business competitive. threat success.


compete with companies providing connection sharing discovery communication products services online advertising tools advertising campaigns. face competition including companies create share communicate discover content online reach audiences. compete attract engage retain products businesses free paid business advertising services developers applications. compete with companies consumer hardware virtual augmented reality products services. expect additional competition introduce new products metaverse new technologies AI.


current potential competitors may have greater resources experience stronger competitive positions in product segments regions user demographics. competitors domiciled in different countries to political legal regulatory regimes. respond to new technologies market conditions. some users younger with other products services our reduced use engagement our. updates to improve user experience safe age-appropriate changes may time spent engagement. users with other products may decline in use engagement in key user demographics business harmed.


competitors may develop products services similar greater acceptance undertake-reaching campaigns adopt aggressive pricing policies. competitors may gain competitive advantage acquisitions limiting ability deliver target measure imposing fees making access products difficult integrating competing platforms applications into. Apple Google integrated competitive products with iOS Android. Apple released changes to iOS ability target measure ads. competitors may acquire engage users generate advertising revenue at expense affect business financial results. take actions to competitive threats assure successful not affect.


believe ability compete depends factors control including popularity usefulness ease performance reliability size composition user base engagement ability attract retain businesses services timing market acceptance products developments enhancements


safety security protect user data control distribute products monetize frequency size format quality prominence ads •customer service support selling measure effectiveness compelling return investments developers' interest applications publisher interest integrating content •changes legislation regulatory authorities litigation effect •acquisitions consolidation competitors attract retain motivate talented employees software engineers designers product managers cost-effectively manage operations reputation brand strength.


compete user base engagement ad impressions decrease less attractive developers marketers revenue results.


financial results difficult.


quarterly financial results fluctuated will future. limited operating history difficult to forecast future results. rely past results indicators future performance. risks uncertainties evolving markets. financial results influenced by factors unable predict outside control maintain grow user base engagement attract retain marketers recognize revenue collect payments •fluctuations spending due to seasonality events frequency prominence size format quality of ads success technologies display ads


•changes third-party policies advertising including changes mobile operating system browser providers Apple Google pricing ads products diversification growth revenue sources beyond Facebook Instagram revenue from Payments sale consumer hardware •changes existing products development new behavior product changes traffic to marketing sales operating expenses costs data centers technical infrastructure privacy safety security content review efforts changes development manufacturing delivery consumer hardware gross margins operating margins acquisitions amortization investments impairment abandonment assets real property lease data center assets obtain equipment components labor for data centers technical infrastructure failures outages government blocking ads •breaches security privacy costs remediation inaccessibility due third-party actions •fees third parties for content distribution •refunds concessions advertisers-based compensation acquisition-related •adverse litigation judgmentssettlements litigation costs legislative privacy data protection antitrust content AI actions fines orders consent decrees tax rate income. share-based compensation integrating intellectual property


changes business structure legal tax settlements elections impact changes tax laws interpretations affect effective tax rate obligations tax examinations Internal Revenue Service currency exchange rates revenue expenses foreign currencies •trading activity share repurchase program market values marketable securities non equity securities interest rates incurrence indebtedness refinance indebtedness U. accounting principles regional global business macroeconomic geopolitical conditions impact.


affects business.


receive high media coverage. reputation affected by unfavorable publicity privacy practices advertising policies product decisions quality regulatory activity government surveillance advertisers developers use for illicit ends community standards terms service policies actions users quality integrity content impacts user well-being management actions companies. subject media coverage political speech advertising hate speech content user well-being issues negative publicity. September 2021 media coverage allegations release internal documents former employee. subject negative publicity misinformation illicit use geopolitical events elections. negative publicity engagement loyalty user base marketer demand advertising decreased revenue business financial results experienced effects varying.


risk catastrophic events crises business operations.


subject risk public health crises pandemics earthquakes adverse weather natural disasters terrorism geopolitical conflict security threats power loss cyber-attacks. COVID-19 pandemic impacted business. preventative measures travel bans business quarantines shelter-in-place orders caused business slowdowns shutdowns. led volatility demand pricing advertising services may similar effects future. expose business operations workforce to risks •volatility user base engagement product development reductions manufacturing sales inventory supply labor shortages volatility financial markets currency capital •illnesses employees inefficiencies delays disruptions volatility uncertainty in financial projections.


developments affect business harm reputation actions.


incur expenses investments Reality Labs operating margin profitability. investments business financial performance harmed.


incur expenses business expect increase user base content data develop products market promote brands expand technical infrastructure invest technologies AI machine learning privacy safety security content review. undertaken cost reduction measures challenging environment may affect business initiatives up-front charges outlays cash expenses. subject to settlements judgments fines penalties legal regulatory developments. investments new platforms technologies building metaverse. investments Reality Labs limited revenue reduced operating margin profitability expect adverse financial impact. investments Reality Labs reduced 2023 profit $16. 12 billion expect losses increase 2024. If investments successful business financial performance.


business technical infrastructure disruption damage reputation loss users engagement affect financial results.


reputation users reliable performance products services technical infrastructure. experienced may experience interruptions availability performance. systems may not designed operate reliability redundancy delays outages. If products services unavailable load quickly users use ads disrupted affect business financial performance. experienced issues varying. information products usage patterns operational demands grow AI technologies need increasing technical infrastructure network capacity computing power. possible may fail scale grow technical infrastructure demands affect user engagement advertising revenue. business subject to interruptions delays failures from earthquakes adverse weather


disasters power loss terrorism geopolitical conflict security threats cyber-attacks catastrophic events crises. Global climate change natural disasters intense effects. service disruptions outages recover infrastructure data affect financial results. increased energy costs products services.


technical infrastructure provided by third parties. disruption could harm traffic business. financial difficulties may affect business control increases vulnerability to problems. experienced expect challenges with supply chain infrastructure. adjusted may procurement practices evolving landscape. may secure components equipment services from to procure on unfavorable terms.


developments may performance products services require changes delay future affect business financial results.


experienced difficulties building operating infrastructure.


designed built data centers technical infrastructure plan to expand infrastructure through data centers subsea terrestrial fiber optic cable systems other projects. infrastructure expansion complex involves projects multiple locations including developing regions anti-corruption trade compliance political challenges. changed suspended terminated projects may continue. delays disruptions shortage labor approvals geopolitical challenges actions may lead to costs operational inefficiencies interruptions degradation quality reliability impairment assets balance. rely on third-party equipment components for technical infrastructure manufactured small operations in Asia. delays disruptions conflicts result tariffs sanctions export controls trade reduce suppliers manufacturers providers limit ability purchase components infrastructure.


issues related infrastructure not identified during testing phases evident after equipment could degrade user experience increase costs. technical infrastructure outside United States action foreign government interrupt delivery degrade quality negative user experience increase costs. events affect business reputation financial results.


inaccuracies community harm reputation business.


key metrics Family average revenue Facebook average revenue calculated internal company data activity user accounts. numbers based estimates user base challenges measuring usage products online mobile populations. methodologies metrics


judgment susceptible to algorithm technical errors. estimates user base change methodology. review processes calculating metrics discover inaccuracies adjustments adjustments historical metrics. recalculate metrics impacted by data limitations different methodologies. update Family metrics inaccuracies adjustments within error margins.


Family Facebook metrics differ third parties due methodology data limitations challenges measuring populations. Family metrics exceed populations third parties.


community have accounts on more products some multiple within product. Family metrics count total accounts across products reflect size community. metrics represent estimates using Facebook Instagram Messenger WhatsApp. require common or link accounts multiple products attribute multiple accounts. metrics rely complex techniques algorithms machine learning models matching multiple accounts counting as one person. techniques models require judgment subject to data limitations statistical variances uncertainties. estimate potential error metrics based on user survey data subject to error. error margin approximately 3% of worldwide MAP. difficult to attribute multiple accounts possible numbers using products may vary from estimates. metrics may indicate changes user numbers.


estimates Family DAP use machine learning models developed limited user accounts calibrated against survey data. apply judgment designing models calculating estimates. match accounts use similar device information IP addresses user names. calibrate models against data user surveys subject to error. timing results Family metrics. data limitations affect understanding business increase risk error. techniques models rely data signals products some. limited visibility encrypted products fewer data signals WhatsApp accounts rely on phone numbers device information match. loss of access to data signals regulatory requirements may impact stability accuracy Family metrics. estimates may change methodologies evolve new data signals technologies product changes improvements surveys algorithms machine learning. evolution may identify undetected violating accounts.


evaluate Family metrics percentage MAP "violating accounts. define accounts terms service bots spam. fourth quarter 2023 estimated 3% worldwide MAP violating accounts. estimation based internal review limited judgment. look information Facebook Instagram accounts inauthentic


visibility WhatsApp activity due to encryption. if person violating accounts include in estimation. disable accounts make product changes reduce violating accounts reduce DAP MAP estimates. Violating accounts difficult to measure actual number may vary from estimates.


evaluate Facebook metrics "duplicate "false" accounts. duplicate account user principal account. divide "false accounts into two categories user-misclassified accounts personal profiles for business organization non-human entity (2) violating accounts profiles bots spam. estimates duplicate false accounts based on internal review limited sample judgment. identify duplicate accounts use identical IP addresses similar user names false accounts for names fake behavior inauthentic. loss of access to data signals product decisions regulatory requirements may impact estimates. estimates may change methodologies evolve new data signals technologies product changes. Duplicate false accounts difficult to measure actual number may vary from estimates.


