Meta Platforms, Inc 8-K, filed Jul 30, 2020

Meta Platforms, Inc. (META)

8-K 2020-07-30 For: 2020-07-30

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Added on April 07, 2026

About this 8-K

Meta Platforms, Inc filed this 8-K on July 30, 2020.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Delaware	001-35551	20-1665019

(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)



☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.000006 par value	FB	The Nasdaq Stock Market LLC



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		☐



Exhibit Number		Exhibit Title or Description
99.1		Press release dated July 30, 2020
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)




		FACEBOOK, INC.

Date:	July 30, 2020	By:	/s/ David Kling
			Name: David Kling
			Title: Vice President, Deputy General Counsel and Secretary



	Three Months Ended June 30,						Year-over-Year % Change
In millions, except percentages and per share amounts	2020			2019⁽¹⁾			Year-over-Year % Change
Revenue:
Advertising	$	18,321		$	16,624		10%
Other	366			262			40%
Total revenue	18,687			16,886			11%
Total costs and expenses	12,724			12,260			4%
Income from operations	$	5,963		$	4,626		29%
Operating margin	32		%	27		%
Provision for income taxes	$	953		$	2,216		(57)%
Effective tax rate	16		%	46		%
Net income	$	5,178		$	2,616		98%
Diluted earnings per share (EPS)	$	1.80		$	0.91		98%


•	Facebook daily active users (DAUs) – DAUs were 1.79 billion on average for June 2020, an increase of 12% year-over-year.


•	Facebook monthly active users (MAUs) – MAUs were 2.70 billion as of June 30, 2020, an increase of 12% year-over-year.


•	Family daily active people (DAP) – DAP was 2.47 billion on average for June 2020, an increase of 15% year-over-year.


•	Family monthly active people (MAP) – MAP was 3.14 billion as of June 30, 2020, an increase of 14% year-over-year.


•	Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.36 billion for the second quarter of 2020.


•	Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $58.24 billion as of June 30, 2020. On July 7, 2020, we paid approximately $5.8 billion at the then‑current exchange rate for our investment in Jio Platforms Limited.


•	Headcount – Headcount was 52,534 as of June 30, 2020, an increase of 32% year-over-year.


◦	First, continued macroeconomic uncertainty, including the pace of recovery and the prospects for additional economic stimulus;


◦	Second, our expectation that some of the recent surge in community engagement will normalize as regions reopen;


◦	Third, the impact from certain advertisers pausing spend on our platforms related to the current boycott, which is reflected in our July trends; and


◦	Lastly, headwinds related to ad targeting and measurement, including the impact of regulation, such as the California Consumer Privacy Act, as well as headwinds from expected changes to mobile operating platforms, which we anticipate will be increasingly significant as the year progresses.


•	Total expenses - We expect total expenses in 2020 to be in the range of $52-55 billion, narrowed slightly from the prior range of $52-56 billion.


•	Tax rates - We expect our full-year 2020 tax rate to be in the mid-teens, although we may see fluctuations in our quarterly rate depending on our financial results.



FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except for per share amounts)
(Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019⁽¹⁾		2020		2019⁽¹⁾
Revenue	$	18,687	$	16,886	$	36,423	$	31,963
Costs and expenses:
Cost of revenue	3,829		3,307		7,288		6,123
Research and development	4,462		3,315		8,477		6,175
Marketing and sales	2,840		2,414		5,627		4,434
General and administrative	1,593		3,224		3,175		7,288
Total costs and expenses	12,724		12,260		24,567		24,020
Income from operations	5,963		4,626		11,856		7,943
Interest and other income, net	168		206		136		371
Income before provision for income taxes	6,131		4,832		11,992		8,314
Provision for income taxes	953		2,216		1,911		3,269
Net income	$	5,178	$	2,616	$	10,081	$	5,045
Earnings per share attributable to Class A and Class B common stockholders:
Basic	$	1.82	$	0.92	$	3.54	$	1.77
Diluted	$	1.80	$	0.91	$	3.51	$	1.76
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
Basic	2,850		2,855		2,851		2,855
Diluted	2,879		2,875		2,876		2,873
Share-based compensation expense included in costs and expenses:
Cost of revenue	$	117	$	109	$	211	$	196
Research and development	1,261		927		2,260		1,650
Marketing and sales	187		160		336		273
General and administrative	130		107		223		194
Total share-based compensation expense	$	1,695	$	1,303	$	3,030	$	2,313



FACEBOOK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
			June 30, 2020			December 31, 2019
Assets
Current assets:
	Cash and cash equivalents		$	21,045		$	19,079
	Marketable securities		37,195			35,776
	Accounts receivable, net of allowances of $365 and $206 as of June 30, 2020 and December 31, 2019, respectively		7,483			9,518
	Prepaid expenses and other current assets		2,407			1,852
		Total current assets	68,130			66,225
Property and equipment, net			39,006			35,323
Operating lease right-of-use assets, net			9,429			9,460
Intangible assets, net			859			894
Goodwill			19,029			18,715
Other assets			3,238			2,759
Total assets			$	139,691		$	133,376

