UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________ 

FORM 10-Q

____________________________________________ 

(Mark One)

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File Number: 001-35551

____________________________________________ 

Meta Platforms, Inc.

(Exact name of registrant as specified in its charter)

____________________________________________ 

Delaware	20-1665019
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1601 Willow Road, Menlo Park, California 94025

(Address of principal executive offices and Zip Code)

(650) 543-4800

(Registrant's telephone number, including area code)

 ____________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.000006 par value	META	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date.

Class		Number of Shares Outstanding
Class A Common Stock	$0.000006 par value	2,280,672,002	shares outstanding as of July 22, 2022
Class B Common Stock	$0.000006 par value	406,876,470	shares outstanding as of July 22, 2022

Meta Platforms, Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2022

TABLE OF CONTENTS

		Page
Note About Forward-Looking Statements		3
Limitations of Key Metrics and Other Data		4
PART I—FINANCIAL INFORMATION		7
Item 1.	Financial Statements (unaudited)	7
	Condensed Consolidated Balance Sheets—June 30, 2022 and December 31, 2021	7
	Condensed Consolidated Statements of Income—for the three and six months ended June 30, 2022 and 2021	8
	Condensed Consolidated Statements of Comprehensive Income—for the three and six months ended June 30, 2022 and 2021	9
	Condensed Consolidated Statements of Stockholders' Equity—for the three and six months ended June 30, 2022 and 2021	10
	Condensed Consolidated Statements of Cash Flows—for the six months ended June 30, 2022 and 2021	11
	Notes to Condensed Consolidated Financial Statements	13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	51
PART II—OTHER INFORMATION		52
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88
Item 6.	Exhibits	89
SIGNATURES		90

2

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward‑looking statements.

We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward‑looking statements.

In October 2021, we changed our corporate name from Facebook, Inc. to Meta Platforms, Inc. We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this Quarterly Report on Form 10-Q. As such, unless expressly indicated or the context requires otherwise, the terms "Meta," "company," "we," "us," and "our" in this document refer to Meta Platforms, Inc., a Delaware corporation, and, where appropriate, its subsidiaries. The term "Family" refers to our Facebook, Instagram, Messenger, and WhatsApp products. For references to accessing Meta's products on the "web" or via a "website," such terms refer to accessing such products on personal computers. For references to accessing Meta's products on "mobile," such term refers to accessing such products via a mobile application or via a mobile-optimized version of our websites such as m.facebook.com, whether on a mobile phone or tablet.

3

LIMITATIONS OF KEY METRICS AND OTHER DATA

The numbers for our key metrics are calculated using internal company data based on the activity of user accounts. We have historically reported the numbers of our daily active users (DAUs), monthly active users (MAUs), and average revenue per user (ARPU) (collectively, our "Facebook metrics") based on user activity only on Facebook and Messenger and not on our other products. Beginning with our Annual Report on Form 10-K for the year ended December 31, 2019, we also report our estimates of the numbers of our daily active people (DAP), monthly active people (MAP), and average revenue per person (ARPP) (collectively, our "Family metrics") based on the activity of users who visited at least one of Facebook, Instagram, Messenger, and WhatsApp (collectively, our "Family" of products) during the applicable period of measurement. We believe our Family metrics better reflect the size of our community and the fact that many people are using more than one of our products. As a result, over time we intend to report our Family metrics as key metrics in place of DAUs, MAUs, and ARPU in our periodic reports filed with the Securities and Exchange Commission.

While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring usage of our products across large online and mobile populations around the world. The methodologies used to measure these metrics require significant judgment and are also susceptible to algorithm or other technical errors. In addition, we are continually seeking to improve our estimates of our user base, and such estimates may change due to improvements or changes in our methodology. We regularly review our processes for calculating these metrics, and from time to time we discover inaccuracies in our metrics or make adjustments to improve their accuracy, which can result in adjustments to our historical metrics. Our ability to recalculate our historical metrics may be impacted by data limitations or other factors that require us to apply different methodologies for such adjustments. We generally do not intend to update previously disclosed Family metrics for any such inaccuracies or adjustments that are within the error margins disclosed below.

In addition, our Family metrics and Facebook metrics estimates will differ from estimates published by third parties due to differences in methodology.