fourth quarter 2023 estimated duplicate accounts 10% worldwide MAUs. higher developing markets Philippines Vietnam developed markets. quarter 2023 false accounts 4% worldwide MAUs. estimation false vary spikes Indonesia Vietnam Nigeria. disable accounts product changes reduce duplicate accounts reduce DAU MAU estimates.


data limitations affect business. user-provided data decline younger age unreliable inaccurate age. understanding usage age group.


data geographic location estimated based IP address self-disclosed location. not reflect actual location. user Facebook from proxy server actual location. methodologies susceptible to errors estimates revenue by location device affected by.


we provide rely on metrics estimates including reach effectiveness ads. metrics involve estimations judgments subject to software bugs inconsistencies human error. change due to terminology methodology loss access to data signals. subject to marketer regulatory inquiries accuracy metrics. marketers developers investors metrics discover inaccuracies subject to liability reputation harmed less allocate budgets resources products affect business financial results.


assure manage scale.


employee headcount scale complexity business increased. challenges for management operational financial resources managing relationships with users marketers developers third parties maintaining information technology systems controls procedures. some management experience large global may manage scale. maintain operational financial management processes systems manage headcount facilities train personnel. personnel work remotely challenges productivity collaboration. organizational changes efficiency priorities. 2022 2023 initiatives restructurings employee layoffs office facilities results. risks costs adverse effects employee retention difficulty managing scale complexity. delays product development initiatives legal regulatory compliance disruptions. management structures maintain corporate culture products. affect business reputation financial results.


international operations business economic legal risks financial.


international operations. Facebook in 100 languages offices in 40 countries. may enter new regions limited experience marketing selling deploying products. products available globally regions legal regulatory complexities. products not available in China. outsource operational functions to third parties. fail deploy oversee international operations business may suffer. subject to risks •political social economic instability legal regulatory government scrutiny. foreign privacy tax protection licensing damage brand reputation compliance local laws difficulty reviewing content enforcing community standards currency exchange rates •foreign exchange controls tax regulations cash credit risk payment fraud difficulties integrating foreign acquisitions complying with foreign laws taxation content removal


data localization protection competition e-commerce regulatory oversight intellectual property staffing global operations travel infrastructure legal compliance locations equity tax events trade disputes armed conflicts pandemics.


manage conflicts business practices laws anti-corruption U. S. Foreign Corrupt Practices Act U. K. Bribery Act 2010. import export controls trade restrictions sanctions. Office of Foreign Assets Control. civil criminal penalties violations anti-corruption import export controls trade restrictions.


unable expand manage global operations financial results affected. required cease modify operations products services regions risks affect business user growth financial results.


design manufacturing supply chain risks hardware financial results.


face risks related design manufacturing supply chain management consumer hardware products. products sell quality issues design manufacture software. issues caused by components other. brand financial results affected by quality issues failures expectations defective.


rely on third parties consumer hardware risks. manufacturing depends on small third parties operations in Asia. experienced supply labor shortages disruptions logistics shipping delays impact operations product development sales. third parties meet obligations adverse changes pricing terms. manufacturing distribution sale impacted by macroeconomic conditions geopolitical challenges trade disputes actions governments international conflicts tariffs sanctions export controls trade supply shortages increased costs logistics disruptions.


require suppliers partners hardware comply laws policies sourcing labor trade compliance health safety environment business ethics control. unethical corrupt-compliant supply disruptions government action fines canceled orders damage reputation.


face inventory risk.


exposed to inventory risks consumer hardware products rapid changes product cycles pricing unsafe defective merchandise supply chain disruptions consumer demand spending tastes. demand date sale. predict avoid difficulties predicting demand. new product international regions difficult to establish vendor relationships determine product selection forecast demand. acquisition of inventory components lead-time prepayment not returnable. affect operating results.


plan acquisitions strategic transactions impact financial affect price common stock.


business strategy made intend continue acquisitions add specialized employees companies products technologies enter strategic transactions. may find acquisition candidates complete acquisitions favorable terms including regulatory challenges. completed divestiture Giphy 2023 Kingdom Competition Markets Authority order. acquisition FTC acquisition Within Unlimited. costs substantial no assurance synergies monetization opportunities favorable return on investment.


pay cash incur debt acquisitions transactions affect liquidity. obligations interest expense operations. issue equity securities acquisitions grant restricted stock units employees increase expenses affect financial results dilution. acquisitions transactions viewed negatively marketers developers investors affect business price Class A common stock.


discover liabilities deficiencies claims companies not identified unanticipated costs. effectiveness due diligence review results accuracy statements disclosures actions companies representatives limited time acquisitions. may fail forecast financial impact acquisition including tax accounting charges. Acquisitions additional expenses finite-lived intangible assets on balance sheet. affect financial condition results.


integrate acquisitions incur costs integrate support.


integration acquisitions requires time resources companies operations may not manage. made investments acquisitions operating expenses diversion resources management attention from business. assure investments successful. If fail integrate companies may realize benefits business harmed.


involved class action lawsuits expensive time consuming harm business financial.


involved in lawsuits class action claim damages changes business anticipate target lawsuits. user base plaintiffs claim enormous damages harm. faced class lawsuits advertising antitrust privacy security biometrics content algorithms copyright user well employment contingent workers consumer protection product performance consumer hardware software virtual reality technology. subject class action suits platform user data practices misuse data earnings results second quarter 2018 Instagram WhatsApp anticompetitive conduct former employee allegations release documents 2021 fourth quarter 2021 inflated estimates audience size increased demand higher prices. subject of lawsuits facial recognition harmful content third-party websites copyright-protected content AI models Facebook Instagram media addiction violations Children's Online Privacy Protection Act (COPPA).results lawsuits negative outcome damages fines undesirable changes products business practices business financial condition results operations affected.


no assurances favorable final outcome defending lawsuit costly burden management employees. litigation onerous unfavorable judgment damages fines settle lawsuits unfavorable terms affect business financial conditions results operations.


anticipated tax liabilities.


tax obligations income non-income based on corporate structure intercompany arrangements business intellectual property valuations transactions. tax laws subject to interpretation tax revenue. subject to review audit by U. S. federal state foreign tax authorities. disagree positions valuing arrangements adverse outcome increase tax rate non-income taxes harm financial position cash flows. 2018 IRS issued assessments transfer pricing foreign subsidiaries 2010 2013 tax years. disagree litigating resolution uncertain affect financial results.


worldwide provision income taxes requires judgment management many transactions tax determination uncertain. provision taxes determined by business changes affect tax rate. provision taxes tax liabilities reasonable settlement differ financial statements affect financial results.


future income tax rates volatile profit deferred tax assets tax laws accounting principles.


tax laws financial position cash flows.


tax regimes including income non-income unsettled change. Changes tax laws rulings interpretations affect financial position results cash flows. 2017 Tax Cuts and Jobs Act) 2017 tax obligations tax rate fourth quarter 2017. additional regulatory accounting guidance actions increase tax obligations impact effective tax rate future. countries proposed changes tax laws new laws increase tax obligations.


Organization for Economic Cooperation Development working on Base Erosion Profit Shifting Project tax obligations countries. July 2023 140 countries approved framework minimum tax rate 15%. subject to negotiation timing impact changes tax uncertain. European Commission countries proposals current tax framework. proposals include changes income tax non-income taxes based on percentage revenue. jurisdictions proposed taxes digital services business.


European Commission investigations treatment state aid rules concluded Ireland provided illegal state aid. investigations tax treatment foreign operations.


international business activities changes taxation could increase tax rate non-income taxes harm financial position results cash flows. changes apply to operations taxes greater financial statements.


share-based compensation tax rate varied depending stock price.


tax effects share-based compensation impacted tax rate. stock price varies from grant price excess tax benefits impact tax rate. 2023 excess tax benefits decreased provision income taxes $708 million effective tax rate one percentage point. future stock price varies tax rate. amount value share-based compensation earnings impact tax rate. tax effects dependent on stock price decline increase tax rate affect financial results.


goodwill assets impaired charge earnings.


review intangible assets for impairment when value stock price market capitalization. test goodwill for impairment unit annually. If impaired impairment loss carrying amount fair value recognized. record significant charge in financial statements impairment results.


loss key personnel failure attract personnel harm business.


depend on services key personnel including Mark Zuckerberg. high-risk activities combat extreme recreational aviation risk injury death. Zuckerberg unavailable adverse impact operations. loss key personnel engineering marketing sales disrupt operations.


guarantee attract retain personnel competitive position. challenges hiring specialized technical personnel senior engineering talent competition. incentives attract retain motivate equity awards future arrangements effective issue equity retain incur share-based compensation expense ownership stockholders diluted. ability attract retain motivate affected by stock price volatility. restrictive policies developments affect efforts attract hire retain. If attracting hiring unable grow.


CEO decision majority voting power capital stock.


Mark Zuckerberg founder Board Chair CEO voting rights majority power capital stock outcome matters including election directors merger consolidation sale of assets. concentrated control could delay defer prevent change control merger consolidation sale assets support or consummation transaction. control discourage investor acquiring Class A common stock harm trading price. Zuckerberg management strategic investments CEO election replacement directors. death shares capital stock. Zuckerberg transferred to designated. board member officer. Zuckerberg owes fiduciary duty stockholders act in good faith best interests stockholders. Zuckerberg entitled vote shares in own interests.


guarantee repurchase program stockholder value. repurchases dividend payments increase diminish cash reserves.


board authorized share repurchase program expiration date obligate amount acquire shares Class A common stock. specific timing amount


dividend payments depend share prices economic market conditions company performance. guarantee repurchase program enhance stockholder value. dividend payments affect trading price increase volatility termination trading price. cash reserves.


no assurance dividends.


