Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Meta Platforms Inc., profitability ratios
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 profitability metrics demonstrate a period of fluctuation followed by improvement, with some moderation in the most recent projected year. Initial declines in profitability, observed between 2021 and 2022, were largely reversed by 2023, and further gains were made in 2024. However, projections for 2025 suggest a slight pullback from the peak performance achieved in 2024.
- Gross Profit Margin
- The gross profit margin exhibited relative stability throughout the period. A slight decrease from 80.79% in 2021 to 78.35% in 2022 was followed by a recovery to 80.76% in 2023. Continued improvement was seen in 2024 (81.67%) and 2025 (82.00%), indicating increasing efficiency in managing production costs or improved pricing strategies.
- Operating Profit Margin
- The operating profit margin experienced the most significant volatility. It declined substantially from 39.65% in 2021 to 24.82% in 2022, suggesting increased operating expenses or decreased revenue growth. A notable recovery occurred in 2023 (34.66%), continuing into 2024 with a rise to 42.18%. The projected value for 2025 is 41.44%, representing a modest decrease from the 2024 peak, but still considerably higher than the 2022 level.
- Net Profit Margin
- The net profit margin mirrored the trend of the operating profit margin, though to a lesser degree. It decreased from 33.38% in 2021 to 19.90% in 2022, then increased to 28.98% in 2023. Further gains were observed in 2024 (37.91%), followed by a projected decrease to 30.08% in 2025. This suggests that changes in factors beyond core operations, such as interest expense or taxes, also influenced net profitability.
- Return on Equity (ROE)
- Return on equity followed a similar pattern to the profit margins. A decline from 31.53% in 2021 to 18.45% in 2022 was followed by increases in 2023 (25.53%) and 2024 (34.14%). The projected ROE for 2025 is 27.83%, indicating a decrease from the 2024 high, but still representing a substantial improvement over the 2022 value. This indicates improved profitability relative to shareholder equity.
- Return on Assets (ROA)
- Return on assets also demonstrated a recovery after the 2022 decline. It decreased from 23.72% in 2021 to 12.49% in 2022, then increased to 17.03% in 2023 and 22.59% in 2024. The projected ROA for 2025 is 16.52%, representing a decrease from the 2024 peak, but remaining above the 2022 level. This suggests improved profitability relative to total assets.
Overall, the period was characterized by a significant downturn in profitability in 2022, followed by a strong recovery through 2024. While projections for 2025 indicate a slight moderation in performance, the anticipated levels remain considerably improved compared to the 2022 results.
Return on Sales
Return on Investment
Gross Profit Margin
Meta Platforms Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 164,791) | 134,340) | 108,943) | 91,360) | 95,280) | |
| Revenue | 200,966) | 164,501) | 134,902) | 116,609) | 117,929) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 82.00% | 81.67% | 80.76% | 78.35% | 80.79% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | — | 58.20% | 56.63% | 55.38% | 56.94% | |
| Comcast Corp. | — | 70.08% | 69.76% | 68.53% | 66.96% | |
| Netflix Inc. | 48.49% | 46.06% | 41.54% | 39.37% | 41.64% | |
| Trade Desk Inc. | — | 80.69% | 81.21% | 82.18% | 81.48% | |
| Walt Disney Co. | 37.76% | 35.75% | 33.41% | 34.24% | 33.06% | |
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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 164,791 ÷ 200,966 = 82.00%
2 Click competitor name to see calculations.
The gross profit margin exhibited a generally positive trend over the five-year period. While fluctuations occurred, the metric demonstrated an overall increase from 2021 to 2025.
- Gross Profit Margin Trend
- In 2021, the gross profit margin stood at 80.79%. A slight decrease was observed in 2022, with the margin declining to 78.35%. However, the margin rebounded in 2023, returning to 80.76%. Further increases were recorded in 2024 and 2025, reaching 81.67% and 82.00%, respectively. This indicates improving efficiency in managing the cost of goods sold relative to revenue.
