Meta Platforms Inc. (NASDAQ:META)

Goodwill exhibited a generally increasing trend over the analyzed period. Beginning at US$19,197 million in 2021, it rose to US$20,654 million by 2023, remaining constant in 2024 before increasing significantly to US$24,534 million in 2025. This suggests potential acquisitions or revaluations contributing to the growth, particularly in the final year.

The composition of intangible assets demonstrates notable shifts. Acquired software was initially absent but grew substantially, reaching US$2,601 million in 2025. Acquired technology and patents both experienced declines from 2021 to 2024, with acquired technology showing a partial recovery in 2025. Acquired users were only present in 2021, and other intangible assets fluctuated, with a notable increase in 2025.

Finite-Lived Intangible Assets

The gross carrying amount of finite-lived assets decreased from US$5,116 million in 2021 to US$973 million in 2022, then showed some recovery to US$968 million in 2024, before increasing to US$4,089 million in 2025. Accumulated amortization consistently reduced the net carrying amount, which followed a similar pattern, increasing significantly in 2025 to US$3,295 million. This indicates a substantial investment in new finite-lived assets in 2025, coupled with ongoing amortization of existing assets.

Indefinite-lived assets remained relatively stable between US$266 million and US$425 million from 2021 to 2024, with a slight decrease to US$397 million in 2025. This suggests consistent valuation of these assets over the period.

Total Intangible Assets

Net intangible assets increased from US$634 million in 2021 to US$915 million in 2024, with a substantial increase to US$3,692 million in 2025. This growth is primarily driven by the increase in finite-lived assets, net carrying amount, and acquired software.

The combined value of goodwill and intangible assets increased steadily from US$19,831 million in 2021 to US$21,569 million in 2024, with a significant jump to US$28,226 million in 2025. This overall increase is largely attributable to the growth in both goodwill and net intangible assets, particularly in the final year of the period.

An examination of the financial information reveals a consistent difference between reported and adjusted total assets and stockholders’ equity over the five-year period. These adjustments appear to be primarily related to the removal of goodwill and intangible assets, resulting in lower reported values when these items are excluded.

Total Assets

Reported total assets demonstrate an upward trend, increasing from US$165,987 million in 2021 to US$366,021 million in 2025. However, adjusted total assets, which exclude goodwill and intangibles, exhibit a similar, though less pronounced, growth pattern, rising from US$146,790 million to US$341,487 million over the same period. The difference between reported and adjusted total assets widens over time, indicating a growing amount of goodwill and intangible assets on the balance sheet.

Stockholders’ Equity

Reported stockholders’ equity also shows an increasing trend, moving from US$124,879 million in 2021 to US$217,243 million in 2025. Adjusted stockholders’ equity follows a similar trajectory, increasing from US$105,682 million to US$192,709 million. The gap between reported and adjusted equity also expands from 2021 to 2025, mirroring the trend observed in total assets and suggesting that goodwill and intangibles contribute significantly to the reported equity position.

The consistent difference between the reported and adjusted figures suggests that a substantial portion of the company’s reported asset base and equity is attributable to goodwill and intangible assets. The increasing divergence over the period indicates that these items are becoming a larger component of the overall financial position. This trend warrants further investigation to assess the underlying assumptions and potential risks associated with these assets.

The growth in both reported and adjusted figures indicates overall financial expansion. However, the adjustments highlight the importance of considering the quality and sustainability of the growth when evaluating the company’s financial health. A reliance on goodwill and intangible assets could potentially introduce volatility if these assets were to be impaired in the future.

The financial metrics demonstrate a consistent pattern when goodwill is excluded from the asset base. Adjusting for goodwill generally results in improved profitability and efficiency ratios, though trends remain largely consistent with those observed using reported figures. Over the five-year period, several key observations emerge regarding asset utilization, financial leverage, and profitability.

Total Asset Turnover

Reported total asset turnover decreased from 0.71 in 2021 to 0.55 in 2025, indicating a declining efficiency in generating revenue from its assets. The adjusted total asset turnover, calculated after removing goodwill, consistently exceeds the reported figure, starting at 0.80 in 2021 and decreasing to 0.59 in 2025. This suggests that goodwill significantly depresses the reported asset turnover ratio. The rate of decline is similar for both reported and adjusted values.

Financial Leverage

Reported financial leverage increased steadily from 1.33 in 2021 to 1.68 in 2025, suggesting a growing reliance on debt financing. The adjusted financial leverage, excluding goodwill, also shows an increasing trend, moving from 1.39 to 1.77 over the same period. The adjusted leverage ratios are slightly higher than the reported ratios, indicating that goodwill provides a moderating effect on the leverage calculation. The increase in leverage appears consistent regardless of the inclusion of goodwill.