February 1, 2024 announced initiation quarterly cash dividend. payment subject capital availability market conditions laws agreements board directors interests stockholders. declaration payment discontinued reduced no assurance dividends.


governments restrict access Facebook products censor content impair advertising harm business financial results.


Governments censor content Facebook products restrict access impose restrictions accessibility. access to Facebook products restricted in China Iran North Korea. authorities other countries restrict access violation threat public safety products restricted. 2020 Hong Kong adopted National Security Law obtain information remove block access content suspend services if violation use products restricted. Hong Kong expected pass additional national security legislation in 2024. if changes marketing sales operations Hong Kong National Security Law revenue business adversely affected. war in Ukraine 2022 access Facebook Instagram restricted in Russia services prohibited by Russian government affected revenue business.


possible government authorities advertising including countries access blocked. we generate revenue from small resellers China possible Chinese government China advertising revenue trade dispute content issues information requests Hong Kong other imposing taxes penalties affect financial results.


if we of compliance with legal requirements Turkey Turkish government could reduce advertising revenue impact access to products. content on Facebook or products access restricted in countries required to changes operations restrictions imposed on competitors new markets or restrictions retain increase user base engagement advertising may affected maintain grow revenue financial results.


business subject U. foreign laws regulations privacy data content competition safety e-commerce. laws change claims changes penalties cost declines user growth engagement harm business.


subject laws privacy data younger biometrics encryption publicity content integrity intellectual property advertising marketing distribution security retention deletion localization storage disclosure AI machine learning electronic contracts competition minors consumer protection civil rights accessibility telecommunications liability e taxation trade controls anti-corruption securities online payment. new products expansion laws scrutiny. foreign data privacy competition consumer protection laws fines.


U. S. federal state EU international laws regulations enforced by private parties government entities evolving change. application interpretation enforcement uncertain new evolving industry inconsistently with current policies practices. regulatory legislative actions content services use data advertising affect user growth engagement. actions services financial results fines calculated based on global revenue.


subject to evolving laws data critical operations products services. 2016, European Union United States transfer framework Privacy Shield invalidated July 2020 by Court of Justice. Standard Contractual Clauses regulatory judicial scrutiny. CJEU considered SCCs data challenge Irish Data Protection Commission. CJEU upheld May 12, 2023 IDPC Final Decision Meta Platforms Ireland SCCs Facebook data GDPR. issued administrative fine EUR €1. 2 billion corrective orders Meta Platforms suspend transfers compliance Chapter V GDPR unlawful processing data. appealing decision corrective orders subject interim stay Irish High Court.


March 25, 2022 European Union United States EU-U. Data Privacy Framework. October 7, 2022 President Biden signed Executive Order Safeguards Activities. June 30, 2023 European Union three countries EEA States Attorney General state Section 3(f) E. July 10, 2023 European Commission decision United States. States ensures protection personal data European Union Privacy Framework List Department Commerce. DPF adequacy decision milestones corrective orders. increase cost complexity delivering products services Europe. DPF replaces adequacy frameworks invalidated CJEU. invalidation.


uncertainty offer significant products services Facebook Instagram Europe business financial condition results operations.


subject to legislative regulatory developments could affect business. implemented product changes controls European General Data Protection Regulation may implement changes. GDPR requires personal data breach notifications to regulator IDPC includes penalties for non-compliance. interpretation GDPR evolving decisions IDPC privacy regulators may lead to changes outcome. interpretation enforcement GDPR penalties for non-compliance uncertainty could business operations. Brazil United Kingdom other countries enacted data protection regulations. California Consumer Privacy Act establishes transparency rules data privacy rights limitations sensitive personal information control data. Other states proposed privacy laws rights controls. laws evolving subject to interpretation limitations on advertising services affected advertising business. Some states proposed laws privacy rights controls for users under 18 parents guardians.privacy laws evolving restrict products services affecting advertising business. Europe regulators ePrivacy Directive cookies technologies impose measures. ePrivacy Directive national laws impose use data include penalties non-compliance. Changes products business practices advertising business. plans to change legal basis behavioral advertising Facebook Instagram to "consent 2023 "subscription for no ads" alternative. with regulators new consent model compliance GDPR DMA EU consumer laws. developments may impact user growth engagement revenue financial results.


legislative proposals laws European Union United States federal state level jurisdictions could impose obligations business. DMA European imposes restrictions data mergers acquisitions product design. includes penalties non-compliance enforceable against gatekeeper companies March 2024. DMA compliance costs changes products business practices. requirements subject to interpretation regulatory engagement. proposals competition laws United States jurisdictions could effects. Digital Services Act (DSA) European Union August 2023 restrictions compliance costs. includes penalties non-compliance. countries India Turkey legislation data protection competition requirements local storage processing changes products cost complexity fines penalties. legislation information minors advertising services products services.


laws regulations claims government actions led unfavorable outcomes compliance costs loss revenue delays new products negative publicity costs diversion management remedies fines orders practices.


subject to regulatory investigations enforcement actions settlements expect continue future incur costs change business practices adverse.


receive inquiries from compliance laws evolving interpretation. expect investigations data requests actions audits United States Europe privacy data use protection processing sensitive data advertising security minors safety law enforcement consumer protection civil rights content moderation illegal activity competition AI machine learning. subject to regulatory orders consent decrees. data protection competition consumer protection authorities initiated actions orders impose sanctions. subject investigations regulation employment credit financial. March 2018 subject to FTC state attorneys general government inquiries platform user data practices misuse data developer. July 2019 settlement modified consent order resolve FTC inquiry April 2020 enhance practices privacy compliance oversight. state attorneys general inquiry government inquiries ongoing.FTC consent order initiated proceeding alleges deficient compliance violations Children's Online Privacy Protection Act Rule Section 5 Federal Trade Commission Act seeks changes business. If unsuccessful order subject limitations launch products use data under 18. notify IDPC regulators personal data breaches privacy issues subject to inquiries investigations. subject to penalties fines requirements change business practices. subject lawsuit Texas "tag suggestions facial recognition technology.


subject to inquiries competition authorities United States Europe jurisdictions business users advertisers. concern social networking messaging digital advertising mobile applications acquisitions. 2019 antitrust inquiries FTC U. S. Department of Justice. 2020 lawsuit FTC antitrust laws acquiring Instagram 2012 WhatsApp 2014. complaint seeks injunction relief divestiture reconstruction Instagram WhatsApp. December 2022 European Commission Statement Objections Facebook Marketplace competition rules. subject government inquiries investigations business disclosure practices. September 2021 release documents former employee.


Orders enforcement actions government authorities costs expose civil criminal liability penalties monetary interrupt change business practices adverse negative publicity reputational harm divert resources time attention management subject structural remedies experienced adverse effects varying degrees.


FTC GDPR CCPA ePrivacy Directive DMA DSA requirements resources business practices compliance failures business reputation financial results.


engaged in privacy compliance oversight modified consent order FTC GDPR regulatory legislative requirements CCPA ePrivacy Directive DMA DSA Korean Personal Information Protection Act Indian Digital Personal Data Protection Act. maintaining privacy program FTC consent order management oversight operational requirements reporting obligations prohibitions misrepresentations data assessments third-party assessor challenging costly. compliance systems resources require investments compliance processes personnel technical infrastructure. reallocate resources business initiatives. require modifications business practices product development difficult time-consuming costly. ability develop launch new features products services affected. privacy compliance oversight time attention from management board directors. FTC consent order privacy-related laws complex apply notify authorities compliance privacy issues expect. regulatory legislative privacy requirements evolving change interpretation.subject restrictions requirements DMA data services product design interpretation regulatory engagement.


FTC initiated proceeding alleging deficient compliance seeking modifications prohibition use minors' data changes board limitations modify launch products. challenging FTC proceeding. If challenge unsuccessful order provide features services business practices increase time resources costs compliance oversight business financial results.


unable implement FTC consent order future modifications GDPR. state privacy laws CCPA ePrivacy Directive DMA DSA regulatory requirements authority subject to investigations lawsuits fines judgments penalties remedies required changes business practices. business reputation financial results.


incur liability information internet published products claims related legislation change products business practices affect business financial results.


faced claims inquiries products policies algorithms enforcement actions. business exposes claims defamation misinformation deceptive advertising discrimination harassment intellectual property rights publicity privacy personal injury hate speech safety well-being violence terrorism improper illicit drugs human exploitation child exploitation illegal gaming products liability consumer protection breach contract. increase claims younger users harmful content. litigation ad targeting delivery practices anti-discrimination laws.


potential risks claims enhanced jurisdictions outside States protection unclear less protected. April 2019 European Union passed expanding online platform liability copyright infringement regulating news content states implemented laws. Union revised European Audiovisual Media Service Directive online video-sharing platforms implementing. 2023. Supreme Court protections Communications Decency Act declined address 230. concerning efforts remove restrict protections Section 230 new obligations commerce listings user access content counterfeit goods copyright-infringing material protections could decrease change. incur costs defending damages.


face fines orders restricting services remedies content. legislation Germany India fines for content removal law enforcement cooperation disclosure obligations. countries Europe Middle East Asia-Pacific Latin America considering legislation penalties bans for failure remove content processes. subject to fines social media legislation Turkey fines Russia. Content-related legislation change products practices increase costs impact operations geographies. European Copyright Directive requires services authorizations for copyrighted content investments compliance. laws require pay for content. products services subject to restrictions compliance costs Digital Services Act European Union Online Safety and Media Regulation Act Ireland Online Safety Act United Kingdom. countries pay publishers for news content. removed news content for on Facebook Instagram. changes protections under Section 230 First Amendment to U. S.legislation costs changes products practices affect user growth engagement.


events affect business financial.