Liabilities and stockholders' equity
Current liabilities:
	Accounts payable		$	920		$	1,363
	Partners payable		729			886
	Operating lease liabilities, current		899			800
	Accrued expenses and other current liabilities		8,496			11,735
	Deferred revenue and deposits		264			269
		Total current liabilities	11,308			15,053
Operating lease liabilities, non-current			9,633			9,524
Other liabilities			8,303			7,745
		Total liabilities	29,244			32,322
Commitments and contingencies
Stockholders' equity:
	Common stock and additional paid-in capital		47,805			45,851
	Accumulated other comprehensive loss		(142		)	(489		)
	Retained earnings		62,784			55,692
		Total stockholders' equity	110,447			101,054
Total liabilities and stockholders' equity			$	139,691		$	133,376



FACEBOOK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Cash flows from operating activities
Net income	$	5,178		$	2,616		$	10,081		$	5,045
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,704			1,502			3,301			2,857
Share-based compensation	1,695			1,303			3,030			2,313
Deferred income taxes	214			1			690			184
Other	43			9			49			14
Changes in assets and liabilities:
Accounts receivable	(122		)	(1,006		)	1,924			64
Prepaid expenses and other current assets	(325		)	(252		)	(353		)	(168		)
Other assets	3			24			(15		)	65
Accounts payable	(56		)	8			(100		)	(87		)
Partners payable	11			20			(158		)	20
Accrued expenses and other current liabilities	(3,995		)	2,827			(3,016		)	5,982
Deferred revenue and deposits	15			55			(1		)	51
Other liabilities	(487		)	1,508			(554		)	1,584
Net cash provided by operating activities	3,878			8,615			14,878			17,924
Cash flows from investing activities
Purchases of property and equipment, net	(3,255		)	(3,633		)	(6,813		)	(7,470		)
Purchases of marketable securities	(6,179		)	(5,152		)	(14,063		)	(11,755		)
Sales of marketable securities	2,617			2,944			5,381			4,456
Maturities of marketable securities	3,224			1,895			7,868			4,105
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets	(339		)	(3		)	(372		)	(53		)
Other investing activities, net	(245		)	(61		)	(288		)	(61		)
Net cash used in investing activities	(4,177		)	(4,010		)	(8,287		)	(10,778		)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards	(753		)	(606		)	(1,444		)	(1,119		)
Repurchases of Class A common stock	(1,369		)	(1,144		)	(2,618		)	(1,758		)
Principal payments on finance leases	(109		)	(142		)	(209		)	(267		)
Net change in overdraft in cash pooling entities	63			58			(17		)	(119		)
Other financing activities, net	16			4			114			9
Net cash used in financing activities	(2,152		)	(1,830		)	(4,174		)	(3,254		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	93			26			(127		)	(18		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(2,358		)	2,801			2,290			3,874
Cash, cash equivalents, and restricted cash at beginning of the period	23,927			11,197			19,279			10,124
Cash, cash equivalents, and restricted cash at end of the period	$	21,569		$	13,998		$	21,569		$	13,998

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	21,045		$	13,877		$	21,045		$	13,877
Restricted cash, included in prepaid expenses and other current assets	308			9			308			9
Restricted cash, included in other assets	216			112			216			112
Total cash, cash equivalents, and restricted cash	$	21,569		$	13,998		$	21,569		$	13,998



Reconciliation of GAAP to Non-GAAP Results
(In millions, except percentages)
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
GAAP revenue	$	18,687		$	16,886		$	36,423		$	31,963
Foreign exchange effect on 2020 revenue using 2019 rates	297						573
Revenue excluding foreign exchange effect	$	18,984					$	36,996
GAAP revenue year-over-year change %	11		%				14		%
Revenue excluding foreign exchange effect year-over-year change %	12		%				16		%
GAAP advertising revenue	$	18,321		$	16,624		$	35,760		$	31,536
Foreign exchange effect on 2020 advertising revenue using 2019 rates	295						571
Advertising revenue excluding foreign exchange effect	$	18,616					$	36,331
GAAP advertising revenue year-over-year change %	10		%				13		%
Advertising revenue excluding foreign exchange effect year-over-year change %	12		%				15		%

Net cash provided by operating activities	$	3,878		$	8,615		$	14,878		$	17,924
Purchases of property and equipment, net	(3,255		)	(3,633		)	(6,813		)	(7,470		)
Principal payments on finance leases	(109		)	(142		)	(209		)	(267		)
Free cash flow ⁽¹⁾	$	514		$	4,840		$	7,856		$	10,187