Family Metrics

Many people in our community have user accounts on more than one of our products, and some people have multiple user accounts within an individual product. Accordingly, for our Family metrics, we do not seek to count the total number of user accounts across our products because we believe that would not reflect the actual size of our community. Rather, our Family metrics represent our estimates of the number of unique people using at least one of Facebook, Instagram, Messenger, and WhatsApp. We do not require people to use a common identifier or link their accounts to use multiple products in our Family, and therefore must seek to attribute multiple user accounts within and across products to individual people. To calculate these metrics, we rely upon complex techniques, algorithms and machine learning models that seek to count the individual people behind user accounts, including by matching multiple user accounts within an individual product and across multiple products when we believe they are attributable to a single person, and counting such group of accounts as one person. These techniques and models require significant judgment, are subject to data and other limitations discussed below, and inherently are subject to statistical variances and uncertainties. We estimate the potential error in our Family metrics primarily based on user survey data, which itself is subject to error as well. While we expect the error margin for our Family metrics to vary from period to period, we estimate that such margin generally will be approximately 3% of our worldwide MAP. At our scale, it is very difficult to attribute multiple user accounts within and across products to individual people, and it is possible that the actual numbers of unique people using our products may vary significantly from our estimates, potentially beyond our estimated error margins. As a result, it is also possible that our Family metrics may indicate changes or trends in user numbers that do not match actual changes or trends.

To calculate our estimates of Family DAP and MAP, we currently use a series of machine learning models that are developed based on internal reviews of limited samples of user accounts and calibrated against user survey data. We apply significant judgment in designing these models and calculating these estimates. For example, to match user accounts within individual products and across multiple products, we use data signals such as similar device information, IP addresses, and user names. We also calibrate our models against data from periodic user surveys of varying sizes and frequency across our products, which are inherently subject to error. The timing and results of such user surveys have in the past contributed, and may in the future contribute, to changes in our reported Family metrics from period to period. In addition, our data limitations may affect our understanding of certain details of our business and increase the risk of error for our Family metrics estimates.

4

Our techniques and models rely on a variety of data signals from different products, and we rely on more limited data signals for some products compared to others. For example, as a result of limited visibility into encrypted products, we have fewer data signals from WhatsApp user accounts and primarily rely on phone numbers and device information to match WhatsApp user accounts with accounts on our other products. Similarly, although Messenger Kids users are included in our Family metrics, we do not seek to match their accounts with accounts on our other applications for purposes of calculating DAP and MAP. Any loss of access to data signals we use in our process for calculating Family metrics, whether as a result of our own product decisions, actions by third-party browser or mobile platforms, regulatory or legislative requirements, or other factors, also may impact the stability or accuracy of our reported Family metrics, as well as our ability to report these metrics at all. Our estimates of Family metrics also may change as our methodologies evolve, including through the application of new data signals or technologies, product changes, or other improvements in our user surveys, algorithms, or machine learning that may improve our ability to match accounts within and across our products or otherwise evaluate the broad population of our users. In addition, such evolution may allow us to identify previously undetected violating accounts (as defined below).

We regularly evaluate our Family metrics to estimate the percentage of our MAP consisting solely of "violating" accounts. We define "violating" accounts as accounts which we believe are intended to be used for purposes that violate our terms of service, including bots and spam. In the fourth quarter of 2021, we estimated that approximately 3% of our worldwide MAP consisted solely of violating accounts. Such estimation is based on an internal review of a limited sample of accounts, and we apply significant judgment in making this determination. For example, we look for account information and behaviors associated with Facebook and Instagram accounts that appear to be inauthentic to the reviewers, but we have limited visibility into WhatsApp user activity due to encryption. In addition, if we believe an individual person has one or more violating accounts, we do not include such person in our violating accounts estimation as long as we believe they have one account that does not constitute a violating account. From time to time, we disable certain user accounts, make product changes, or take other actions to reduce the number of violating accounts among our users, which may also reduce our DAP and MAP estimates in a particular period. We intend to disclose our estimates of the percentage of our MAP consisting solely of violating accounts on an annual basis. Violating accounts are very difficult to measure at our scale, and it is possible that the actual number of violating accounts may vary significantly from our estimates.

