Stock Analysis on Net
Stock Analysis on Net

Meta Platforms Inc. (NASDAQ:META)

Common-Size Income Statement 

Meta Platforms Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue 100.00 100.00 100.00 100.00 100.00
Cost of revenue -18.33 -19.24 -21.65 -19.21 -19.42
Gross profit 81.67% 80.76% 78.35% 80.79% 80.58%
Research and development -26.67 -28.53 -30.30 -20.91 -21.46
Marketing and sales -6.90 -9.12 -13.09 -11.91 -13.48
General and administrative -5.92 -8.46 -10.13 -8.33 -7.64
Income from operations 42.18% 34.66% 24.82% 39.65% 38.01%
Interest income 1.53 1.21 0.39 0.40 0.80
Interest expense -0.43 -0.33 -0.15 -0.01 -0.02
Foreign currency exchange losses, net -0.42 -0.27 -0.07 -0.12 -0.15
Other income (expense), net 0.10 -0.11 -0.27 0.18 -0.04
Interest and other income (expense), net 0.78% 0.50% -0.11% 0.45% 0.59%
Income before provision for income taxes 42.96% 35.16% 24.71% 40.10% 38.60%
Provision for income taxes -5.05 -6.17 -4.82 -6.71 -4.69
Net income 37.91% 28.98% 19.90% 33.38% 33.90%

Based on: 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), 10-K (reporting date: 2020-12-31).

The analysis of the financial data over the five-year period reveals several significant trends and changes in the company's cost structure, profitability, and income distribution as a percentage of revenue.

Cost of Revenue and Gross Profit
The cost of revenue remained relatively stable around 19% to 21.65% of revenue in the early years, with a peak at 21.65% in 2022 before declining to 18.33% by 2024. Correspondingly, gross profit as a percentage of revenue showed a slight dip to 78.35% in 2022, followed by improvement to 81.67% in 2024, indicating enhanced cost efficiency or pricing power in the most recent year.
Research and Development (R&D)
There was a notable increase in R&D spending as a percentage of revenue from 20.91% in 2021 to 30.3% in 2022, after which it declined gradually to 26.67% in 2024. This suggests a strategic emphasis on innovation or product development peaking in 2022, with a subsequent moderation in investment intensity while remaining above earlier levels.
Marketing and Sales Expenses
Marketing and sales expenses as a share of revenue have consistently decreased, from 13.48% in 2020 to only 6.9% by 2024. This significant reduction indicates increased efficiency in customer acquisition or a shift in marketing strategy that requires less relative spending over time.
General and Administrative Expenses
General and administrative expenses rose from 7.64% in 2020 to a high of 10.13% in 2022 before sharply declining to 5.92% in 2024. This pattern reflects fluctuating overhead costs, with a marked improvement in cost control demonstrated in the latest periods.
Operating Income
Income from operations as a percentage of revenue peaked at 39.65% in 2021, declined sharply to 24.82% in 2022, and then recovered strongly to 42.18% by 2024. The dip in 2022 aligns with higher R&D and administrative expenses, while the recovery indicates effective margin restoration and operational leverage gains.
Interest Income and Expense
Interest income remained modest, with a slight increase from 0.8% in 2020 to 1.53% in 2024. Interest expense was minimal but increasing from nearly zero to 0.43% over the same period, possibly indicating a rise in debt levels or borrowing costs, though the net impact on overall income remains small.
Foreign Currency Exchange and Other Income/Expense
Foreign currency exchange losses increased slightly over time, from 0.15% to 0.42% of revenue, reflecting modest adverse impacts from currency fluctuations. Other income (expense) and the combined interest and other income (expense) items showed variability but remained close to zero overall, with some positive movement visible in 2024.
Income Before Taxes and Net Income
Income before provision for income taxes closely followed the operating income trend, dropping from above 40% in 2021 to below 25% in 2022, then rebounding to nearly 43% in 2024. Provision for income taxes varied between approximately 4.7% and 6.7%, with no consistent directional trend. Net income as a percentage of revenue mirrored these patterns, decreasing significantly in 2022 to 19.9% and rebounding to 37.91% in 2024, indicating strong profitability recovery by the end of the period.

Overall, the data depict a period of increased investment and cost pressures in 2022, followed by a phase of expense control and margin improvement leading into 2024. Profitability substantially rebounded post-2022, driven by reductions in marketing, administrative costs, and the normalization of R&D expenditure relative to revenue. The company’s ability to restore operating leverage and net income margins suggests effective strategic and operational adjustments over the recent years.