Analysis of Debt
Total Debt (Carrying Amount)
Meta Platforms Inc., balance sheet: debt
US$ in millions
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 carrying amount of total long-term debt and finance lease liabilities demonstrates a significant upward trend over the observed period. Initially, the combined value was relatively low, but experienced substantial growth from 2022 onwards.
- Overall Trend
- From 2021 to 2025, the total carrying amount increased from US$581 million to US$59,928 million. This represents a more than 100-fold increase over the five-year period, indicating a considerable reliance on debt financing.
- Long-Term Debt
- Long-term debt was not reported for 2021. However, beginning in 2022, it constituted the primary driver of the overall debt increase. The value rose from US$9,923 million in 2022 to US$58,744 million in 2025, exhibiting exponential growth. This suggests a strategic decision to leverage debt for expansion or other corporate purposes.
- Finance Lease Liabilities
- Finance lease liabilities, both current and non-current, also contributed to the overall increase, though to a lesser extent than long-term debt. Current finance lease liabilities fluctuated, increasing from US$75 million in 2021 to US$129 million in 2022, decreasing to US$90 million in 2023, then to US$76 million in 2024, and finally increasing significantly to US$308 million in 2025. Non-current finance lease liabilities showed a consistent, albeit more moderate, increase from US$506 million in 2021 to US$876 million in 2025.
- Growth Rates
- The most substantial year-over-year growth in total debt occurred between 2022 and 2023 (approximately 80% increase) and again between 2023 and 2024 (approximately 51% increase). The growth rate remained high between 2024 and 2025 (approximately 102% increase), indicating accelerating debt accumulation.
The substantial increase in long-term debt, coupled with the growth in finance lease liabilities, suggests a significant shift in the company’s capital structure towards increased financial leverage. Continued monitoring of these trends is warranted to assess potential risks and opportunities associated with this debt profile.
Total Debt (Fair Value)
| Dec 31, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Long-term debt | 57,220) |
| Finance lease liabilities | 1,184) |
| Total long-term debt and finance lease liabilities (fair value) | 58,404) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.97 |
Based on: 10-K (reporting date: 2025-12-31).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on long-term debt and finance leases: 5.53%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 4.71% | 10,000) | 471) | |
| 5.79% | 8,500) | 492) | |
| 5.60% | 10,500) | 588) | |
| 5.77% | 30,000) | 1,731) | |
| 4.10% | 1,184) | 49) | |
| Total | 60,184) | 3,331) | |
| 5.53% | |||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 3,331 ÷ 60,184 = 5.53%
Interest Costs Incurred
Meta Platforms Inc., interest costs incurred
US$ in millions
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).
Interest expense exhibited a significant upward trend over the five-year period. Initially low, it increased substantially, with a particularly pronounced rise between 2021 and 2022. This increase continued, albeit at varying rates, through 2025. A component of this expense, interest expense capitalized, began to be reported in 2023 and also demonstrated consistent growth through the analyzed period. Consequently, total interest costs incurred followed a similar trajectory, reflecting the combined effect of both components.
- Interest Expense Trend
- Interest expense began at US$15 million in 2021. It rose to US$176 million in 2022, representing a substantial increase. Further increases were observed in subsequent years, reaching US$446 million in 2023, US$715 million in 2024, and US$1,165 million in 2025. This indicates a growing reliance on debt financing or potentially increasing interest rates on existing debt.
- Capitalized Interest
- Interest expense capitalization was not present in 2021 or 2022. It first appeared in 2023 at US$283 million, and grew to US$384 million in 2024 and US$535 million in 2025. The presence of capitalized interest suggests investments in projects that qualify for interest capitalization, potentially indicating significant capital expenditure programs.
- Total Interest Costs Incurred
- Total interest costs incurred, representing the sum of interest expense and capitalized interest, mirrored the trends of its components. Starting at US$15 million in 2021, it increased to US$176 million in 2022, US$729 million in 2023, US$1,099 million in 2024, and reached US$1,700 million in 2025. The accelerating growth in total interest costs warrants further investigation into the underlying debt structure and financing activities.
The consistent growth in both interest expense and capitalized interest suggests a significant shift in the company’s financial strategy, potentially involving increased borrowing to fund operations or expansion. The increasing proportion of capitalized interest may also indicate a growing investment in long-term assets.
Adjusted Interest Coverage Ratio
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).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 87,097 ÷ 1,165 = 74.76
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 87,097 ÷ 1,700 = 51.23
The interest coverage ratios demonstrate a significant decline over the five-year period. Both the standard interest coverage ratio and the adjusted interest coverage ratio, which incorporates capitalized interest, exhibit this trend, though the adjusted ratio experiences a more pronounced decrease.
- Interest Coverage Ratio (without capitalized interest)
- In 2021, the interest coverage ratio stood at 3,153.27. A substantial decrease is observed in 2022, falling to 164.74. This downward trend continues through 2023, reaching 107.34, and further declines to 99.83 in 2024. By 2025, the ratio is reported at 74.76, representing a considerable reduction from the initial value.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio mirrors the overall decline, beginning at 3,153.27 in 2021 and decreasing to 164.74 in 2022. The reduction is more dramatic in subsequent years, dropping to 65.67 in 2023 and 64.95 in 2024. The ratio concludes the period at 51.23 in 2025. The difference between the standard and adjusted ratios remains consistent throughout the period, indicating that capitalized interest consistently reduces the reported coverage.
- Trend Comparison
- While both ratios decline, the adjusted interest coverage ratio consistently reports lower values than the standard ratio. This suggests that the inclusion of capitalized interest has a material impact on the company’s ability to cover its interest expense. The rate of decline appears to be slowing between 2024 and 2025 for both ratios, although both continue to decrease.
The consistent decrease in both interest coverage ratios warrants further investigation. While the ratios remain positive, the substantial decline suggests a weakening ability to meet interest obligations from operating income. Continued monitoring of these ratios is recommended to assess the sustainability of this trend.