The numbers of Family DAP and MAP discussed in this Quarterly Report on Form 10-Q, as well as ARPP, do not include users on our other products, unless they would otherwise qualify as DAP or MAP, respectively, based on their other activities on our Family products.

Facebook Metrics

We regularly evaluate our Facebook metrics to estimate the number of "duplicate" and "false" accounts among our MAUs. A duplicate account is one that a user maintains in addition to his or her principal account. We divide "false" accounts into two categories: (1) user-misclassified accounts, where users have created personal profiles for a business, organization, or non-human entity such as a pet (such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service); and (2) violating accounts, which represent user profiles that we believe are intended to be used for purposes that violate our terms of service, such as bots and spam. The estimates of duplicate and false accounts are based on an internal review of a limited sample of accounts, and we apply significant judgment in making this determination. For example, to identify duplicate accounts we use data signals such as identical IP addresses and similar user names, and to identify false accounts we look for names that appear to be fake or other behavior that appears inauthentic to the reviewers. Any loss of access to data signals we use in this process, whether as a result of our own product decisions, actions by third-party browser or mobile platforms, regulatory or legislative requirements, or other factors, also may impact the stability or accuracy of our estimates of duplicate and false accounts. Our estimates also may change as our methodologies evolve, including through the application of new data signals or technologies or product changes that may allow us to identify previously undetected duplicate or false accounts and may improve our ability to evaluate a broader population of our users. Duplicate and false accounts are very difficult to measure at our scale, and it is possible that the actual number of duplicate and false accounts may vary significantly from our estimates.

In the fourth quarter of 2021, we estimated that duplicate accounts may have represented approximately 11% of our worldwide MAUs. We believe the percentage of duplicate accounts is meaningfully higher in developing markets such as the Philippines and Vietnam, as compared to more developed markets. In the fourth quarter of 2021, we estimated that false accounts may have represented approximately 5% of our worldwide MAUs. Our estimation of false accounts can vary as a result of episodic spikes in the creation of such accounts, which we have seen originate more frequently in specific countries

5

such as Indonesia, Nigeria, and Vietnam. From time to time, we disable certain user accounts, make product changes, or take other actions to reduce the number of duplicate or false accounts among our users, which may also reduce our DAU and MAU estimates in a particular period. We intend to disclose our estimates of the number of duplicate and false accounts among our MAUs on an annual basis.

The numbers of DAUs and MAUs discussed in this Quarterly Report on Form 10-Q, as well as ARPU, do not include users on Instagram, WhatsApp, or our other products, unless they would otherwise qualify as DAUs or MAUs, respectively, based on their other activities on Facebook.

User Geography

Our data regarding the geographic location of our users is estimated based on a number of factors, such as the user's IP address and self-disclosed location. These factors may not always accurately reflect the user's actual location. For example, a user may appear to be accessing Facebook from the location of the proxy server that the user connects to rather than from the user's actual location. The methodologies used to measure our metrics are also susceptible to algorithm or other technical errors, and our estimates for revenue by user location and revenue by user device are also affected by these factors.

6

PART I—FINANCIAL INFORMATION

Item 1.Financial Statements

META PLATFORMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except for number of shares and par value)

(Unaudited)

	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	12,681	$	16,601
Marketable securities	27,808		31,397
Accounts receivable, net	11,525		14,039
Prepaid expenses and other current assets	3,973		4,629
Total current assets	55,987		66,666
Non-marketable equity securities	6,536		6,775
Property and equipment, net	67,588		57,809
Operating lease right-of-use assets	14,130		12,155
Intangible assets, net	965		634
Goodwill	20,229		19,197
Other assets	4,344		2,751
Total assets	$	169,779	$	165,987
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	4,008	$	4,083
Partners payable	982		1,052
Operating lease liabilities, current	1,275		1,127
Accrued expenses and other current liabilities	15,420		14,312
Deferred revenue and deposits	532		561
Total current liabilities	22,217		21,135
Operating lease liabilities, non-current	14,792		12,746
Other liabilities	7,003		7,227
Total liabilities	44,012		41,108
Commitments and contingencies
Stockholders' equity:
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,290 million and 2,328 million shares issued and outstanding, as of June 30, 2022 and December 31, 2021, respectively; 4,141 million Class B shares authorized, 407 million and 413 million shares issued and outstanding, as of June 30, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	59,929		55,811
Accumulated other comprehensive loss	(3,411)		(693)
Retained earnings	69,249		69,761
Total stockholders' equity	125,767		124,879
Total liabilities and stockholders' equity	$	169,779	$	165,987

See Accompanying Notes to Condensed Consolidated Financial Statements.