Payment activities regulatory requirements actions risks costly harm business.


products offer Payments functionality purchase digital goods send money donations charitable organizations. subject to laws regulations United States Europe anti-money laundering counter-terrorist financing money transmission stored value gift cards prepaid electronic funds transfer virtual currency consumer protection charitable fundraising economic sanctions import export restrictions. new consumer protection laws regulations payments activity sharing collection use data. laws gambling banking. some. received payments licenses United States European Economic Area jurisdictions for products activities. licenses increase flexibility mitigate regulatory uncertainty compliance with domestic laws. costly management time guarantee compliance. to fines penalties cease desist order product changes business financial results.


subject to risks Payments transactions increased costs diversion management time potential fraudulent activity restrictions investment consumer funds additional disclosure reporting requirements. launched payments functionality applications may undertake payments initiatives risks licensing requirements.


Security breaches improper hacking phishing attacks incidents harm reputation business.


industry prone to cyber-attacks unauthorized access service. products services involve collection storage processing transmission large data. failure to prevent security breaches improper access personal payment loss modification disclosure destruction misuse harm business reputation competitive position. computer malware viruses social engineering scraping hacking prevalent. encounter attempts create false accounts purchase ads for spamming misinformation illegal ends. prominence size user base data evolving products services attractive target for breaches attacks states sophisticated state-sponsored well actors heightened risk geopolitical events. efforts undesirable activity increase risk retaliatory attacks. breaches may cause interruptions degrade user experience confidence impair systems financial harm.efforts protect company data disable undesirable activities software bugs technical malfunctions employee vendor error malfeasance social engineering cyber-attacks misuse data defects vendors' government surveillance breaches security threats. third parties


induce employees users disclose information access. Cyber-attacks evolve difficult detect. developed systems processes protect reduce loss misuse disable undesirable accounts detect security breaches provide absolute security assure react timely-attacks incidents remediation successful. business operations span geographies involve thousands employees contractors vendors developers partners third parties. face cybersecurity risks not discover vulnerabilities.


our developers partners ads may receive store information through mobile applications. We provide limited information to third parties scope services. if data security breach our may be improperly accessed used disclosed.


experience cyber-attacks security incidents varying incur costs protecting remediating. subject to laws regulations States cybersecurity data protection obligations consent order FTC. users authorities initiate legal actions security breaches improper access disclosure data expense liability modify business practices. incidents active user base engagement levels. events business reputation financial results.


September 2018 discovery third-party cyber-attack Facebook access tokens profile information 29 million accounts. Irish Data Protection Commission government inquiries. inquiries fines costs change business practices divert resources affect.


misuse services data undesirable affect business.


experienced expect intentional misuse services data by third parties undesirable illicit high-risk activity platform. in privacy safety security content review investigations audits enforcement efforts. discovered anticipate additional incidents misuse activity. discover all incidents data technical limitations lack visibility scale allocation may notified by independent privacy assessor government authorities media third parties.


incidents include data terms contracts policies false accounts election interference improper advertising safety violence terrorism illicit drugs child illegal spamming surveillance scraping data harvesting unsecured datasets misinformation fraudulent activity. unsuccessful policies prevent incidents.


Consequences developments include negative trust harm reputation brands changes business practices adverse financial results. developments additional litigation


regulatory inquiries penalties damages divert oversight.


products systems rely software hardware technical errors bugs vulnerabilities failures affect business.


products systems rely on software hardware third parties open source technical complex. depend on store retrieve process manage data. software errors bugs vulnerabilities subject to technical limitations compromise objectives. Some errors difficult to detect discovered after code released. September 2018 third-party cyber-attack vulnerability Facebook steal access tokens profile information from Facebook. Errors bugs vulnerabilities design defects technical limitations human error led to negative experience effects for users compromised delayed product introductions enhancements targeting measurement billing errors data intellectual property reductions in services. make commitments to users data systems subject to errors bugs technical limitations prevent fulfilling commitments.errors bugs vulnerabilities defects in systems software hardware failures limitations degradations interruptions service commitments damage reputation loss users marketers revenue regulatory inquiries liability fines damages affect business financial results.


unable protect intellectual property brands intangible assets business affected.


rely on confidentiality assignment license agreements with employees consultants third parties trademark copyright patent trade secret domain name protection laws protect proprietary rights. filed applications for protection intellectual property hold trademarks patents in acquired patents from third. Third parties may infringe rights challenge rights trademark patent applications approved. intellectual property protection not in every country. expend time expense prevent infringement enforce rights. protect proprietary rights no assurance others offer products similar. contribute software open source licenses technology include open source in products. AI trained on open source software outputs subject to license restrictions. license disclose code innovations increased litigation risk. If protection rights inadequate unauthorized use value brands assets competitors mimic products services. business financial results.


expect party patent trademark copyright lawsuits expensive time consuming impact business financial condition results operations.


Companies internet technology media industries own patents copyrights trademarks secrets enter infringement misappropriation. "non-practicing entities patents rights assert rights extract value from. introduce new products features increase exposure intellectual property claims competitors non entities.


receive notice from patent copyright trademark holders alleging products infringe intellectual property rights. involved in intellectual property lawsuits increasing competition products expect claims to grow. Defending litigation costly burden on management employees no assurances favorable final outcomes. plaintiffs may seek subject to preliminary rulings injunctions change operations. may settle lawsuits on terms unfavorable. if litigation resolved adversely subject to unfavorable judgment not reversed. require change cease operations pay amounts. may seek license to continue practices third rights increase operating costs expenses. may required to develop alternative non-infringing technology practices discontinue. effort expense less affect user experience. experienced unfavorable outcomes in business financial condition results could unfavorable resolution.


price Class A stock volatile.


trading price Class A common stock likely volatile. Since shares sold May 2012 $38. 00 per share price ranged from $17. 55 to $384. 33 through December 31, 2023. price fluctuated may fluctuate significantly factors beyond control fluctuations revenue operating results financial projections changes failure •actions securities analysts changes financial estimates failure meet expectations •additional shares sold acquisitions •investor sentiment •announcements significant products technical innovations acquisitions strategic partnerships joint ventures capital commitments


estimates changes user base engagement effectiveness ad products performance stock market valuations technology companies volume fluctuations stock market trends inclusion exclusion deletion stock from S&P 500 Index coverage business financial performance government actions developments advertising competition content privacy rulings tax judicial regulatory bodies activity share repurchase program events war terrorism pandemics disruptive events responses.


stock markets fluctuations equity securities technology companies. subject securities litigation platform user data practices misuse data earnings results second quarter 2018 former employee allegations internal documents September 2021 earnings results fourth quarter 2021. may litigation volatility. litigation could costs divert resources affect.


dual class structure common stock voting control CEO holders B corporate matters.


Class B stock ten votes Class A one vote. Holders B founder Board Chair CEO hold majority voting power control outcome matters shares B represent 9. 1% Class A B. concentrated control corporate matters.


Transfers by holders Class B common stock shares to Class A exceptions estate planning. conversion B to voting power of holders B long term. If Mr. Zuckerberg retains Class B stock control majority voting power capital stock.


company Class A stock harm stock price.


qualify as "controlled company under Nasdaq-listed not required majority independent compensation committee independent nominating function. future could elect. interests controlling stockholder differ other stockholders may same protections. status controlled company could make Class A common stock less attractive harm stock price.


Delaware law bylaws merger contest price Class A common stock.


Delaware corporation anti-takeover Delaware General Corporation Law discourage change control business combination with interested stockholder three years after. current certificate incorporation bylaws acquisition difficult shares Class B common stock less than 35% voting power transaction change control requires approval majority Class B stock dual class common stock structure.Zuckerberg matters stockholder approval if owns less than majority Class A B common stock B less than majority amendments to bylaws require approval two-thirds B majority vacancies board filled by board directors not stockholders B less majority classified into three classes staggered three-year terms removed from office for cause B less than majority stockholders action at meeting not written consent board chair chief executive officer president majority authorized to call special meeting •advance notice procedures apply for stockholders nominate candidates matters annual meeting certificate incorporation authorizes undesignated preferred stock shares issued without stockholder approval litigation brought in Delaware.


Meta cybersecurity risk management. industry prone experience incidents varying. attractive target prominence scale personal data evolving products services. reach billions collection storage processing large data. business operations span involve thousands employees contractors vendors developers partners rely software hardware technical complex. maintain information security program policies controls cybersecurity risk. face risks discover vulnerabilities. enhance security program risk management.


use risk management framework laws regulations industry standards practices cybersecurity risks products services infrastructure corporate resources. evaluate threat intelligence vulnerabilities regulatory requirements incidents. conduct risk assessments systems processes identify remediation. engage third-party security experts consultants. maintain privacy risk management program data independent third-party privacy assessor. internal audit provides assessment cybersecurity privacy programs control frameworks. risk decision-making cybersecurity countermeasures mitigation strategies. include technical operational measures annual privacy training employees.


maintain policies third-party security risks including assessment) process. gather information from third parties Meta assess risks. require third parties maintain security controls protect confidential information notify data breaches.


board of directors strategic business risk management delegated cybersecurity risk to audit & risk oversight committee. management processes identify evaluate cybersecurity risks processes programs manage mitigate incidents. privacy committee oversees risks privacy data use compliance privacy program. Management identifying assessing managing cybersecurity risks processes mitigation measures cybersecurity policies reports to.


