Common-Size Income Statement
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Meta Platforms Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The common-size income statement reveals several noteworthy trends over the five-year period. Revenue is consistently represented as 100% across all years, allowing for a clear view of expense and profit margins as percentages of sales. A significant shift in profitability is observed, alongside changes in operational expense management.
- Gross Profit
- Gross profit as a percentage of revenue demonstrates volatility, beginning at 80.79% in 2021, decreasing to 78.35% in 2022, and then recovering to 80.76% in 2023. This trend continues with increases to 81.67% in 2024 and 82.00% in 2025, indicating improving cost of revenue management in later years. The cost of revenue decreased from 19.21% to 18.00% over the period.
- Operating Expenses
- Significant changes are apparent in operating expenses. Research and development initially increased from 20.91% to 30.30% between 2021 and 2022, before declining to 28.53% in 2023, 26.67% in 2024, and stabilizing at 28.55% in 2025. Marketing and sales expenses show a substantial decrease, falling from 11.91% in 2021 to 5.97% in 2025. General and administrative expenses also decreased, moving from 8.33% to 6.05% over the same period. These reductions in operating expenses likely contributed to the later improvements in income from operations.
- Income from Operations
- Income from operations experienced a considerable decline from 39.65% in 2021 to 24.82% in 2022. However, it then rebounded, reaching 34.66% in 2023, 42.18% in 2024, and holding at 41.44% in 2025. This recovery aligns with the observed reductions in operating expenses and improved gross profit margins.
- Non-Operating Items
- Interest income increased from 0.40% to 1.53% before decreasing to 1.06%. Interest expense remained relatively small but increased steadily from -0.01% to -0.58%. Foreign currency exchange gains (losses) fluctuated, ending at 0.18% in 2025 after a loss of -0.42% in 2024. Other income (expense), net, also showed volatility, with a positive contribution of 0.67% in 2025. The net effect of interest and other income (expense) increased from 0.45% to 1.32%.
- Net Income
- Net income as a percentage of revenue mirrored the trend in income before taxes. It decreased from 33.38% in 2021 to 19.90% in 2022, then increased to 28.98% in 2023, 37.91% in 2024, and decreased slightly to 30.08% in 2025. The provision for income taxes varied, with a notable increase to 12.68% in 2025, which contributed to the slight decrease in net income percentage.
Overall, the period demonstrates a challenging year in 2022 followed by a recovery and stabilization in subsequent years. The company appears to have successfully managed its operating expenses, contributing to improved profitability. Fluctuations in non-operating items and the provision for income taxes introduce some variability in the final net income margin.