7

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)

 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	28,822	$	29,077	$	56,729	$	55,248
Costs and expenses:
Cost of revenue	5,192		5,399		11,197		10,530
Research and development	8,690		6,096		16,397		11,293
Marketing and sales	3,595		3,259		6,907		6,102
General and administrative	2,987		1,956		5,347		3,578
Total costs and expenses	20,464		16,710		39,848		31,503
Income from operations	8,358		12,367		16,881		23,745
Interest and other income (expense), net	(172)		146		213		271
Income before provision for income taxes	8,186		12,513		17,094		24,016
Provision for income taxes	1,499		2,119		2,942		4,124
Net income	$	6,687	$	10,394	$	14,152	$	19,892
Earnings per share attributable to Class A and Class B common stockholders:
Basic	$	2.47	$	3.67	$	5.21	$	7.00
Diluted	$	2.46	$	3.61	$	5.19	$	6.90
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
Basic	2,704		2,834		2,714		2,841
Diluted	2,713		2,877		2,729		2,881
Share-based compensation expense included in costs and expenses:
Cost of revenue	$	213	$	163	$	373	$	281
Research and development	2,606		1,967		4,547		3,376
Marketing and sales	289		239		506		413
General and administrative	243		179		424		309
Total share-based compensation expense	$	3,351	$	2,548	$	5,850	$	4,379

See Accompanying Notes to Condensed Consolidated Financial Statements.

8

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

 

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income	$	6,687	$	10,394	$	14,152	$	19,892
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax	(1,076)		169		(1,435)		(432)
Change in unrealized gain (loss) on available-for-sale investments and other, net of tax	(339)		(38)		(1,283)		(210)
Comprehensive income	$	5,272	$	10,525	$	11,434	$	19,250

See Accompanying Notes to Condensed Consolidated Financial Statements.

9

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In millions)

(Unaudited)

	Three Months Ended June 30, 2022											Three Months Ended June 30, 2021
	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity		Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total Stockholders' Equity
	Shares	Par Value										Shares	Par Value
Balances at beginning of period	2,714	$	—	$	57,512	$	(1,996)	$	67,712	$	123,228	2,841	$	—	$	51,160	$	154	$	82,343	$	133,657
Issuance of common stock	14	—		—		—		—		—		11	—		—		—		—		—
Shares withheld related to net share settlement	(5)	—		(934)		—		(68)		(1,002)		(4)	—		(863)		—		(491)		(1,354)
Share-based compensation	—	—		3,351		—		—		3,351		—	—		2,548		—		—		2,548
Share repurchases	(26)	—		—		—		(5,082)		(5,082)		(22)	—		—		—		(7,149)		(7,149)
Other comprehensive income (loss)	—	—		—		(1,415)		—		(1,415)		—	—		—		131		—		131
Net income	—	—		—		—		6,687		6,687		—	—		—		—		10,394		10,394
Balances at end of period	2,697	$	—	$	59,929	$	(3,411)	$	69,249	$	125,767	2,826	$	—	$	52,845	$	285	$	85,097	$	138,227
	Six Months Ended June 30, 2022											Six Months Ended June 30, 2021
	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity		Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings		Total Stockholders' Equity
	Shares	Par Value										Shares	Par Value
Balances at beginning of period	2,741	$	—	$	55,811	$	(693)	$	69,761	$	124,879	2,849	$	—	$	50,018	$	927	$	77,345	$	128,290
Issuance of common stock	25	—		—		—		—		—		22	—		—		—		—		—
Shares withheld related to net share settlement	(9)	—		(1,732)		—		(195)		(1,927)		(8)	—		(1,552)		—		(880)		(2,432)
Share-based compensation	—	—		5,850		—		—		5,850		—	—		4,379		—		—		4,379
Share repurchases	(60)	—		—		—		(14,469)		(14,469)		(37)	—		—		—		(11,260)		(11,260)
Other comprehensive loss	—	—		—		(2,718)		—		(2,718)		—	—		—		(642)		—		(642)
Net income	—	—		—		—		14,152		14,152		—	—		—		—		19,892		19,892
Balances at end of period	2,697	$	—	$	59,929	$	(3,411)	$	69,249	$	125,767	2,826	$	—	$	52,845	$	285	$	85,097	$	138,227

See Accompanying Notes to Condensed Consolidated Financial Statements.