Return on Equity (ROE)

Reported ROE experienced volatility, decreasing from 31.53% in 2021 to 18.45% in 2022, then increasing to 34.14% in 2024 before declining to 27.83% in 2025. The adjusted ROE consistently surpasses the reported ROE, beginning at 37.25% in 2021 and ending at 31.37% in 2025. This difference highlights the impact of goodwill on equity, as its exclusion leads to a higher calculated return. The overall trend in ROE, including fluctuations, is mirrored in the adjusted ROE.

Return on Assets (ROA)

Reported ROA followed a similar pattern to ROE, declining from 23.72% in 2021 to 12.49% in 2022, increasing to 22.59% in 2024, and then decreasing to 16.52% in 2025. The adjusted ROA consistently exceeds the reported ROA, starting at 26.82% in 2021 and finishing at 17.70% in 2025. As with ROE, the exclusion of goodwill results in a higher calculated return on assets. The fluctuations observed in the reported ROA are also present in the adjusted ROA, indicating that the underlying asset performance is the primary driver of the trend.

In summary, removing goodwill from the calculation of these ratios consistently results in higher values for asset turnover, financial leverage, ROE, and ROA. While the inclusion of goodwill moderates these ratios, the underlying trends remain consistent. The observed fluctuations in profitability ratios suggest potential impacts from operational performance and external economic factors.

An examination of the financial information reveals trends in both total asset values and associated turnover ratios over a five-year period. Reported total assets consistently increased throughout the period, while adjusted total assets also exhibited growth, albeit at a slightly lower magnitude. Correspondingly, both reported and adjusted total asset turnover ratios demonstrate a general decline.

Reported Total Assets & Turnover

Reported total assets increased from US$165,987 million in 2021 to US$366,021 million in 2025, representing a substantial overall increase. However, the reported total asset turnover ratio decreased from 0.71 in 2021 to 0.55 in 2025. This indicates that the company is generating less revenue for each dollar of reported assets held. The decline was most pronounced between 2021 and 2022, with a more gradual decrease observed in subsequent years.

Adjusted Total Assets & Turnover

Adjusted total assets grew from US$146,790 million in 2021 to US$341,487 million in 2025. The adjusted total asset turnover ratio followed a similar pattern to the reported ratio, decreasing from 0.80 in 2021 to 0.59 in 2025. While consistently higher than the reported turnover ratio, the adjusted ratio also shows a diminishing trend, suggesting a similar inefficiency in asset utilization when considering adjustments. The largest decrease in the adjusted ratio occurred between 2021 and 2022, falling from 0.80 to 0.70.

Relationship Between Reported and Adjusted Ratios

The adjusted total asset turnover ratio consistently exceeded the reported total asset turnover ratio across all years examined. This difference suggests that the adjustments made to total assets have a positive impact on the calculated turnover, implying that certain asset components are less effectively contributing to revenue generation. The gap between the two ratios narrowed slightly from 0.09 in 2021 to 0.04 in 2025, indicating a potential convergence in asset utilization efficiency as measured by both metrics.

Overall Trend

The consistent decline in both reported and adjusted total asset turnover ratios, despite increasing asset bases, warrants further investigation. This trend could indicate a need to re-evaluate asset allocation strategies, improve operational efficiency, or address potential issues with revenue generation relative to asset investment. The decreasing ratios suggest a diminishing return on asset employment over the observed period.

An examination of the financial information reveals trends in both reported and adjusted asset and equity figures, impacting calculated financial leverage ratios over the five-year period. Reported total assets demonstrate consistent growth, increasing from US$165,987 million in 2021 to US$366,021 million in 2025. A similar upward trajectory is observed in reported stockholders’ equity, rising from US$124,879 million to US$217,243 million during the same timeframe.

However, adjusted figures present a slightly different picture. While adjusted total assets also increase over the period, reaching US$341,487 million in 2025 from US$146,790 million in 2021, the growth rate appears moderated compared to the reported figures. Adjusted stockholders’ equity shows a similar pattern, growing to US$192,709 million in 2025 from US$105,682 million in 2021.

Reported Financial Leverage

Reported financial leverage, calculated as total assets divided by stockholders’ equity, exhibits a generally increasing trend. It rose from 1.33 in 2021 to 1.68 in 2025, with incremental increases observed in 2022 and 2023, followed by a more modest increase in 2024. This suggests a growing reliance on debt or other non-equity financing relative to equity.