Chief Guy Rosen leads cybersecurity program oversees teams. private public sectors technology industry regions. two decades experience cybersecurity software development product management technology. leadership roles since 2013, security safety integrity CISO 2022.


. Rosen leadership operational technology organizations.


cybersecurity teams monitor prevention incidents report CISO. CISO updates Audit Risk Committee cybersecurity program risks incidents mitigation strategies.


2023 cybersecurity threats business strategy financial condition. eliminate risks incidents. additional information Part I Item 1A "Risk Factors Annual Report Form 10-K.


headquarters Menlo Park California. December 31, 2023 owned leased 10 million square feet office three million square feet unoccupied sublease abandon. owned leased 62 acres growth.


offices 90 cities Middle East Africa Latin. 21 data center.


Note 3 statements Part II Item 8 Annual Report Form 10-K consolidation.


believe facilities current.


multinational company complex business expect subject to claims litigation regulatory tax government inquiries legal proceedings. believe merit may not successful. litigation resolved adversely unfavorable judgment not reversed. settle litigation terms unfavorable. subject to orders consent decrees government regulatory authorities. developments could costs expose civil criminal liability penalties monetary change business practices negative publicity reputational harm divert resources time subject remedies. experienced outcomes expect face challenging litigation regulatory environment complex evolving laws regulations scale business size user advertiser base.


litigation investigations company increased no assurance. facing cases States plaintiffs Section 230 Communications Decency Act. subject new regulatory regimes Digital Services Act Digital Markets Act non-EU countries fining guidelines General Data Protection Regulation. responding litigation investigations role societal harms mental health safety impacts sexual exploitation illegal activity fraud discrimination.


tax antitrust stockholder privacy litigation. users revenue exposure damages fines increased.


instances novel legal claims new regulatory regimes statutes enforcement novel difficult assess likelihood potential liabilities fines penalties. identified matters material no assurance additional losses limitations from claims not asserted determined material.


March 20, 2018 class actions filed courts against us directors officers platform user data practices misuse data developer seeking damages injunctive relief. fraud consumer protection privacy cases consolidated. District Court Northern District California Facebook. Consumer Privacy Profile Litigation. September 9, 2019 court granted denied motion dismiss class action. December 22, 2022 settlement agreement payment $725 million. approved October 10, 2023 payment made November 2023. platform user data practices misuse. Federal Trade Commission state attorneys general government inquiries. settlement consent order FTC inquiry April 2020 penalty $5. 0 billion privacy compliance oversight. state government inquiries could fines costs change business practices divert resources affect.July 16, 2021 stockholder action Delaware directors officers fiduciary duty settlement FTC. July 20, 2021 stockholders complaint fiduciary duty directors. November 4, 2021 plaintiffs second complaint. Facebook. Litigation. January 19, 2022 motion dismiss denied May 10, 2023. insider trading dismissed except Mark Zuckerberg denied breach fiduciary duty.


May 3, 2023 FTC filed proceeding Facebook. changes modified consent order effect April 2020. District Court. changes prohibition minors' data changes board directors limitations modify launch new products. May 31, 2023 filed motion. Court. Facebook. enjoin FTC order. November 27, 2023 district court denied motion appealed. Court Appeals. Facebook. stay FTC proceeding resolution. January 12, 2024 court denied motion January 25, 2024 filed motion stay appeal. November 29, 2023 filed complaint. Platforms, Inc. constitutional challenges structure FTC enjoin FTC proceeding. December 13, 2023 FTC injunction dismiss complaint. argument enjoin March 1, 2024. not response due March 15, 2024 FTC amend order additional requirements.appeal FTC decision order request


court stay enforcement modifications appeal pending. unclear appeal.


notify Irish Data Protection Commission GDPR personal data breaches issues subject inquiries. May 12, 2023 IDPC Decision Meta Platforms Ireland Facebook data GDPR. issued fine EUR €1. 2 billion corrective orders suspend transfers compliance Chapter V GDPR unlawful processing data. appealing decision corrective orders interim stay Irish High Court. October 7, 2022 President Biden signed Executive Order Safeguards. June 30, 2023 European Union three countries EEA States Attorney General "qualifying state Section 3(f) E. O. July 10, 2023 European Commission decision United States. ensures protection personal data European Union Privacy Framework List. implementation. adequacy decision implementing comply corrective orders IDPC. Part II Item 1A business complex.foreign laws privacy data content competition safety e-commerce Annual Report Form 10‐K. inquiries IDPC fines costs change practices divert resources affect.


February 14 2022 Texas lawsuit. Meta Platforms. facial recognition Deceptive Trade Practices-Consumer Protection Act seeking damages relief. trial June 2024.


June 7, 2021 class actions filed information laws damages relief Meta Pixel Healthcare Litigation Tax Cases Frasco. Flo Health. Doe. Favor. GoodRx Holdings. Northern District California Rickwalder. Meta Platforms. California Supreme Court.


subject inquiries competition authorities United States Europe. social networking digital advertising mobile applications acquisitions. 2019 antitrust investigations FTC U. Department of Justice. December 9, 2020 FTC filed complaint. Platforms. anticompetitive conduct unfair competition 5 Federal Trade Commission Act 2 Sherman Act acquiring Instagram 2012 WhatsApp 2014 maintaining conditions access. FTC sought injunction relief divestiture reconstruction Instagram WhatsApp. June 28, 2021 court granted motion dismiss leave amend. August 19, 2021 amended complaint October 4, 2021 dismiss. January 11, 2022 court denied. class actions filed Kingdom violations antitrust laws acquisitions damages injunctive relief. cases consolidated


U. District Court Northern District California. Meta Platforms. January 14 2022 court denied motion dismiss consolidated actions. March 1, 2022 complaint filed class action advertisers. December 6, 2022 denied dismiss. European Commission Statement Objections Facebook Marketplace competition rules.


February 6, 2019 German Federal Cartel Office antitrust data sharing collection breached data competition law. lawsuit February 11, 2019. March 24, 2021 Higher Regional Court Düsseldorf referred questions GDPR. July 4, 2023 CJEU decision interests necessity data processing GDPR ads personalization.


litigation investigations subject monetary remedies costs interrupt business practices divert resources attention management remedies.


March 20, 2018 actions filed against us directors officers securities laws fiduciary duties platform user data practices misuse data seeking damages relief. July 27, 2018 two class actions filed federal against directors officers securities laws earnings results second quarter 2018 damages. actions consolidated. District Court Northern District California Facebook, Inc. Securities Litigation class action platform data practices. 2019 2020 district court granted dismiss claims. January 17, 2022 appeal October 18, 2023. Court Appeals Ninth Circuit.


subject government inquiries business disclosure practices. September 2021 former employee allegations documents algorithms advertising metrics content enforcement misinformation undesirable activity user well-being. additional requests. October 27, 2021 class actions filed. District Court Northern District California directors securities laws breach fiduciary duties damages. Ohio Pub. Meta Platforms,.


March 8 2022 class action. Northern California directors earnings fourth quarter 2021 damages Steamfitters. Meta Platforms. July 18 2023 dismissed Meta amend. September 18 2023 plaintiffs amended complaint.


January 2022 litigation federal state courts Facebook Instagram media addiction proceedings


under 18 mental health harms. class actions filed United States Canada school districts municipalities state filed public nuisance claims. October 6, 2022 federal cases. District Court Northern District California Media Adolescent Addiction. October 13, 2023 Los Angeles County Superior Court overruled claims. October 2023. states filed lawsuits. lawsuits include Children's Online Privacy Protection Act) consumer protection unfair business practices products liability harms under 18. lawsuits seek damages injunctive relief state attorneys general. state courts. subject government investigations products mental health safety impacts.


August 15, 2018 class actions filed demand prices. cases consolidated. District Northern California. Facebook. damages relief. 2019 2021 2022 dismissed permitted fraud unfair competition. March 29, 2022 granted class certification. June 21, 2022. Appeals Ninth Circuit granted September 12, 2023. case stayed appeal.


July 7, 2023 class actions filed. Court Northern District California. Meta Platforms. Chabon. Southern District New York. Meta Platforms. transferred. Northern California copyrighted books materials artificial seeking damages injunctive relief.


quarter 2024 Supreme Court Vivek. Murthy Surgeon. Missouri. federal First Amendment content moderation Netchoice. Paxton Moody. First Amendment content moderation tech platforms. Meta not defendant Supreme Court decision impact business.


subject to litigation law enforcement regulatory agencies Brazil Russia Europe legal obligations disclose user information. instances resulted fines penalties against. multiple legal grounds to satisfy prevail fines intend defend fines.


party legal proceedings claims regulatory tax inquiries business expect proceedings disputes future.


Registrant Equity Purchases Securities


Class A stock Nasdaq Global Select Market 'META. replaced offering 2012. no public market.


Class B stock public market.


December 31, 2023 3,098 stockholders Class A stock closing price $353. 96 per share Nasdaq Global Select Market. shares brokers estimate total. 23 stockholders Class B stock.


2024 declared cash dividend. February 1 2024 cash dividend program. $0. 50 A $2. 00 share annual. dividend paid March 26, 2024 business February 22, 2024.


future cash dividends subject to declaration board directors based on capital market conditions laws agreements stockholders.


table summarizes share repurchase months December 31, 2023 Shares Purchased Price Paid Share Programs Value Shares Purchased October 1 - 31, 2023. November 1 - 30 2023 December 1 - 31, 2023.