10

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net income	$	14,152	$	19,892
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,135		3,958
Share-based compensation	5,850		4,379
Deferred income taxes	(1,016)		647
Other	(33)		(88)
Changes in assets and liabilities:
Accounts receivable	2,035		(517)
Prepaid expenses and other current assets	138		(2,313)
Other assets	(132)		(195)
Accounts payable	(645)		(134)
Partners payable	(33)		(133)
Accrued expenses and other current liabilities	1,943		(200)
Deferred revenue and deposits	(28)		9
Other liabilities	(94)		184
Net cash provided by operating activities	26,272		25,489
Cash flows from investing activities
Purchases of property and equipment	(13,013)		(8,944)
Proceeds relating to property and equipment	170		60
Purchases of marketable debt securities	(6,288)		(16,528)
Sales of marketable debt securities	7,713		6,337
Maturities of marketable debt securities	913		6,327
Acquisitions of businesses and intangible assets	(1,216)		(259)
Other investing activities	(17)		(62)
Net cash used in investing activities	(11,738)		(13,069)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards	(1,927)		(2,432)
Repurchases of Class A common stock	(14,739)		(11,018)
Principal payments on finance leases	(452)		(274)
Net change in overdraft in cash pooling entities	(59)		3
Other financing activities	(46)		(13)
Net cash used in financing activities	(17,223)		(13,734)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(698)		(129)
Net decrease in cash, cash equivalents, and restricted cash	(3,387)		(1,443)
Cash, cash equivalents, and restricted cash at beginning of the period	16,865		17,954
Cash, cash equivalents, and restricted cash at end of the period	$	13,478	$	16,511
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	12,681	$	16,186
Restricted cash, included in prepaid expenses and other current assets	228		201
Restricted cash, included in other assets	569		124
Total cash, cash equivalents, and restricted cash	$	13,478	$	16,511

See Accompanying Notes to Condensed Consolidated Financial Statements.

11

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended June 30,
	2022		2021
Supplemental cash flow data
Cash paid for income taxes, net	$	2,641	$	6,294
Non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities	$	4,543	$	2,249
Settlement of convertible notes with marketable equity securities	$	131	$	—
Other current assets through financing arrangement in accrued expenses and other current liabilities	$	214	$	381
Repurchases of Class A common stock in accrued expenses and other current liabilities	$	70	$	310

See Accompanying Notes to Condensed Consolidated Financial Statements.

12

META PLATFORMS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021.

The condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

The condensed consolidated financial statements include the accounts of Meta Platforms, Inc., its subsidiaries where we have controlling financial interests, and any variable interest entities for which we are deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated.

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2022.

Use of Estimates

Preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, valuation of non-marketable equity securities, income taxes, loss contingencies, including the ultimate resolution of litigation, regulatory matters, and asserted and unasserted claims, valuation of long-lived assets including goodwill, intangible assets, and property and equipment, and their associated estimated useful lives, valuation of purchase commitments, credit losses of available-for-sale debt securities and accounts receivable, fair value of financial instruments, and leases. These estimates are based on management's knowledge about current events, interpretations of regulations, and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.

In connection with our periodic reviews of the estimated useful lives of property and equipment, we extended the estimated average useful lives of a majority of the servers and network assets from four years to 4.5 years, effective the second quarter of 2022, as a result of expected longer refresh cycles in our data centers. The financial impact of this change in estimate was a reduction in depreciation expense of $252 million and an increase in net income of $206 million, or $0.08 per diluted share for the three months ended June 30, 2022. The impact from the change in our estimates was calculated based on the servers and network assets existing as of the effective date of the change and applying the revised estimated useful lives prospectively.

