"Fully Seize The Opportunity"

An update on Meta

From “Meta Platforms: Phase Change” (February 2023): “What the 2022 (annual) results fail to capture is the change in trend in Q4 FY22; specifically, if we exclude the $3.8 billion in restructuring charges, the FOA (Family Of Apps) segment generated Q4 FY22 EBIT of $14.4 billion, with margins of 46% - down ~200 basis points from Q4 FY21 (for context, YoY FOA EBIT margins declined by 1,000 basis points or more in Q1, Q2, and Q3). This is a clear indication that the actions currently being taken will meaningfully impact profitability; given that FOA generated >$45 billion of FY22 EBIT (adjusted for the Q4 restructuring charges), or ~3x higher than the run rate FRL losses, you can appreciate why this is a very big deal for Meta.”

As I did with Microsoft on Monday, I think a helpful place to begin today’s discussion is with an examination of Meta’s financial results over the past five years, specifically for the company’s Family Of Apps (FOA) segment.