The growth in gross profit margin correlates with increases in both gross profit and revenue. Revenue increased consistently throughout the period, while gross profit experienced a dip in 2022 before resuming growth. The consistent expansion of the margin suggests that the company effectively scaled its operations and maintained pricing power.
- Relationship to Revenue and Gross Profit
- Revenue increased from US$117,929 million in 2021 to US$200,966 million in 2025. Gross profit followed a similar trajectory, rising from US$95,280 million in 2021 to US$164,791 million in 2025. The simultaneous growth of both metrics, coupled with the increasing gross profit margin, suggests strong operational performance and effective cost management.
The modest decline in gross profit margin in 2022 warrants further investigation, but the subsequent recovery and continued improvement suggest this was a temporary deviation rather than a fundamental shift in the company’s profitability.
Operating Profit Margin
Meta Platforms Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income from operations | 83,276) | 69,380) | 46,751) | 28,944) | 46,753) | |
| Revenue | 200,966) | 164,501) | 134,902) | 116,609) | 117,929) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 41.44% | 42.18% | 34.66% | 24.82% | 39.65% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | — | 32.11% | 27.42% | 26.46% | 30.55% | |
| Comcast Corp. | — | 18.83% | 19.18% | 11.56% | 17.89% | |
| Netflix Inc. | 29.49% | 26.71% | 20.62% | 17.82% | 20.86% | |
| Trade Desk Inc. | — | 17.47% | 10.30% | 7.20% | 10.43% | |
| Walt Disney Co. | 13.78% | 9.11% | 5.74% | 7.90% | 4.46% | |
| Operating Profit Margin, Sector | ||||||
| Media & Entertainment | — | 29.08% | 24.20% | 20.43% | 26.36% | |
| Operating Profit Margin, Industry | ||||||
| Communication Services | — | 26.13% | 22.20% | 16.69% | 22.44% | |
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).
1 2025 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenue
= 100 × 83,276 ÷ 200,966 = 41.44%
2 Click competitor name to see calculations.
The operating profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated a substantial decline followed by a recovery and subsequent stabilization.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 39.65% in 2021, decreased significantly to 24.82% in 2022, and then showed a recovery, reaching 34.66% in 2023. This upward trend continued into 2024, with the margin increasing to 42.18%. The margin experienced a slight decrease in 2025, settling at 41.44%.
A notable decrease in the operating profit margin occurred between 2021 and 2022. This suggests a potential increase in operating expenses relative to revenue, or a decline in revenue, or a combination of both. The subsequent recovery in 2023 and strong performance in 2024 indicate successful cost management or revenue growth initiatives. The slight dip in 2025 suggests potential emerging pressures on profitability, though the margin remains at a relatively high level.
- Income from Operations
- Income from operations decreased from US$46,753 million in 2021 to US$28,944 million in 2022, mirroring the decline in the operating profit margin. However, it then increased substantially to US$46,751 million in 2023, followed by further growth to US$69,380 million in 2024 and US$83,276 million in 2025. This demonstrates a strong operational recovery and expansion.
- Revenue
- Revenue experienced a slight decrease from US$117,929 million in 2021 to US$116,609 million in 2022. Following this, revenue increased significantly, reaching US$134,902 million in 2023, US$164,501 million in 2024, and US$200,966 million in 2025. This consistent revenue growth contributed to the improved operating profit margin observed in later years.
The correlation between the increase in income from operations and revenue suggests that the company has been successful in leveraging revenue growth to improve its operational profitability. The stabilization of the operating profit margin around 41-42% in the final two years indicates a potential plateauing of margin expansion, requiring further investigation to identify opportunities for continued improvement.
