Meta Platforms Inc. (NASDAQ:META)

Receivables Turnover

The receivables turnover ratio shows a generally fluctuating but stable trend, with values typically ranging between approximately 8.3 and 11.7. Periods of higher turnover, such as around March 31, 2025 (11.74), indicate improved efficiency in collecting receivables, while lower values around December 31, 2021 (8.4) and December 31, 2023 (8.34) suggest slower collection during those quarters. Overall, the company appears to maintain a relatively steady ability to convert receivables into cash throughout the observed periods.

Payables Turnover

The payables turnover ratio exhibits significant volatility over time, starting from a high of around 20.9 in early 2021, sharply decreasing to a low near 3.1 by September 2025. This downward trend implies a lengthening in the time the company takes to pay its suppliers. Notably, the sharp declines after mid-2021 and the persistent low levels towards the end of the period may reflect strategic cash management decisions or delays in payments, potentially impacting supplier relationships.

Working Capital Turnover

The working capital turnover ratio shows a rising trend in the initial periods, increasing from about 1.46 to above 3.5 by late 2021, indicating more efficient use of working capital to generate sales. This is followed by moderate fluctuations, with ratios mostly staying between 2.5 and 5.2 after 2022. The peak values in early 2025 suggest heightened efficiency in utilizing working capital, although intermittent declines hint at periodic changes in operational or investment activities affecting working capital turnover.

Average Receivable Collection Period

The average receivable collection period generally oscillates between 31 and 44 days throughout the periods, with lower values indicating quicker collection of receivables. The lowest days recorded near March 31, 2025 (31 days) align with periods of higher receivables turnover, confirming improved collection efficiency. Conversely, spikes observed around December quarters (notably 43–44 days) suggest some seasonal delays in collection.

Average Payables Payment Period

The average payables payment period exhibits broad expansion over time, starting from 17 days in early 2021 and increasing to periods exceeding 90 days in several quarters around 2024 and 2025, with a peak of 116 days in September 2025. This marks a substantial delay in payment to suppliers when compared to the beginning of the timeframe and aligns with the declining payables turnover ratio, possibly reflecting deliberate payment deferral strategies or liquidity considerations.

The financial data demonstrates a dynamic pattern in revenue, accounts receivable, and receivables turnover ratios over the analyzed quarterly periods. The following analysis summarizes these observations and highlights key trends and implications.

Revenue Trends

Revenue exhibits notable fluctuations with an overall upward trajectory. Between March 2021 and December 2021, there is a clear increasing trend from approximately 26.2 billion to 33.7 billion US dollars, indicating growth during this period. This growth is partially interrupted in early 2022 with a decline seen in March through September 2022 quarters, where revenue dips to around 27.7 billion. Subsequently, there is a rebound with a significant increase culminating at approximately 40.1 billion by December 2023. Post this peak, revenue maintains a rising pattern through 2024 and reaching a substantial high of about 51.2 billion by September 2025. This pattern suggests a cyclical behavior with strong recovery phases following periods of deceleration.

Accounts Receivable, Net

Periods of increasing revenue generally correspond with increases in accounts receivable, though the latter shows greater volatility. The accounts receivable balance rises from roughly 10.3 billion at the beginning of 2021 to a peak of approximately 16.2 billion by December 2023, aligning with the revenue peak during the same period. Following this, accounts receivable fluctuate but maintain an overall upward tendency reaching close to 17.3 billion by September 2025. The variability in receivables could reflect timing differences in collections or changes in credit policies, with higher receivables indicating potentially extended collection periods or increased sales on credit.

Receivables Turnover Ratio

The receivables turnover ratio oscillates, indicating varying efficiency in collecting receivables relative to revenue. Early in the timeline, the ratio generally hovers around 9.0 to 9.3 times per year, dipping to a lower level in December 2021 (8.4), which coincides with a revenue peak but also increased accounts receivable. In 2022 and 2023, the turnover ratio improves, frequently surpassing 10 times, suggesting enhanced collection efficiency during periods of revenue stabilization or growth. Notably, in the later quarters leading into 2025, the turnover ratio reaches its highest values—above 10.8 and up to nearly 11.7—suggesting stronger collection management despite rising receivables. This improvement in turnover ratio amid increasing receivables and revenues reflects potentially effective credit control or faster conversion of receivables to cash.