November 18 2016, repurchase program Class A commenced January 2017 expiration. January 2024 $50 billion repurchases. price business conditions investment opportunities privately trading plans Rule Exchange Act. Note 13 Stockholders' Equity Part II Item 8 Annual Report Form 10-K.


price share 1% excise tax Inflation Reduction Act 2022.


performance graph not material SEC Section 18 Exchange Act subject liabilities incorporated filing Meta Platforms. Securities Act 1933 Exchange Act.


graph return Class A common stock Dow Jones Internet Composite Index Standard & Poor's 500 Stock Index Nasdaq Composite Index five years 2023. $100 invested 2018 Class A common stock Meta Platforms. DJINET S&P 500 Nasdaq Composite. performance indicative future.


read financial condition results consolidated financial statements notes Part II Item 8 Statements Supplementary Data Annual Report Form 10-K. forward-looking statements plans estimates beliefs. results differ. Factors differences include Part I Item 1A "Risk Factors. limitations community metrics "Limitations Key Metrics Other Data.


consolidated financial statements accounting principles revenue constant currency free cash flow non-GAAP measures. Revenue Exchange Impact Revenue. translated revenue 2023 2022 exchange rates currencies. dollar. free cash flow non-GAAP Capital Resources—Free Cash Flow.


non-GAAP financial measures not substitute for financial information GAAP. measures different from usefulness for comparison. revenue constant currency for year-over-year comparison changing foreign currency exchange rates operating results. non-GAAP measures provide supplemental information financial performance enable comparison periods allow transparency key metrics.


mission give power community world.


financial results community metrics 2023. total revenue $134. 90 billion 16% advertising revenue. 15%. Ad impressions increased 28% offset average price ad.


2023 $46. billion. billion 62% 2022 advertising.


report financial results Family of Apps Reality Labs. FoA includes Facebook Instagram Messenger WhatsApp services. RL augmented mixed virtual reality hardware software content. Apps Labs Ended December millions Revenue,450,609 Costs expenses,789,665 Income operations,661,944 Operating margin income $39. 10 billion diluted earnings per share $14. 87 year December 31, 2023. expenditures payments finance leases $28. 10 billion.tax rate 17. 6%. securities $65. 40 billion.-term debt $18. 39 billion. 67,317 22%.


2022 initiated efficiency priorities. 2023 completed data center employee layoffs facilities consolidation.


summary restructuring charges adjustments year ended December 31, 2023 activity 2023 Consolidation Personnel Center Assets Cost revenue Research development Marketing sales General administrative Total,170


2022 pre-tax $2. billion FoA $612 $515 million RL.


Note 3 Restructuring Part II 8 Annual Report Form 10-K restructuring.


daily 3. 19 billion December 2023 8%. monthly 3. 98 billion increase 6%. daily 2. 11 billion increase 6%. monthly 3. 07 billion increase 3%. impressions increased 28% average price ad decreased.


Quarterly Report Form 10-Q first quarter 2024 report DAUs MAUs ARPU Securities Exchange Commission. reporting year-over-year changes ad impressions average price ad region DAP ARPP. "Limitations Key Metrics Data Annual Report Form 10-K.


revenue from Facebook Instagram. rely on targeting measurement tools deliver relevant ads. revenue affected by reduced marketer spending limitations targeting measurement regulatory environment third-party operating systems browsers.


legislative General Data Protection Regulation European Union ePrivacy Directive European Digital Services Act. privacy laws California Consumer Privacy Act data signals ad products expect


Digital Markets Act impact future. implemented changes products user data practices reduce ability target measure ads. response to regulatory developments plans to change legal basis behavioral advertising on Facebook Instagram EU European Economic Area Switzerland interests to "consent "subscription for no ads" alternative. with regulators new consent model. mobile providers Apple Google implemented limit collect signals target measure advertising. Apple changes ability target measure advertising impacted budgets marketers.


mitigate developments advertising systems performance. developing privacy technologies reducing personal information relying anonymized third-party data. developing tools marketers data products signals. advertising tools campaigns connect consumers Reels ads business messaging products. investments artificial generative AI delivery targeting measurement. driving onsite conversions business messaging ad products features scaling features.


engaging explore new standards processing data advertising. improvements ad targeting measurement improved results. expect long-term initiatives legislative regulatory platform developments impact advertising revenue.


global regional business geopolitical conditions user growth engagement advertising revenue. advertising budgets pressured by inflation rising interest rates market uncertainty reduced marketer spending. improvement conditions 2023 uncertainty remains could impact financial results. competitive products services reduced engagement. investing in Reels AI initiatives AI discovery engine improved user engagement monetization. Reels growing monetizes lower expect. fluctuations declines size active user base regions. war Ukraine access Facebook Instagram restricted Russia user growth engagement 2023. affected advertising revenue 2023.


evaluate sources advertising revenue perfect visibility factors spending decisions assessments involve complex judgments large advertiser base. Trends dynamic interrelated. difficult identify spending decisions trends unable quantify impact advertising revenue.


discipline 2022 efficiency opportunities. 2023 80% costs expenses recognized FoA 20% RL. FoA investments headcount data centers technical infrastructure apps advertising services. investments AI initiatives recommend content advertising tools develop new features AI.


investments metaverse virtual augmented mixed reality devices software neural interfaces technologies. RL investments include technology development. long-term research development. 2023 RL reduced profit $16. 12 billion expect losses increase 2024. complex evolving long-term initiative profits. investing next chapter internet monetization opportunities businesses developers creators advertising hardware digital goods.


Family metrics DAP average revenue person include users products unless qualify DAP MAP.


Trends community affect revenue financial results ads value expenses capital expenditures. daily monthly active people access Family products mobile devices. Active People. registered logged-in user Facebook Instagram Messenger WhatsApp visited one Family mobile. require common link multiple products attribute multiple user accounts. calculations DAP rely complex techniques algorithms machine learning models using products matching accounts counting one person. techniques models require judgment calibrated against survey data margin of error estimates. view DAP measures of engagement across products. additional information "Limitations of Key Metrics Other Data Annual Report Form 10-K.


DAP. 19 billion 2023. 96.


Active People (MAP). person registered user Family products visited mobile last 30 days. require common identifier link accounts multiple products attribute multiple accounts. calculations rely complex techniques algorithms machine learning models estimate using products matching accounts counting one person. techniques models require judgment developed reviews calibrated against survey data margin of error estimates. MAP measure size global active community. information "Limitations of Key Metrics Other Data Annual Report Form 10-K.


31, 2023. 98 billion 6%. 74.


Revenue Per Person (ARPP. total revenue quarter divided by average MAP. includes sources Family products. estimate share revenue users not MAP material. 39. 72. 91. 53. 63. 59. 32. 71. Revenue-Ad


annual ARPP 2023 $34. 72 9% 2022.


Facebook metrics DAUs MAUs average revenue user include Instagram WhatsApp products unless DAUs MAUs.


Trends users affect revenue financial results ads value expenses capital expenditures. daily monthly users access Facebook mobile devices. Active Users. registered logged-in Facebook user visited website mobile device Messenger application day. DAUs measures user engagement.


DAUs increased 6% to 2. 11 billion December 2023 2. billion 2022. India Bangladesh Nigeria top three growth 2023. Active Users. registered Facebook visited website Messenger application last 30 days. size global community.


December 2023. billion MAUs increase 3% 2022. India Bangladesh Nigeria top growth.


calculate revenue user geography ad impressions delivered virtual goods purchased shipped. define ARPU total revenue divided by average MAUs. ARPU includes sources Facebook Messenger. revenue Facebook majority total revenue. See "Average Revenue Per Person (ARPP) monetization Family products. geography affects revenue financial results rates. revenue ARPU United States Canada Europe higher due size maturity online mobile advertising markets. ARPU 2023 United States Canada 11 times higher than Asia-Pacific.


revenue by user geography apportioned location. differs from revenue disaggregated by geography consolidated financial statements Part II Item 8 apportioned addresses.


annual ARPU 2023 $44. 60 increase 13% 2022. increased 21% Europe 20% Rest World 11% Asia-Pacific 10% United States Canada. User growth lower ARPU Asia‐Pacific World. growth future regions ARPU lower ARPU increase slower decrease.


consolidated financial statements prepared GAAP. estimates assumptions assets liabilities revenue costs expenses disclosures. evaluate accounting estimates historical experience assumptions. impact financial performance differ.


accounting estimate critical if material subjectivity judgment impact consolidated financial statements. loss contingencies income taxes valuation assets impact financial statements. critical estimates. see Note 1 Summary Accounting Policies financial statements Part II Item 8 "Financial Statements Supplementary Data Annual Report Form 10-K.


involved in legal proceedings claims regulatory tax government inquiries investigations business. include speculative claims for damages. required comply with legal regulatory obligations subject to new laws regulations. requirements uncertain to interpretation enforcement failure lead to action. evaluate developments accrue liability when probable loss amount estimated.


review developments contingencies provisions recorded possible losses disclosed. make adjustments provisions disclosures reflect defenses impact negotiations settlements regulatory proceedings rulings advice legal counsel updated information. judgment required probability loss estimated asserted unasserted matters. Certain factors changes estimates judgments prior quarters. jurisdictions fines penalties new laws preliminary interpretations damages difficult estimate. government inquiries investigations Data Protection Commission review regulatory bodies before lead changes outcome. expect estimates judgments revised future quarters.


ultimate outcome likelihood loss uncertain. if resolved against management estimates results financial condition. See Note 12 — Commitments Contingencies Note 15 Income Taxes consolidated financial statements Part II Item 8 Statements Data Part I Item 3 "Legal Proceedings Annual Report Form 10-K information contingencies.


subject taxes United States foreign jurisdictions. judgment assets liabilities accounting principles tax laws. forecasted income


change economic political conditions judgment deferred tax assets.


recognize tax benefits from uncertain tax positions if sustained technical merits. tax positions include estimates transfer pricing developed arms-length prices. estimates research development tax credits based documentation. reserved for uncertain tax positions interest no final tax outcome different significant judgment required taxes. make adjustments reserves income tax accounting guidance when facts circumstances change closing tax audit refinement estimate. final tax outcome differences affect provision income taxes financial condition operating results.


valuation impairment judgment cash flows discount rates market data holding period residual value.