Net Profit Margin
Meta Platforms Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 60,458) | 62,360) | 39,098) | 23,200) | 39,370) | |
| Revenue | 200,966) | 164,501) | 134,902) | 116,609) | 117,929) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 30.08% | 37.91% | 28.98% | 19.90% | 33.38% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | — | 28.60% | 24.01% | 21.20% | 29.51% | |
| Comcast Corp. | — | 13.09% | 12.66% | 4.42% | 12.17% | |
| Netflix Inc. | 24.30% | 22.34% | 16.04% | 14.21% | 17.23% | |
| Trade Desk Inc. | — | 16.08% | 9.19% | 3.38% | 11.51% | |
| Walt Disney Co. | 13.14% | 5.44% | 2.65% | 3.80% | 2.96% | |
| Net Profit Margin, Sector | ||||||
| Media & Entertainment | — | 25.00% | 19.79% | 15.11% | 23.18% | |
| Net Profit Margin, Industry | ||||||
| Communication Services | — | 20.96% | 16.67% | 11.45% | 18.71% | |
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).
1 2025 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 60,458 ÷ 200,966 = 30.08%
2 Click competitor name to see calculations.
The net profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrate a strong profitability position, followed by a significant decline, and subsequent recovery, ultimately stabilizing at a level below the initial peak.
- Net Profit Margin - Overall Trend
- The net profit margin began at 33.38% in 2021. A substantial decrease was observed in 2022, falling to 19.90%. This represents a significant contraction in profitability. The margin then experienced a recovery in 2023, reaching 28.98%, and continued to increase in 2024 to 37.91%, surpassing the initial 2021 level. A slight decrease occurred in 2025, with the margin settling at 30.08%.
The decline in 2022 warrants further investigation to understand the underlying factors contributing to reduced profitability. The subsequent recovery in 2023 and strong performance in 2024 suggest successful implementation of strategies to improve cost management or increase revenue generation. However, the slight dip in 2025 indicates a potential need to monitor factors influencing profitability to ensure sustained performance.
- Relationship to Revenue
- While the net profit margin fluctuated, revenue consistently increased throughout the period. Revenue grew from US$117,929 million in 2021 to US$200,966 million in 2025. The largest increase in revenue occurred between 2023 and 2024. The ability to increase net income alongside revenue growth, particularly the substantial increase in net income from 2022 to 2023, is a positive indicator.
The observed trends suggest a dynamic relationship between revenue and profitability. While revenue growth is consistent, maintaining a high net profit margin requires ongoing attention to cost control and operational efficiency.
- Peak and Trough
- The highest net profit margin was recorded in 2024 at 37.91%. The lowest point occurred in 2022, with a margin of 19.90%. These represent the peak and trough values within the observed timeframe, highlighting the range of profitability experienced.
Return on Equity (ROE)
Meta Platforms Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 60,458) | 62,360) | 39,098) | 23,200) | 39,370) | |
| Stockholders’ equity | 217,243) | 182,637) | 153,168) | 125,713) | 124,879) | |
| Profitability Ratio | ||||||
| ROE1 | 27.83% | 34.14% | 25.53% | 18.45% | 31.53% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Alphabet Inc. | — | 30.80% | 26.04% | 23.41% | 30.22% | |
| Comcast Corp. | — | 18.92% | 18.61% | 6.63% | 14.73% | |
| Netflix Inc. | 41.26% | 35.21% | 26.27% | 21.62% | 32.28% | |
| Trade Desk Inc. | — | 13.33% | 8.27% | 2.52% | 9.02% | |
| Walt Disney Co. | 11.29% | 4.94% | 2.37% | 3.31% | 2.25% | |
| ROE, Sector | ||||||
| Media & Entertainment | — | 26.71% | 21.24% | 16.57% | 23.65% | |
| ROE, Industry | ||||||
| Communication Services | — | 23.56% | 18.91% | 13.30% | 20.32% | |
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).
1 2025 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 60,458 ÷ 217,243 = 27.83%
2 Click competitor name to see calculations.
The return on equity (ROE) exhibited fluctuations over the five-year period. Net income and stockholders’ equity both demonstrated increases overall, but their combined effect on ROE varied year to year.