Adjusted Financial Leverage

Adjusted financial leverage, utilizing the adjusted asset and equity values, also demonstrates an increasing trend, moving from 1.39 in 2021 to 1.77 in 2025. The increase from 2021 to 2022 is more pronounced than subsequent yearly changes, with 2023, 2024, and 2025 showing relatively stable values around 1.58 before a final increase in 2025. The adjusted leverage consistently remains slightly higher than the reported leverage throughout the period.

The divergence between reported and adjusted figures, and the resulting differences in leverage ratios, suggests the presence of items impacting the reported values, such as goodwill or intangible assets, which are being adjusted for in the analysis. The consistent increase in both reported and adjusted financial leverage indicates a general trend towards increased financial risk, although the magnitude of this risk is somewhat mitigated by the continued growth in both asset and equity bases.

Analysis reveals distinct trends in stockholders’ equity and associated return on equity metrics over the five-year period. Reported stockholders’ equity demonstrates a consistent upward trajectory, increasing from US$124,879 million in 2021 to US$217,243 million in 2025. Adjusted stockholders’ equity mirrors this growth, albeit at a slightly lower magnitude, rising from US$105,682 million to US$192,709 million over the same timeframe.

Reported Stockholders’ Equity

Reported stockholders’ equity experienced moderate growth between 2021 and 2022, followed by more substantial increases in subsequent years. The largest year-over-year increase occurred between 2022 and 2023, and again between 2023 and 2024. Growth slowed somewhat between 2024 and 2025.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity exhibited a slight decrease from 2021 to 2022. However, it then followed a pattern of consistent growth through 2025, with the most significant increase observed between 2023 and 2024. The difference between reported and adjusted equity appears to be widening over time.

Reported Return on Equity (ROE)

Reported ROE fluctuated considerably during the period. A substantial decline was observed from 2021 to 2022, followed by a recovery in 2023 and a peak in 2024. ROE then decreased in 2025, though remaining above the 2022 level.

Adjusted Return on Equity (ROE)

Adjusted ROE generally tracked the trend of reported ROE, but consistently reported higher values. It experienced a similar decline from 2021 to 2022, followed by increases in 2023 and 2024, reaching a peak of 38.50%. A decrease was also noted in 2025, but the adjusted ROE remained higher than the reported ROE throughout the entire period. The difference between reported and adjusted ROE suggests that adjustments to stockholders’ equity have a material impact on the calculated return.

The divergence between reported and adjusted ROE, and the corresponding equity values, indicates the presence of items impacting reported equity that are being adjusted for in the analysis. The consistent increase in both reported and adjusted equity suggests overall financial health and growth, while the fluctuations in ROE warrant further investigation into the underlying drivers of profitability.

The analysis reveals distinct trends in reported and adjusted return on assets (ROA) alongside changes in total asset values over the five-year period. Reported total assets demonstrate a consistent upward trajectory, increasing from US$165,987 million in 2021 to US$366,021 million in 2025. Adjusted total assets also exhibit growth, though at a slightly lower magnitude, moving from US$146,790 million to US$341,487 million over the same timeframe. The difference between reported and adjusted total assets widens over the period, suggesting an increasing presence of items subject to adjustment.

Reported Return on Assets (ROA)

Reported ROA experiences volatility throughout the period. It declines from 23.72% in 2021 to 12.49% in 2022, then recovers to 17.03% in 2023 and peaks at 22.59% in 2024 before decreasing to 16.52% in 2025. This fluctuation indicates sensitivity to changes in reported asset values and net income.

Adjusted Return on Assets (ROA)

Adjusted ROA presents a more stable, though still fluctuating, pattern. It begins at 26.82% in 2021, dips to 14.02% in 2022, and then rises to 18.71% in 2023. A peak of 24.42% is observed in 2024, followed by a decrease to 17.70% in 2025. The adjusted ROA consistently exceeds the reported ROA across all years, indicating that the adjustments made to total assets positively impact profitability metrics.

The divergence between reported and adjusted ROA suggests that a significant portion of reported assets may not be contributing to core operational profitability. The adjustments made to arrive at adjusted total assets appear to provide a clearer picture of the underlying economic performance. The decline in both reported and adjusted ROA in 2025 warrants further investigation to determine the underlying causes, such as changes in net income or asset base composition.

Trend Analysis

A general upward trend is observed in both reported and adjusted total assets. However, the ROA figures demonstrate cyclical behavior, with a dip in 2022 followed by recovery and subsequent decline in 2025. The consistent difference between reported and adjusted ROA highlights the importance of considering asset adjustments when evaluating financial performance.

The increasing gap between reported and adjusted total assets over the period suggests a growing reliance on non-operating assets or items requiring adjustment, potentially impacting the comparability of financial performance over time.