,222 $38,439 $23,028 
____________________________________
(1) Free cash flow in the year ended December 31, 2020 reflects the $5.0 billion FTC settlement that was paid in April 2020.


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Ticker: FB
CIK: 1326801
Form Type: 8-K Corporate News
Accession Number: 0001326801-22-000015
Submitted to the SEC: Wed Feb 02 2022 4:08:34 PM EST
Accepted by the SEC: Wed Feb 02 2022
Period: Wednesday, February 2, 2022
Industry: Computer Programming Data Processing
Events:
  1. Earnings Release
  2. Financial Exhibit

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