MENLO
PARK, Calif., April 26,
2023 /PRNewswire/ -- Meta Platforms, Inc. (Nasdaq:
META) today reported financial results for the quarter ended
March 31, 2023.
"We had a good quarter and our community continues to grow,"
said Mark Zuckerberg, Meta founder
and CEO. "Our AI work is driving good results across our apps and
business. We're also becoming more efficient so we can build better
products faster and put ourselves in a stronger position to deliver
our long term vision."
First Quarter 2023 Financial Highlights
|
|
Three Months Ended
March 31,
|
|
%
Change
|
In millions, except
percentages and per share amounts
|
|
2023
|
|
2022
|
|
Revenue
|
|
$
28,645
|
|
$
27,908
|
|
3 %
|
Costs and
expenses
|
|
21,418
|
|
19,384
|
|
10 %
|
Income from
operations
|
|
$
7,227
|
|
$
8,524
|
|
(15) %
|
Operating
margin
|
|
25 %
|
|
31 %
|
|
|
Provision for income
taxes
|
|
$
1,598
|
|
$
1,443
|
|
11 %
|
Effective tax
rate
|
|
22 %
|
|
16 %
|
|
|
Net income
|
|
$
5,709
|
|
$
7,465
|
|
(24) %
|
Diluted earnings per
share (EPS)
|
|
$
2.20
|
|
$
2.72
|
|
(19) %
|
First Quarter 2023 Operational and Other
Financial Highlights
- Family daily active people (DAP) – DAP was 3.02 billion
on average for March 2023, an
increase of 5% year-over-year.
- Family monthly active people (MAP) – MAP was 3.81
billion as of March 31, 2023, an
increase of 5% year-over-year.
- Facebook daily active users (DAUs) – DAUs were 2.04
billion on average for March 2023, an
increase of 4% year-over-year.
- Facebook monthly active users (MAUs) – MAUs were 2.99
billion as of March 31, 2023, an
increase of 2% year-over-year.
- Ad impressions and price per ad – In the first quarter
of 2023, ad impressions delivered across our Family of Apps
increased by 26% year-over-year and the average price per ad
decreased by 17% year-over-year.
- Revenue – Revenue was $28.65
billion, an increase of 3% year-over-year, and an increase
of 6% year-over-year on a constant currency basis.
- Costs and expenses – Total costs and expenses were
$21.42 billion, an increase of 10%
year-over-year. This includes charges related to our restructuring
efforts of $1.14 billion in the first
quarter of 2023.
- Capital expenditures – Capital expenditures, including
principal payments on finance leases, were $7.09 billion for the first quarter of 2023.
- Share repurchases – We repurchased $9.22 billion of our Class A common stock in the
first quarter of 2023. As of March 31,
2023, we had $41.73 billion
available and authorized for repurchases.
- Cash, cash equivalents, and marketable securities –
Cash, cash equivalents, and marketable securities were $37.44 billion as of March
31, 2023.
- Long-term debt – Long-term debt was $9.92 billion as of March
31, 2023.
- Headcount – Headcount was 77,114 as of March 31, 2023, a decrease of 1% year-over-year.
Substantially all employees impacted by the layoff announced in
November 2022 are no longer reflected
in our reported headcount as of March 31,
2023. Further, the employees that would be impacted by the
2023 layoffs are included in our reported headcount as of
March 31, 2023.
Restructuring
In 2022, we initiated several measures to pursue greater
efficiency and to realign our business and strategic priorities. As
of March 31, 2023, we have substantially completed the 2022
employee layoffs while continuing to assess facilities
consolidation and data center restructuring initiatives. We
incurred additional pre-tax restructuring charges of
$621 million in the first quarter of 2023.
In March 2023, we announced three
rounds of planned layoffs to further reduce our company size by
approximately 10,000 employees across the Family of Apps (FoA) and Reality Labs (RL) segments.