Significant Accounting Policies

There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

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Recently Adopted Accounting Pronouncements

On January 1, 2022, we early adopted Accounting Standards Update (ASU) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606). The adoption of this new standard did not have a material impact on our condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2021, the Financial Accounting Standards Board (FASB) issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosure by Business Entities about Government Assistance (ASU 2021-10), which requires the disclosure of government assistance received by most business entities relating to: (1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity's financial statements. This guidance will be effective for our annual financial statements for the year ended December 31, 2022. We are currently evaluating the impact of the new guidance on our consolidated financial statements.

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03), which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. The adoption of this new standard will not have a material impact on our condensed consolidated financial statements.

Note 2. Revenue

Revenue disaggregated by revenue source and by segment consists of the following (in millions). For comparative purposes, amounts in the prior periods have been recast:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Advertising	$	28,152	$	28,580	$	55,150	$	54,018
Other revenue	218		192		433		391
Family of Apps	28,370		28,772		55,583		54,409
Reality Labs	452		305		1,146		839
Total revenue	$	28,822	$	29,077	$	56,729	$	55,248

Revenue disaggregated by geography, based on the addresses of our customers, consists of the following (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
United States and Canada (1)	$	12,186	$	12,612	$	23,965	$	24,048
Europe (2)	6,650		7,220		13,288		13,604
Asia-Pacific	6,960		6,677		13,682		12,778
Rest of World (2)	3,026		2,568		5,794		4,818
Total revenue	$	28,822	$	29,077	$	56,729	$	55,248

____________________________________

(1)    United States revenue was $11.43 billion and $11.82 billion for the three months ended June 30, 2022 and 2021, respectively, and $22.52 billion and $22.57 billion for the six months ended June 30, 2022 and 2021, respectively.

(2)    Europe includes Russia and Turkey, and Rest of World includes Africa, Latin America, and the Middle East.

Our total deferred revenue was $549 million and $596 million as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, we expect $482 million of our deferred revenue to be realized in less than a year.

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Note 3. Earnings per Share

We compute earnings per share (EPS) of Class A and Class B common stock using the two-class method. As the liquidation and dividend rights for both Class A and Class B common stock are identical, the undistributed earnings are allocated on a proportionate basis to the weighted-average number of common shares outstanding for the period.

Basic EPS is computed by dividing net income by the weighted-average number of shares of our Class A and Class B common stock outstanding.

For the calculation of diluted EPS, net income for basic EPS is adjusted by the effect of dilutive securities, including awards under our equity compensation plan.

In addition, the computation of the diluted EPS of Class A common stock assumes the conversion of our Class B common stock to Class A common stock, while the diluted EPS of Class B common stock does not assume the conversion of those shares to Class A common stock. Diluted EPS is computed by dividing the resulting net income by the weighted-average number of fully diluted common shares outstanding.

For the three and six months ended June 30, 2022, 118 million and 87 million shares of Class A common stock equivalents of restricted stock units (RSUs), respectively, were excluded from the diluted EPS calculation as including them would have an anti-dilutive effect. RSUs with anti-dilutive effect were not material for the three and six months ended June 30, 2021.

Basic and diluted EPS are the same for each class of common stock because they are entitled to the same liquidation and dividend rights.

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The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in millions, except per share amounts): 

	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B
Basic EPS:
Numerator
Net income	$	5,673	$	1,014	$	8,785	$	1,609	$	12,009	$	2,143	$	16,810	$	3,082
Denominator
Shares used in computation of basic earnings per share	2,294		410		2,395		439		2,303		411		2,401		440
Basic EPS	$	2.47	$	2.47	$	3.67	$	3.67	$	5.21	$	5.21	$	7.00	$	7.00
Diluted EPS:
Numerator
Net income	$	5,673	$	1,014	$	8,785	$	1,609	$	12,009	$	2,143	$	16,810	$	3,082
Reallocation of net income as a result of conversion of Class B to Class A common stock	1,014		—		1,609		—		2,143		—		3,082		—
Reallocation of net income to Class B common stock	—		(4)		—		(24)		—		(11)		—		(44)
Net income for diluted EPS	$	6,687	$	1,010	$	10,394	$	1,585	$	14,152	$	2,132	$	19,892	$	3,038
Denominator
Shares used in computation of basic earnings per share	2,294		410		2,395		439		2,303		411		2,401		440
Conversion of Class B to Class A common stock	410		—		439		—		411		—		440		—
Weighted-average effect of dilutive RSUs	9		—		43		—		15		—		40		—
Shares used in computation of diluted earnings per share	2,713		410		2,877		439		2,729		411		2,881		440
Diluted EPS	$	2.46	$	2.46	$	3.61	$	3.61	$	5.19	$	5.19	$	6.90	$	6.90