Impairment testing for long-lived-assets property equipment operating lease right-of-use assets occurs carrying compared future cash flows disposition. test performed asset group level cash flows independent. results recoverable reduced to fair value.


Impairment testing non-marketable equity securities without fair values performed each reporting date triggering events impairment. assessment considers investee's financial condition business outlook industry sector performance regulatory economic technological environment operational financing cash flows events. indicators impairment estimate fair value securities market income recognize impairment loss in statements if estimated fair value less than carrying value. determining differences rights obligations adjustments observable price for differences. of observable transactions on timely reporting investee companies. fair value adjustment may transaction.


. generate revenue from advertising. displaying products Facebook Instagram Messenger third-party mobile applications. Marketers pay products or based impressions actions.


recognize revenue impression-based ads contracted period impressions delivered. delivered ad displayed. revenue action-based ads user action contracted. number ads business. vary product video Reels not monetized feed Stories increase decrease number frequency monetization strategies. calculate average price per ad total revenue divided ads delivered average price paid ad marketer. arrangements principal recognize revenue net basis.


revenue. WhatsApp Business Platform fees developers Payments infrastructure.


revenue Meta Quest wearables software content.


Cost revenue. expenses delivery distribution products. data centers technical infrastructure depreciation network payroll share compensation energy bandwidth costs. includes partner arrangements traffic acquisition credit card fees RL inventory costs estimated losses content costs.


Research development. expenses payroll share compensation RL technology facilities costs engineering improving restructuring charges.


Marketing sales. promotional payroll share-based compensation employees sales support business development customer service. professional services content reviewers restructuring charges.


administrative. legal-related costs fines settlements losses fees payroll share-based compensation executives legal finance human resources communications administrative employees taxes professional services restructuring charges.


discuss results operations December 31, 2023 2022. 2022 2021 Part II Item 7 Discussion Financial Condition Results Operations Annual Report Form 10-K 2022.


table consolidated income Revenue,609 Costs expenses revenue,249,649 Research development,483,338,655 Marketing sales,301,262,043 General administrative,408 costs expenses,151,665,176 Income operations,944 Interest taxes,428,819,284,330 Net income,098,200,370


table consolidated income percentage revenue Ended December Revenue Costs expenses Cost revenue Research development Marketing sales General administrative Total costs expenses####75 Income operations####25 Interest income Income before taxes####25####40 Net income


rounded presentation differ unrounded.


table revenue source segment Ended December 2022 change 2021 millions percentages Advertising#131,948,642 Other revenue Family Apps,006,450,655 Reality Labs,159,274 Total revenue#134,902,609#117,929


revenue 2023. billion 16% 2022. advertising.


Advertising revenue 2023 increased $18. 31 billion 16% 2022 offset average price ad. ads delivered increased 28%, 18% 2022 grew Asia-Pacific Rest World. increase driven number frequency users. average price ad decreased 16% 2022. driven increase number geographies products lower. average price ad declined year-over-year improvements ad targeting measurement tools performance demand. Overview Full 2023 Results. advertising revenue growth driven online commerce China consumer packaged goods entertainment media. future revenue driven price number ads delivered.


2023 $250 million 31%, 2022. WhatsApp.


revenue 2023 $263 million 12% 2022. Meta Quest.


Revenue strong fourth quarter holiday demand. seasonality hardware affects results growth third fourth quarters decline first quarters. revenue increased 17% 16% 16% third fourth quarters 2023 2022 2021 first quarters declined 11% 17% 7%.


foreign exchange rates revenue 2023 2022. translated revenue 2023 prior exchange rates. total revenue advertising revenue $134. 53 billion $131. 57 billion. constant rates $374 million $379 million lower 2023. rates 2023 $17. 92 billion $17. 93 billion higher 2022.


Ended December 31, 2022 % 2021 millions percentages Cost revenue,249,649 Percentage revenue


revenue 2023 increased $710 million 3% 2022. operational expenses data centers offset abandonment.


Note 3 Restructuring Part II 8 Annual Report Form 10-K restructuring.


Ended December 31, 2022 % 2021 millions percentages Research development,483,338,655 Percentage revenue


expenses 2023 increased $3. billion 2022. payroll share compensation.


Ended December 31, 2022 change 2021 millions percentages Marketing sales,301,262,043 Percentage revenue


Marketing sales expenses 2023 decreased $2. 96 billion 19% 2022. marketing promotional payroll. employee headcount 2022 2023.


Ended December 31, 2022 % change 2021 millions percentages General administrative,408 Percentage revenue


expenses 2023 decreased $408 million 3% compared 2022. lower payroll expenses employee headcount 2022.


table income operations segment Ended December 2022 2021 millions percentages Family Apps#62,871,661 Reality Labs(16,120),717),193) Total income operations#46,751,944


income 2023. billion 47% 2022. advertising marketing sales expenses.


loss 2023 $2. billion 18% 2022. payroll expenses revenue.


Ended December 2022 % change 2021 % change millions Interest income Interest expense Foreign currency exchange losses net#42 Other income net(150) Interest other income net#677#531


Interest income 2023 increased $802 million compared 2022. higher rates balances. Changes related gains equity investments.


Ended December 31, 2022 2021 millions percentages Provision income taxes,330 Effective tax rate


taxes 2023 increased $2. billion 48% 2022.


effective tax rate 2023 decreased due excess tax benefits share compensation guidance relief foreign tax credits. offset. tax benefits foreign income clarification IRS research development expenses capitalization.


Tax Rate. items income before. benefits foreign intangible income share-based compensation research tax credit capital losses restructurings tax contingency business tax law.


share-based compensation tax rate deductions stock price. stock price constant January 2024. tax tax rate 2024 mid-teens. mandatory capitalization amortization research development expenses 2023 2017 Tax Cuts Jobs Act. mandatory capitalization 2023 cash tax liabilities tax rate foreign-derived income deduction. deferred tax rate 2024 higher cash tax liabilities lower.


Unrecognized Tax Benefits. December 31, 2023 uncertain tax positions $6. 95 billion accrued liabilities. accrued transfer pricing foreign subsidiaries licensing intellectual property services research tax credits. settlement resolution tax audits assessment. tax audits material change 12 months.


Note 15 Income Taxes Part II Item 8 Annual Report 10-K tax.


liquidity cash equivalents securities operations. deposits funds. government securities debt. institutions securities. securities $65. 40 billion December 31, 2023 $24. 67 billion 2022. $71. 11 billion $8. 46 billion proceeds fixed-rate unsecured notes. offset $28. 10 billion capital expenditures $19. 77 billion repurchases Class A common stock $7. 01 billion taxes.


table cash flows Ended December cash operating activities,113,475,683 investing#(24,495)(7,570) financing,500)(22,136)(50,728)


2023 $39. 10 billion income non $14. 03 billion share compensation $11. 18 billion depreciation amortization $3. 29 billion working capital. increase cash collection payments.


Cash 2023 $27. 05 billion purchases property offset $3. 20 billion proceeds maturities sales debt securities. decrease cash purchases property.


expenditures $30 2024.


2023 $19. 77 billion repurchases Class A common stock $7. 01 billion taxes RSUs offset $8. 46 billion Notes May 2023. decrease cash Class A common stock taxes RSU debt offerings.


. GAAP monitor free cash flow non-GAAP business performance allocate resources. FCF net cash activities reduced purchases property payments leases.


believe FCF key financial business performance provides information cash property equipment investments business.


chosen definition FCF information understand trends. use FCF senior management board directors.


FCF limitations substitute for GAAP financial measures cash. not represent residual cash flow discretionary expenses. limitations reflect future contractual commitments companies present measures differently usefulness.


Management compensates limitations FCF disclosure financial statements reconciliation FCF GAAP measure net cash activities.


reconciliation FCF GAAP measure net cash activities December cash,113,475,683 Purchases property equipment,045),186),567 Principal payments leases Free cash flow,010,439


anticipate funds cash needs share repurchases dividend payments next 12 months. evaluate liquidity capital resources access external capital future capital requirements.


operating lease obligations offices centers colocations. finance. facilities obligations.


commitments servers network infrastructure Reality Labs.


December 2023-term debt unsecured notes $18. 50 billion. 2027 2063. $848 million $16. 40 billion. proceeds purposes capital expenditures share repurchases dividend acquisitions investments.


board repurchase 2017. 2023 repurchased retired 92 million shares $20. 03 billion 1% excise tax Inflation Reduction Act 2022. December 2023 $30. 93 billion. 2024 $50 billion.