In summary, the data reveals an overall expansion in revenue accompanied by increasing accounts receivable, with receivables turnover showing periods of both mild decline and improvement. The general strengthening of the receivables turnover ratio towards the latest quarters indicates increased efficiency in cash collections, even as the company scales its revenue substantially. This trend is positive for liquidity and working capital management, suggesting a balanced growth approach with careful monitoring of credit risk and operational efficiency.

Cost of Revenue

The cost of revenue demonstrated considerable volatility over the observed periods. Initially, there was an upward trend from March 2021 through December 2021, peaking at 8,336 million USD in the last quarter of that year. This was followed by a decline in early 2022, before resuming a generally upward trajectory through subsequent quarters into 2025, reaching a peak of 9,206 million USD in September 2025. The fluctuations indicate periods of increased production or service delivery costs interspersed with temporary contractions.

Accounts Payable

Accounts payable showed significant fluctuations, starting from 878 million USD in March 2021 and increasing sharply to over 4,000 million USD by the end of 2021. Throughout 2022 and 2023, the values oscillated between around 3,000 to near 5,000 million USD. From 2024 onwards, a marked increase is observed, with values peaking above 10,000 million USD in June 2025, before moderating somewhat in the following quarters. This pattern suggests variability in the company's short-term obligations, potentially reflecting varying purchasing activity or payment terms over time.

Payables Turnover

The payables turnover ratio generally declined over the period, indicating a lengthening of the average time taken to pay suppliers. The ratio started relatively high at 20.92 in March 2021 but declined sharply through 2021 and 2022, stabilizing at lower levels ranging roughly between 3 and 8 thereafter. Particularly low turnover rates were noted between late 2024 and mid-2025, including a nadir around 3.14 in June 2025. This suggests the company was taking longer to settle its payables in recent periods, which could impact supplier relationships or reflect deliberate cash management strategies.

Overall Insights

The combined analysis of these financial metrics illustrates a company experiencing growing operational scale or complexity, as evidenced by rising cost of revenue and expanding accounts payable balances. However, the simultaneous decrease in payables turnover ratio points to extended payment cycles, which may reflect strategic liquidity management or potential stress on cash flow. Monitoring these trends is essential for assessing the company's operational efficiency and financial health moving forward.

Working Capital

The working capital demonstrates a general downward trend from March 31, 2021, through March 31, 2023, declining from 64,605 million USD to 27,102 million USD. This reflects a reduction in the company's short-term liquidity position during this period. Following this low point, there is a notable recovery throughout 2023 and into early 2024 with working capital increasing to 66,449 million USD by December 31, 2024. However, this is succeeded by another decline, reaching 36,160 million USD by September 30, 2025. This pattern indicates fluctuations in liquidity management or changes in current asset and liability levels across the periods.

Revenue

Revenue initially shows modest growth from 26,171 million USD in March 2021 to 33,671 million USD by December 2021, followed by fluctuations throughout 2022, with a slight drop in the third quarter before rebounding by year-end. The period from early 2023 to late 2024 reflects a consistent upward trajectory, peaking at 48,386 million USD on December 31, 2024. Despite some intermittent dips, revenue maintains an overall positive growth trend, reaching 51,242 million USD by September 30, 2025. This pattern suggests strong sales performance and expanding operational scale in the most recent years.

Working Capital Turnover

The working capital turnover ratio, an indicator of how efficiently the company utilizes its working capital to generate revenue, shows a rising trend from 1.46 in March 2021 to a peak of 4.33 in March 2023. This upward trend implies increased efficiency in the early periods despite the initially declining working capital. After March 2023, the ratio decreases to a low of 2.48 by December 2024, suggesting reduced efficiency, potentially linked to the recovery phase in working capital where current assets may have increased faster than revenue. Subsequently, the ratio sharply rises again towards the end of the series, reaching 5.24 by September 2025, implying a renewed improvement in generating revenue from working capital.