- Overall Trend
- ROE began at 31.53% in 2021, decreased significantly in 2022 to 18.45%, then recovered to 25.53% in 2023. A peak was reached in 2024 at 34.14%, followed by a decline to 27.83% in 2025.
- Net Income Influence
- Net income decreased substantially from 2021 to 2022, coinciding with the initial drop in ROE. Subsequent increases in net income in 2023 and 2024 contributed to the recovery and peak in ROE during those years. The slight decrease in net income from 2024 to 2025 appears to have contributed to the ROE decline in the latter year.
- Stockholders’ Equity Influence
- Stockholders’ equity showed a consistent upward trend throughout the period. While generally positive for ROE, the increasing equity base likely moderated the ROE increase in 2023 and 2024, as a larger equity base requires a larger net income to achieve the same ROE percentage. The continued growth in equity from 2024 to 2025 also likely contributed to the ROE decrease in 2025.
- Comparative Analysis
- The highest ROE was observed in 2024, indicating the most efficient use of shareholders’ investments during that year. The lowest ROE occurred in 2022, suggesting a less effective utilization of equity during that period. The ROE in 2025, while still substantial, represents a pullback from the 2024 high.
The interplay between net income and stockholders’ equity significantly impacted ROE. While both components generally increased, the relative changes between them determined the overall ROE trend.
Return on Assets (ROA)
Meta Platforms Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 60,458) | 62,360) | 39,098) | 23,200) | 39,370) | |
| Total assets | 366,021) | 276,054) | 229,623) | 185,727) | 165,987) | |
| Profitability Ratio | ||||||
| ROA1 | 16.52% | 22.59% | 17.03% | 12.49% | 23.72% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Alphabet Inc. | — | 22.24% | 18.34% | 16.42% | 21.16% | |
| Comcast Corp. | — | 6.08% | 5.81% | 2.09% | 5.13% | |
| Netflix Inc. | 19.75% | 16.24% | 11.10% | 9.24% | 11.48% | |
| Trade Desk Inc. | — | 6.43% | 3.66% | 1.22% | 3.85% | |
| Walt Disney Co. | 6.28% | 2.53% | 1.15% | 1.54% | 0.98% | |
| ROA, Sector | ||||||
| Media & Entertainment | — | 15.44% | 11.78% | 9.04% | 12.99% | |
| ROA, Industry | ||||||
| Communication Services | — | 10.40% | 7.93% | 5.42% | 8.36% | |
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).
1 2025 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 60,458 ÷ 366,021 = 16.52%
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited considerable fluctuation over the five-year period. Initial values demonstrated strong profitability, followed by a significant decline, and then a recovery, ultimately settling at a level below the initial peak.
- Overall Trend
- The ROA began at 23.72% in 2021, representing a high level of profitability relative to the company’s assets. A substantial decrease was observed in 2022, with the ROA falling to 12.49%. Subsequent years showed improvement, reaching 22.59% in 2024, before decreasing slightly to 16.52% in 2025.
- Year-over-Year Changes
- The largest year-over-year decrease occurred between 2021 and 2022, a decline of 11.23 percentage points. The most significant increase was between 2022 and 2024, with an increase of 10.10 percentage points. The change from 2024 to 2025 was a decrease of 6.07 percentage points.
- Relationship to Net Income and Total Assets
- The decline in ROA in 2022 coincided with a decrease in net income. While total assets increased in both 2022 and 2023, the ROA did not immediately recover to its prior level, suggesting that the efficiency of asset utilization was impacted. The substantial ROA increase in 2024 was driven by a significant rise in net income, despite continued growth in total assets. The slight decrease in ROA in 2025, despite continued net income at a high level, suggests that asset growth outpaced income growth.
In summary, the ROA demonstrates a volatile pattern, influenced by both net income and total asset levels. While the company demonstrated a strong recovery in profitability as measured by ROA between 2022 and 2024, the most recent year shows a slight reduction, indicating a potential shift in the relationship between asset deployment and income generation.