February 1 2024 cash dividend program. $0. 50 $2. dividend paid March 26, 2024 holders February 22, 2024.


funds future declaration board intend quarterly dividend Class A B. payment future dividends discretion board financial condition operating results cash cash needs.


income taxes $6. 61 billion December 31, 2023. taxes payable $1. 14 billion-time transition tax $575 million due year. transition tax interest installments 2025. liabilities $6. 95 billion uncertain tax positions. uncertainties tax audits resolution payments.


involved in legal proceedings claims regulatory tax inquiries. record liability probable amount estimated. possibility loss disclose loss in notes consolidated financial statements. judgment required determine probability estimated loss. unpredictable uncertainties beyond control. estimates assumptions change impact results operations financial position cash flows.


8 Leases 10 Debt 12 Commitments Contingencies 13 Equity 15 Taxes II 8 Proceedings 3 10-K leases debt taxes contingencies.


pronouncements Note 1 Accounting Policies statements Part II Item 8 Annual Report Form 10-K.


exposed market risks equity price.


foreign currency risks revenue expenses. Euro. exchange rates strengthening. dollar affect revenue operating results. Management Analysis Financial Condition Foreign Exchange Impact Revenue Part II Item 7 Annual Report Form 10-K.


experienced fluctuations net income transaction gains losses remeasuring asset liability balances. entered may derivatives instruments hedge currency exchange risk. difficult predict hedging. net losses $366 million $81 million $140 million 2023 2022 2021.


exposure interest rates income value cash securities long-term debt.


cash equivalents debt securities time deposits funds. government. corporate. investment policy preservation capital liquidity requirements. interest rates affect interest market value. 100 point increase $355 million $558 million market value debt securities equivalents December 31, 2023 2022. gains losses sold investments prior maturity.


December 31, 2023 2022 fixed-rate senior notes $18. 50 billion $10. 00 billion. Notes bear fixed rates amortized cost fluctuations financial statements. fair value market rates.


equity investments non-marketable securities price risks value.


non-marketable equity securities companies without fair values. using cost less impairment adjusted for changes value transactions. qualitative assessment triggering events impairment. considers financial condition industry sector performance economic environment. Valuations complex market data transactions. Uncertainties global economic climate financial markets impact valuation. total securities Jio Platforms Limited carrying value $6. 14 billion $6. 20 billion as of December 31, 2023 2022.


1 Accounting Policies 5 Financial Instruments 6 Non-marketable Equity Securities 10 Long-term Debt Part II 8 7 Accounting Estimates Annual Report Form 10-K.


Reports Accounting Firm. 42 Financial Statements Balance Sheets Income Comprehensive Stockholders Equity Cash Flows


Stockholders Meta Platforms.


audited consolidated balance sheets Meta Platforms, Inc. Company December 31, 2023 2022 statements income stockholders' equity cash flows three years notes financial. statements present financial position December 31, 2023 2022 results operations cash flows. accounting principles.


audited Public Company Accounting Oversight Board control financial reporting December 31, 2023 Internal Control Framework report February 1 2024 unqualified opinion.


financial statements responsibility Company management. opinion audits. public accounting firm registered PCAOB independent. federal securities laws Securities Exchange Commission PCAOB.


conducted audits standards PCAOB. standards require plan audit assurance financial statements free misstatement. audits included risks misstatement. procedures included examining evidence amounts disclosures statements. accounting principles estimates management overall presentation. audits provide reasonable basis for opinion.


critical audit matters from current period audit financial statements communicated to Audit & Risk Oversight Committee relate to accounts disclosures challenging complex judgments. alter opinion on consolidated financial statements not providing separate opinions.


Description Matter Note 12 consolidated financial statements Company party to legal proceedings claims regulatory inquiries investigations. Company accrues liability loss probable amount estimated. possible loss cases actions inquiries. discloses estimate loss. discloses losses. Auditing accounting disclosure loss contingencies challenging judgment management assessments likelihood loss estimate potential losses.


Addressed Matter Audit obtained understanding evaluated design tested effectiveness controls identification including Company assessment likelihood loss potential losses. audit procedures included reading meetings board proceedings claims regulatory inquiries investigations requesting confirmation letters meeting obtaining representations management. evaluated disclosures Note 12 consolidated financial statements.


Note 15 financial statements Company received notices Internal Revenue Service transfer pricing agreements foreign subsidiaries periods. IRS position tax years. additional federal tax liability interest penalties. Company uses judgment tax position merits measure tax benefit. Auditing accounting uncertain tax positions challenging judgment merits tax tax laws legal rulings.


Addressed Matter Audit obtained understanding evaluated design tested controls Company process assess merits tax positions transfer pricing agreements benefit. audit involved tax professionals. included correspondence tax authorities evaluating opinions requesting confirmation letters. used knowledge international local income tax laws accounting. analyzed assumptions data federal tax liability tested mathematical accuracy calculations. evaluated appropriateness disclosures Note 15 consolidated financial statements.


served auditor.


audited Meta Platforms. control financial reporting December 31, 2023 Internal Control – Integrated Framework Treadway COSO criteria. Meta Platforms. maintained control reporting.


audited Public Company Accounting balance sheets December 2023 2022 income stockholders equity cash flows three years 2023 notes report February 1 2024 unqualified opinion.


Company management responsible internal control financial reporting assessment's Report. opinion control based audit. public accounting firm registered PCAOB independent U. S. federal securities laws rules Securities and Exchange Commission PCAOB.


conducted audit PCAOB. standards require plan assurance internal control financial reporting.


audit included understanding internal control financial reporting risk material weakness testing effectiveness procedures necessary. audit provides basis opinion.


company internal control over financial reporting assurance reliability financial reporting preparation financial statements for accounting principles. includes policies procedures maintenance of records transactions dispositions assets assurance transactions recorded preparation financial statements receipts expenditures with authorizations management directors prevention of unauthorized acquisition use disposition assets financial statements.


limitations internal control financial reporting prevent misstatements. projections effectiveness future risk controls compliance policies deteriorate.


31, Cash Marketable securities Accounts receivable,466 Prepaid expenses assets,345,549 Non equity securities Property equipment lease,673 Intangible assets Goodwill,306 Other assets Liabilities stockholders equity Accounts payable Partners payable lease Accrued expenses,552,026,301 Long-term debt Other liabilities Commitments contingencies Stockholders equity Common stock.million A shares 2,211 2,247 million issued December 2023 2022 4,141 million B 350 million 2023 2022 capital,444 loss,155 earnings,799 stockholders equity liabilities equity


Notes Statements.


Ended December Revenue,609 Costs expenses revenue,249,649 Research development,483,338,655 Marketing sales,301,262,043 General administrative,408 costs expenses,151,665,176 operations,944 Interest before taxes,428,819,284 taxes,330 Net income,098,200,370 Earnings share Class A B stockholders Basic. 19. Weighted-average shares earnings Basic,687,702


Ended December Net income,098,200 income foreign currency translation net tax unrealized gain investments net tax(1,653) income,473,363,750


A B Stock Balances December 31, 2020 Shares withheld share settlement compensation repurchases loss income December 31, 2021 stock Shares withheld share settlement compensation Share repurchases income December 2022 stock Shares withheld share settlement compensation repurchases Balances December 31, 2023


Ended December Cash Net income,098,370 Adjustments Depreciation amortization,178,686 Share compensation,992,164 Deferred income taxes facilities consolidation,432 Data center assets abandonment,341 Changes assets liabilities Accounts receivable Prepaid expenses assets,750 Accounts payable payable Accrued expenses liabilities,352,210 Net cash,113,475,683 Cash flows investing Purchases property equipment,266) debt securities Sales maturities Acquisitions businesses assets investing activities Net cash(7,570) Cash financing Taxes equity awards(7,012)(3,595)(5,515) Repurchases Class A common stock,774) long debt,455 Principal payments leases(1,058)(850)(677) financing activities cash,500)(22,136),728) exchange rate changes cash cash cash,231(1,269)(1,089) Cash,865,954 end Reconciliation cash consolidated balance equivalents,601 Restricted cash prepaid expenses assets Restricted cash Total cash equivalents restricted cash


Ended December cash flow Cash taxes#8,525 interest#448 Non-cash investing financing activities Property equipment accrued expenses liabilities,105,319#3,404 Acquisition businesses expenses#119#291#73 assets financing expenses#508 Repurchases Class A common stock expenses liabilities#474#310#340


incorporated Delaware July 2004. mission power community world closer. products apps metaverse.


report financial results segments Family of Apps Reality Labs. information aligns chief business. generate revenue advertising.


prepared consolidated financial statements. accounting principles. include Meta Platforms. subsidiaries variable entities beneficiary. intercompany balances transactions eliminated.


consolidated financial statements GAAP requires estimates judgments. estimates assets liabilities. base on historical information assumptions. GAAP requires estimates loss contingencies income taxes long-lived assets non equity securities revenue recognition goodwill credit losses debt securities fair value financial instruments leases. estimates based on knowledge current events regulations expectations future. results differ estimates.


recognize revenue Accounting Standards) 606 Contracts Customers. control promised goods services transferred customers consideration.


Sales commissions expensed amortization year. costs recorded marketing sales statements. disclose unsatisfied obligations one year.


includes sales taxes pass‐through agent.


Advertising revenue displaying products Facebook Instagram Messenger-party mobile applications. Marketers pay products resellers impressions actions.


recognize revenue impression-based ads contracted impressions delivered. delivered. revenue action-based ads user action contracted. report advertising


revenue gross control advertising inventory before customers. evidenced monetize before.