Meta Reports Fourth Quarter and Full Year 2021 Results

February 2, 2022

MENLO PARK, Calif., Feb. 2, 2022 /PRNewswire/ -- 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 %

Change


Year Ended December 31,


Year-over-
Year %

Change


In millions, except percentages and

 

2021


 

2020



 

2021


 

2020


per share amounts






Total revenue

$           33,671


$           28,072


20%


$        117,929


$          85,965


37%

Total costs and expenses

21,086


15,297


38%


71,176


53,294


34%

Income from operations

$           12,585


$           12,775


(1)%


$          46,753


$          32,671


43%

Operating margin

37%


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.

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 Ended


Year Ended December 31,


December 31,
2021


September 30,
2021


June 30,
2021


March 31,
2021


December 31,
2020


2021


2020


2019

Revenue:
















Advertising

$       32,639


$       28,276


$     28,580


$     25,439


$       27,187


$  114,934


$  84,169


$  69,655

Other revenue

155


176


192


198


168


721


657


541

Family of Apps

32,794


28,452


28,772


25,637


27,355


115,655


84,826


70,196

Reality Labs

877


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

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.

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.

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
[email protected] / investor.fb.com

Press:
Ryan Moore
[email protected] / 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 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.

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 for per share amounts)

(Unaudited)



Three Months Ended December 31,


Twelve Months Ended December 31,


2021


2020


2021


2020

Revenue

$          33,671


$          28,072


$         117,929


$           85,965

Costs and expenses:








Cost of revenue

6,348


5,210


22,649


16,692

Research and development

7,046


5,208


24,655


18,447

Marketing and sales

4,387


3,280


14,043


11,591

General and administrative

3,305


1,599


9,829


6,564

Total costs and expenses

21,086


15,297


71,176


53,294

Income from operations

12,585


12,775


46,753


32,671

Interest and other income, net

117


280


531


509

Income before provision for income taxes

12,702


13,055


47,284


33,180

Provision for income taxes

2,417


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:








Basic

2,765


2,850


2,815


2,851

Diluted

2,799


2,890


2,859


2,888

Share-based compensation expense included in costs and








expenses:








Cost of revenue

$                149


$                120


$                 577


$                 447

Research and development

1,882


1,361


7,106


4,918

Marketing and sales

206


175


837


691

General and administrative

169


128


644


480

Total share-based compensation expense

$             2,406


$             1,784


$              9,164


$              6,536

 

META PLATFORMS, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)



December 31,
2021


December 31,
2020

Assets




Current assets:




Cash and cash equivalents

$                  16,601


$                  17,576

Marketable securities

31,397


44,378

Accounts receivable, net

14,039


11,335

Prepaid expenses and other current assets

4,629


2,381

Total current assets

66,666


75,670

Equity investments

6,775


6,234

Property and equipment, net

57,809


45,633

Operating lease right-of-use assets

12,155


9,348

Intangible assets, net

634


623

Goodwill

19,197


19,050

Other assets

2,751


2,758

Total assets

$                165,987


$                159,316





Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$                    4,083


$                    1,331

Partners payable

1,052


1,093

Operating lease liabilities, current

1,127


1,023

Accrued expenses and other current liabilities

14,312


11,152

Deferred revenue and deposits

561


382

Total current liabilities

21,135


14,981

Operating lease liabilities, non-current

12,746


9,631

Other liabilities

7,227


6,414

Total liabilities

41,108


31,026

Commitments and contingencies




Stockholders' equity:




Common stock and additional paid-in capital

55,811


50,018

Accumulated other comprehensive income (loss)

(693)


927

Retained earnings

69,761


77,345

Total stockholders' equity

124,879


128,290

Total liabilities and stockholders' equity

$                165,987


$                159,316

 

META PLATFORMS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2021


2020


2021


2020

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 amortization

2,014


1,863


7,967


6,862

Share-based compensation

2,406


1,784


9,164


6,536

Deferred income taxes

748


(377)


609


(1,192)

Other

34


62


(127)


118

Changes in assets and liabilities:








Accounts receivable

(2,038)


(3,059)


(3,110)


(1,512)

Prepaid expenses and other current assets

817


225


(1,750)


135

Other assets

(165)


(25)


(349)


(34)

Accounts payable

876


(56)


1,436


(17)

Partners payable

151


278


(12)


178

Accrued expenses and other current liabilities

2,462


2,218


3,357


(1,054)

Deferred revenue and deposits

100


(3)


187


108

Other liabilities

414


(89)


941


(527)

Net cash provided by operating activities

18,104


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 securities

16,340


2,008


31,671


11,787

Maturities of marketable securities

1,598


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 activities

5,829


(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 cash

2,061


5,975


(1,089)


(1,325)

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

14,804


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 assets

149


241


149


241

Restricted cash, included in other assets

115


137


115


137

Total cash, cash equivalents, and restricted cash

$      16,865


$      17,954


$     16,865


$     17,954

 

META PLATFORMS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2021


2020


2021


2020

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

 

Reconciliation of GAAP to Non-GAAP Results


(In millions, except percentages)

(Unaudited)



Three Months Ended
December 31,


Twelve Months Ended
December 31,


2021


2020


2021


2020

GAAP revenue

$       33,671


$       28,072


$     117,929


$       85,965

Foreign exchange effect on 2021 revenue using 2020 rates

307




(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 rates

306




(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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