In connection with these layoffs, we expect to incur total pre-tax
severance and related personnel costs of approximately $1 billion, of which $523 million was
recognized during the first quarter of 2023 and the remaining
charges will be substantially recorded by the end of 2023.
A summary of our restructuring charges for the three months
ended March 31, 2023 by major activity type is as
follows (in millions):
|
|
Three Months Ended
March 31, 2023
|
|
|
Severance and
Other Personnel
Costs (1)
|
|
Facilities
Consolidation
|
|
Data
Center
Assets
(2)
|
|
Total
|
Cost of
revenue
|
|
$
—
|
|
$
58
|
|
$
(168)
|
|
$
(110)
|
Research and
development
|
|
320
|
|
484
|
|
—
|
|
804
|
Marketing and
sales
|
|
3
|
|
136
|
|
—
|
|
139
|
General and
administrative
|
|
182
|
|
129
|
|
—
|
|
$
311
|
Total
|
|
$
505
|
|
$
807
|
|
$
(168)
|
|
$
1,144
|
____________________________
|
(1)
|
Includes severance and
personnel costs of $523 million related to the 2023 layoffs and $18
million reduction in severance estimates related to the 2022
layoff.
|
(2)
|
Relates to a change in
estimates in our data center restructuring charges recorded during
the three months ended December 31, 2022.
|
Total restructuring charges recorded under our FoA segment were
$934 million and RL segment were $210 million during the
first quarter of 2023. Excluding these charges, our operating
margin would have been four percentage points higher and our
diluted EPS would have been $0.44
higher for the first quarter of 2023.
CFO Outlook Commentary
We expect second quarter 2023 total revenue to be in the range
of $29.5-32 billion. Our guidance
assumes foreign currency headwinds will be less than 1% to
year-over-year total revenue growth in the second quarter, based on
current exchange rates.
We anticipate our full-year 2023 total expenses will be in the
range of $86-90 billion, updated from
our prior outlook provided in March. This outlook includes
$3-5 billion of restructuring costs
related to facilities consolidation charges and severance and other
personnel costs. We continue to expect Reality Labs operating
losses to increase year-over-year in 2023.
We expect capital expenditures to be in the range of
$30-33 billion, unchanged from our
prior estimate. This outlook reflects our ongoing build out of AI
capacity to support ads, Feed and Reels, along with an increased
investment in capacity for our generative AI initiatives.
Absent any changes to U.S. tax law, we expect our full year 2023
tax rate percentage to be around 20%.
In addition, we continue to monitor ongoing regulatory
developments. We expect the Irish Data Protection Commission (IDPC)
to issue a decision in May in its previously disclosed inquiry
relating to transatlantic data transfers of Facebook EU/EEA user
data, including a suspension order for such transfers and a fine.
Our ongoing consultations with policymakers on both sides of the
Atlantic continue to indicate that the proposed new EU-U.S. Data
Privacy Framework will be fully implemented before the deadline for
suspension of such transfers, but we cannot exclude the possibility
that it will not be completed in time. We will also evaluate
whether and to what extent the IDPC decision could otherwise impact
our data processing operations even after a new data privacy
framework is in force.
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 22026502.
