Meta Platforms(US:META)2024-08-01 00:14Financial Performance - Total revenue for Q2 2024 was $39.07 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]. - Total revenue for the three months ended June 30, 2024, was $39.071 billion, a 22% increase from $31.999 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 $31.498 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 $13.465 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 $6.20 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 $10.42 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 $14.37 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 $6.32 billion [243]. - The company anticipates capital expenditures of approximately $37 billion to $40 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 $17.03 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 $18.50 billion as of June 30, 2024, with future interest payment obligations of $848 million short-term and $15.97 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 $9.344 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].