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Note 4. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash

The following table sets forth the cash, cash equivalents, and marketable securities by major security type, and restricted cash (in millions):

	June 30, 2022		December 31, 2021
Cash and cash equivalents:
Cash	$	6,322	$	7,308
Money market funds	3,879		8,850
U.S. government securities	624		25
U.S. government agency securities	1,122		108
Certificates of deposit and time deposits	356		250
Corporate debt securities	378		60
Total cash and cash equivalents	12,681		16,601
Marketable securities:
Marketable debt securities:
U.S. government securities	9,252		10,901
U.S. government agency securities	5,095		5,927
Corporate debt securities	13,336		14,569
Total marketable debt securities	27,683		31,397
Marketable equity securities	125		—
Total marketable securities	27,808		31,397
Restricted cash:
Restricted cash included in prepaid expenses and other current assets	228		149
Restricted cash included in other assets	569		115
Total restricted cash	797		264
Total cash, cash equivalents, marketable securities, and restricted cash	$	41,286	$	48,262

The following table summarizes our available-for-sale marketable debt securities and cash equivalents with unrealized losses as of June 30, 2022, aggregated by major security type and the length of time that individual securities have been in a continuous loss position (in millions):

	June 30, 2022
	Less than 12 months				12 months or greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government securities	$	8,599	$	(301)	$	212	$	(13)	$	8,811	$	(314)
U.S. government agency securities	4,414		(132)		1,744		(131)		6,158		(263)
Corporate debt securities	12,200		(700)		666		(53)		12,866		(753)
Total	$	25,213	$	(1,133)	$	2,622	$	(197)	$	27,835	$	(1,330)

The gross unrealized gains on our marketable debt securities and cash equivalents were not material as of June 30, 2022 and December 31, 2021. The gross unrealized losses were $1.33 billion as of June 30, 2022, and not material as of December 31, 2021, respectively. The allowance for credit losses on our marketable debt securities was not material as of June 30, 2022 and December 31, 2021.

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The following table classifies our marketable debt securities by contractual maturities (in millions):

	June 30, 2022
Due within one year	$	3,276
Due after one year to five years	24,407
Total	$	27,683

Note 5. Non-marketable Equity Securities

Our non-marketable equity securities are investments in privately-held companies without readily determinable fair values. The following table summarizes our non-marketable equity securities that were measured using measurement alternative and equity method (in millions):

	June 30, 2022		December 31, 2021
Non-marketable equity securities under measurement alternative:
Initial cost	$	6,385	$	6,480
Cumulative upward adjustments	293		311
Cumulative impairment/downward adjustments	(176)		(50)
Carrying value	6,502		6,741
Non-marketable equity securities under equity method	34		34
Total	$	6,536	$	6,775

As of June 30, 2022, we had $264 million of equity investment in Giphy. Due to regulatory restrictions, we do not control or exercise significant influence over Giphy. Based on the future outcome of developments with regulatory authorities, we may not be able to recover our carrying value in the event of a divestiture.

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Note 6. Fair Value Measurements

The following table summarizes our assets measured at fair value on a recurring basis and the classification by level of input within the fair value hierarchy (in millions):

			Fair Value Measurement at Reporting Date Using
Description	June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Money market funds	$	3,879	$	3,879	$	—	$	—
U.S. government securities	624		624		—		—
U.S. government agency securities	1,122		1,122		—		—
Certificates of deposit and time deposits	356		—		356		—
Corporate debt securities	378		—		378		—
Marketable debt securities:
U.S. government securities	9,252		9,252		—		—
U.S. government agency securities	5,095		5,095		—		—
Corporate debt securities	13,336		—		13,336		—
Marketable equity securities	125		5