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 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 (including the impact of the pending decision by
the IDPC and the pending EU-U.S. Data Privacy Framework); 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 Annual Report on
Form 10-K filed with the SEC on February 2,
2023, 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 Quarterly
Report on Form 10-Q for the quarter ended March 31, 2023. In
addition, please note that the date of this press release is
April 26, 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 ended March 31, 2023 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
March 31,
|
|
2023
|
|
2022
|
Revenue
|
$
28,645
|
|
$
27,908
|
Costs and
expenses:
|
|
|
|
Cost of
revenue
|
6,108
|
|
6,005
|
Research and
development
|
9,381
|
|
7,707
|
Marketing and
sales
|
3,044
|
|
3,312
|
General and
administrative
|
2,885
|
|
2,360
|
Total costs and
expenses
|
21,418
|
|
19,384
|
Income from
operations
|
7,227
|
|
8,524
|
Interest and other
income, net
|
80
|
|
384
|
Income before provision
for income taxes
|
7,307
|
|
8,908
|
Provision for income
taxes
|
1,598
|
|
1,443
|
Net
income
|
$
5,709
|
|
$
7,465
|
Earnings per share
attributable to Class A and Class B common
stockholders:
|
|
|
|
Basic
|
$
2.21
|
|
$
2.74
|
Diluted
|
$
2.20
|
|
$
2.72
|
Weighted-average
shares used to compute earnings per share attributable to Class
A
and Class B common stockholders:
|
|
|
|
Basic
|
2,587
|
|
2,725
|
Diluted
|
2,596
|
|
2,742
|
|
|
|
META PLATFORMS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
millions)
|
(Unaudited)
|
|
March 31,
2023
|
|
December 31,
2022
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
11,551
|
|
$
14,681
|
Marketable
securities
|
25,888
|
|
26,057
|
Accounts receivable,
net
|
11,044
|
|
13,466
|
Prepaid expenses and
other current assets
|
4,000
|
|
5,345
|
Total current
assets
|
52,483
|
|
59,549
|
Non-marketable equity
securities
|
6,167
|
|
6,201
|
Property and equipment,
net
|
84,156
|
|
79,518
|
Operating lease
right-of-use assets
|
12,899
|
|
12,673
|
Intangible assets,
net
|
949
|
|
897
|
Goodwill
|
20,649
|
|
20,306
|
Other assets
|
7,188
|
|
6,583
|
Total
assets
|
$
184,491
|
|
$
185,727
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
3,672
|
|
$
4,990
|
Partners
payable
|
885
|
|
1,117
|
Operating lease
liabilities, current
|
1,479
|
|
1,367
|
Accrued expenses and
other current liabilities
|
19,345
|
|
19,552
|
Total current
liabilities
|
25,381
|
|
27,026
|
Operating lease
liabilities, non-current
|
16,171
|
|
15,301
|
Long-term
debt
|
9,925
|
|
9,923
|
Other
liabilities
|
8,219
|
|
7,764
|
Total
liabilities
|
59,696
|
|
60,014
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock and
additional paid-in capital
|
66,535
|
|
64,444
|
Accumulated other
comprehensive loss
|
(2,981)
|
|
(3,530)
|
Retained
earnings
|
61,241
|
|
64,799
|
Total stockholders'
equity
|
124,795
|
|
125,713
|
Total liabilities
and stockholders' equity
|
$
184,491
|
|
$
185,727
|
|
|
|
META PLATFORMS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
5,709
|
|
$
7,465
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
2,524
|
|
2,156
|
Share-based
compensation
|
3,051
|
|
2,498
|
Deferred income
taxes
|
(620)
|
|
(563)
|
Impairment charges for
facilities consolidation
|
770
|
|
—
|
Other
|
(7)
|
|
(221)
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
2,546
|
|
2,557
|
Prepaid expenses and
other current assets
|
821
|
|
573
|
Other
assets
|
30
|
|
(108)
|
Accounts
payable
|
(1,104)
|
|
(882)
|
Partners
payable
|
(240)
|
|
(105)
|
Accrued expenses and
other current liabilities
|
334
|
|
763
|
Other
liabilities
|
184
|
|
(57)
|
Net cash provided
by operating activities
|
13,998
|
|
14,076
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and equipment
|
(6,842)
|
|
(5,441)
|
Proceeds relating to
property and equipment
|
19
|
|
126
|
Purchases of
marketable debt securities
|
(85)
|
|
