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Meta Platforms(META) - 2024 Q2 - Quarterly Report
METAMeta Platforms(META)2024-08-01 00:14
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Financial Performance - Total revenue for Q2 2024 was 39.07billion,a2239.07 billion, a 22% increase compared to Q2 2023, driven by advertising revenue growth [241]. - Net income for Q2 2024 was 13.47 billion, with diluted earnings per share (EPS) of 5.16[243].−TotalrevenueforthethreemonthsendedJune30,2024,was5.16 [243]. - Total revenue for the three months ended June 30, 2024, was 39.071 billion, a 22% increase from 31.999billioninthesameperiodof2023[316].−Advertisingrevenueincreasedto31.999 billion in the same period of 2023 [316]. - Advertising revenue increased to 38.329 billion for the three months ended June 30, 2024, up 22% from 31.498billionyear−over−year[317].−Totalincomefromoperationsroseto31.498 billion year-over-year [317]. - Total income from operations rose to 14.85 billion, a 58% increase year-over-year for the three months ended June 30, 2024 [367]. - Net income for the three months ended June 30, 2024, was 13.465billion,comparedto13.465 billion, compared to 7.788 billion in the same period of 2023, marking a 73% increase [316]. - Family of Apps income from operations increased by 6.20billion,or476.20 billion, or 47%, for the three months ended June 30, 2024, compared to the same period in 2023 [367]. User Engagement - Family daily active people (DAP) averaged 3.27 billion in June 2024, representing a 7% year-over-year increase [268]. - Worldwide Daily Active People (DAP) increased by 7% to 3.27 billion on average during June 2024 from 3.07 billion during June 2023 [280]. - Ad impressions delivered across the Family of Apps increased by 10% year-over-year in Q2 2024 [268]. Advertising Metrics - Average Revenue Per Person (ARPP) for the second quarter of 2024 was 11.89, a 14% increase from 10.42inthesecondquarterof2023[303].−AveragepriceperadinQ22024roseby1010.42 in the second quarter of 2023 [303]. - Average price per ad in Q2 2024 rose by 10% year-over-year [268]. - Advertising revenue for the three and six months ended June 30, 2024 increased by 6.83 billion (22%) and 14.37billion(2414.37 billion (24%) respectively compared to the same periods in 2023, driven by increases in ad impressions delivered and average price per ad [335]. - The average price per ad increased by 10% and 8% year-over-year for the three and six months ended June 30, 2024, compared to decreases of 16% and 17% in the same periods in 2023 [335]. Capital Expenditures and Investments - Capital expenditures for Q2 2024 were 8.47 billion, while share repurchases amounted to 6.32billion[243].−Thecompanyanticipatescapitalexpendituresofapproximately6.32 billion [243]. - The company anticipates capital expenditures of approximately 37 billion to 40billionin2024,withsignificantgrowthexpectedin2025tosupportAIresearchandproductdevelopmentefforts[352].−Thecompanyisinvestingsignificantlyinartificialintelligence(AI)toenhanceadvertisingperformanceanduserengagement[246].−ThecompanyisinvestingsignificantlyinAIinitiativestoenhanceadvertisingtoolsanddevelopnewproducts,whichwillrequireincreasedinvestmentininfrastructureandheadcount[292].RegulatoryandLegalIssues−TheEuropeanCommissionisinvestigatingthecompany′s"subscriptionfornoads"model,withpreliminaryfindingsindicatingnon−compliancewiththeDigitalMarketsAct[249].−MetaPlatforms,Inc.wasorderedtopay€1.2billioninfinesbytheIrishDataProtectionCommissionfornon−compliancewithGDPRregardinguserdatatransfers[392].−Thecompanyisinvolvedinvariouslegalproceedingsandregulatoryinquiriesthatmayimpactitsbusinesspracticesandfinancialcondition[415].−Thecompanyisfacingmultipleantitrustinvestigations,includingacomplaintfiledbytheFTCalleginganticompetitiveconductrelatedtoacquisitionsofInstagramandWhatsApp[424].−Thecompanyissubjecttovariousclassactionsallegingviolationsofantitrustlawsandseekingdamages,withsomecasesconsolidatedintheU.S.DistrictCourtfortheNorthernDistrictofCalifornia[424].FinancialPosition−Cash,cashequivalents,andmarketablesecuritiestotaled40 billion in 2024, with significant growth expected in 2025 to support AI research and product development efforts [352]. - The company is investing significantly in artificial intelligence (AI) to enhance advertising performance and user engagement [246]. - The company is investing significantly in AI initiatives to enhance advertising tools and develop new products, which will require increased investment in infrastructure and headcount [292]. Regulatory and Legal Issues - The European Commission is investigating the company's "subscription for no ads" model, with preliminary findings indicating non-compliance with the Digital Markets Act [249]. - Meta Platforms, Inc. was ordered to pay €1.2 billion in fines by the Irish Data Protection Commission for non-compliance with GDPR regarding user data transfers [392]. - The company is involved in various legal proceedings and regulatory inquiries that may impact its business practices and financial condition [415]. - The company is facing multiple antitrust investigations, including a complaint filed by the FTC alleging anticompetitive conduct related to acquisitions of Instagram and WhatsApp [424]. - The company is subject to various class actions alleging violations of antitrust laws and seeking damages, with some cases consolidated in the U.S. District Court for the Northern District of California [424]. Financial Position - Cash, cash equivalents, and marketable securities totaled 58.08 billion as of June 30, 2024 [243]. - Cash used in investing activities increased to 17.03billionforthesixmonthsendedJune30,2024,primarilydueto17.03 billion for the six months ended June 30, 2024, primarily due to 14.57 billion in net purchases of property and equipment [375]. - Long-term debt stood at 18.50billionasofJune30,2024,withfutureinterestpaymentobligationsof18.50 billion as of June 30, 2024, with future interest payment obligations of 848 million short-term and 15.97billionlong−term[377].−Thecompanyanticipatessufficientfundsandcashflowtomeetoperationalneedsandinvestmentsforatleastthenext12months[406].Taxation−TheeffectivetaxrateforQ22024was1115.97 billion long-term [377]. - The company anticipates sufficient funds and cash flow to meet operational needs and investments for at least the next 12 months [406]. Taxation - The effective tax rate for Q2 2024 was 11% [243]. - The effective tax rate decreased to 11% for the three months ended June 30, 2024, down from 16% in the same period of 2023 [370]. - The effective tax rate is expected to be influenced by various factors including U.S. tax benefits and changes in tax law, with potential increases in future years as jurisdictions enact legislation related to the global minimum tax regime [349]. - The company anticipates an effective tax rate in the mid-teens for the full year 2024, influenced by mandatory capitalization of research and development expenses [371]. Research and Development - Research and development expenses were 10.537 billion for the three months ended June 30, 2024, a 13% increase from 9.344billioninthesameperiodof2023[321].−Researchanddevelopmentexpensesincreasedby9.344 billion in the same period of 2023 [321]. - Research and development expenses increased by 1.19 billion (13%) and $1.79 billion (10%) for the three and six months ended June 30, 2024 compared to the same periods in 2023 [364].