Overall Insights

The data reveals a cyclical nature in the company's liquidity and operational efficiency. The initial decrease in working capital accompanied by increasing turnover suggests an efficient use of resources despite tightening liquidity. The later periods show periods of liquidity rebuilding, accompanied by slower turnover improvement, followed by renewed revenue growth and efficiency gains. Such fluctuations may reflect strategic shifts in working capital management, investment cycles, or changes in operational scale and market conditions.

The analysis of the receivables turnover ratio and average receivable collection period over the observed quarterly periods reveals notable patterns and fluctuations that indicate changes in the company's efficiency in collecting receivables.

Receivables Turnover Ratio

The receivables turnover ratio exhibits a fluctuating trend over the examined quarters. Initially, it was relatively high around 9.19 to 9.29 in early 2021, followed by a dip to 8.4 by the end of 2021. The ratio then increased significantly reaching above 10 during the first three quarters of 2022. However, a decrease is observed again towards the end of 2022, dropping below 9.

Starting from 2023, the ratio generally maintains values above 9 with periodic rises and dips, indicating some instability but an overall recovery in turnover efficiency. The highest recorded ratio in this period is 11.74 during the second quarter of 2025, signaling improved effectiveness in collecting receivables. Despite occasional declines, the long-term tendency points to a strengthened collection capability by mid-2025 compared to early 2021.

Average Receivable Collection Period

The average receivable collection period inversely mirrors the turnover ratio dynamics, as expected. In early 2021, the company took around 39 to 43 days to collect receivables, with a notable reduction to about 35 days during the mid-2022 quarters, aligning with the increased turnover ratio in that period.

Later in 2022, the collection period again extended to over 40 days, coinciding with the drop in turnover ratio. During 2023 and beyond, the days to collect average between 33 and 44 days, generally trending towards shorter collection periods by the end of the observed timeline. The shortest collection period occurs at 31 days in the second quarter of 2025, reinforcing the indication of improved receivables management over time.

Overall, the company's receivables management shows periods of both improvement and challenge, with the long-term trend favoring enhanced efficiency. The variations highlight the company's responsiveness to operational and possibly market conditions impacting receivables collection cycles. The eventual improvement in financial ratios by mid-2025 suggests successful initiatives or external factors contributing to better receivables turnover and reduced collection timeframes.

The analysis of the payables turnover and average payables payment period over the examined quarters reveals significant fluctuations and an overall trend of deceleration in payment velocity.

Payables Turnover

The payables turnover ratio shows a marked decline from early 2021 into late 2022, dropping from a high of approximately 20.92 to a low near 3.79 by late 2024. This indicates a reduction in the rate at which the company settles its payables over the periods. The initial quarters of 2021 exhibit exceptionally high turnover ratios (>20), which sharply decrease to single digits and sustain a generally lower level thereafter, interspersed with moderate short-term fluctuations.

Average Payables Payment Period

Complementing the turnover ratio trend, the average payables payment period indicates that the company is taking longer to pay its obligations. Starting from a low of 17 days in early 2021, the payment period extends significantly, reaching highs exceeding 100 days in the quarters spanning late 2024 to mid-2025. Periods of abrupt increase in payment days correspond inversely with the declining payables turnover ratio, highlighting slower payments to creditors.

Trend Correlation and Insights

The inverse relationship between the payables turnover and payment period is consistent throughout the data set, confirming the analytical validity of these measures. The expansion of payment periods and shrinking turnover ratios suggest a strategic or operational shift toward extended credit terms or potential cash flow management adjustments. The lengthened payment cycles might indicate deliberate efforts to optimize working capital or could signal emerging liquidity constraints.

Short-Term Variations

While the overarching trend points to slower payables processing, intermittent short-term increases in turnover ratio and reductions in payment days occur, notably around fiscal quarters in 2023 and early 2024. However, these fluctuations are transient and do not offset the general downward trend in liquidity velocity reflected in payables management.

In summary, the company's payables management exhibits a clear movement toward longer payment periods and reduced turnover ratios over the analyzed timeframe, suggesting a strategic extension of payment terms or changing financial conditions affecting cash outflows.