(4,068)
|
Maturities and sales
of marketable debt securities
|
534
|
|
5,467
|
Acquisitions of
businesses and intangible assets
|
(444)
|
|
(853)
|
Other investing
activities
|
75
|
|
(10)
|
Net cash used in
investing activities
|
(6,743)
|
|
(4,779)
|
Cash flows from
financing activities
|
|
|
|
Taxes paid related to
net share settlement of equity awards
|
(1,009)
|
|
(925)
|
Repurchases of Class A
common stock
|
(9,365)
|
|
(9,506)
|
Principal payments on
finance leases
|
(264)
|
|
(233)
|
Other financing
activities
|
122
|
|
4
|
Net cash used in
financing activities
|
(10,516)
|
|
(10,660)
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
85
|
|
(149)
|
Net decrease in cash,
cash equivalents, and restricted cash
|
(3,176)
|
|
(1,512)
|
Cash, cash equivalents,
and restricted cash at beginning of the period
|
15,596
|
|
16,865
|
Cash, cash
equivalents, and restricted cash at end of the
period
|
$
12,420
|
|
$
15,353
|
|
|
|
|
Reconciliation of
cash, cash equivalents, and restricted cash to the condensed
consolidated balance sheets
|
|
|
|
Cash and cash
equivalents
|
$
11,551
|
|
$
14,886
|
Restricted cash,
included in prepaid expenses and other current assets
|
224
|
|
294
|
Restricted cash,
included in other assets
|
645
|
|
173
|
Total cash, cash
equivalents, and restricted cash
|
$
12,420
|
|
$
15,353
|
|
|
|
META PLATFORMS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
millions)
|
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
Supplemental cash
flow data
|
|
|
|
Cash paid for income
taxes, net
|
$
405
|
|
$
|
502
|
Cash paid for
interest, net of amounts capitalized
|
$
182
|
|
$
|
—
|
Non-cash investing and
financing activities:
|
|
|
|
|
|
Property and equipment
in accounts payable and accrued expenses and other current
liabilities
|
$
4,466
|
|
$
|
3,709
|
Acquisition of
businesses in accrued expenses and other current liabilities and
other liabilities
|
$
263
|
|
$
|
73
|
Settlement of
convertible notes in exchange of equity securities in other current
assets
|
$
—
|
|
$
|
131
|
Other current assets
through financing arrangement in accrued expenses and other current
liabilities
|
$
11
|
|
$
|
659
|
Repurchases of Class A
common stock in accrued expenses and other current
liabilities
|
$
86
|
|
$
|
221
|
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
March 31,
|
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
|
Advertising
|
|
$
28,101
|
|
$
26,998
|
Other
revenue
|
|
205
|
|
215
|
Family of
Apps
|
|
28,306
|
|
27,213
|
Reality Labs
|
|
339
|
|
695
|
Total
revenue
|
|
$
28,645
|
|
$
27,908
|
|
|
|
|
|
Income (loss) from
operations:
|
|
|
|
|
Family of
Apps
|
|
$
11,219
|
|
$
11,484
|
Reality
Labs
|
|
(3,992)
|
|
(2,960)
|
Total income from
operations
|
|
$
7,227
|
|
$
8,524
|
|
|
|
Reconciliation of
GAAP to Non-GAAP Results
|
(In millions, except
percentages)
|
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
2023
|
|
2022
|
GAAP revenue
|
|
$
28,645
|
|
$
27,908
|
Foreign exchange
effect on 2023 revenue using 2022 rates
|
|
816
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
29,461
|
|
|
GAAP revenue
year-over-year change %
|
|
3 %
|
|
|
Revenue excluding
foreign exchange effect year-over-year change %
|
|
6 %
|
|
|
GAAP advertising
revenue
|
|
$
28,101
|
|
$
26,998
|
Foreign exchange
effect on 2023 advertising revenue using 2022 rates
|
|
806
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
28,907
|
|
|
GAAP advertising
revenue year-over-year change %
|
|
4 %
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change %
|
|
7 %
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
13,998
|
|
$
14,076
|
Purchases of property
and equipment, net
|
|
(6,823)
|
|
(5,315)
|
Principal payments on
finance leases
|
|
(264)
|
|
(233)
|
Free cash
flow
|
|
$
6,911
|
|
$
8,528
|
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multimedia:https://www.prnewswire.com/news-releases/meta-reports-first-quarter-2023-results-301808794.html
SOURCE Meta