Meta Platforms META · USD

Segment and Geographical InformationWe report our financial results for our two reportable segments: Family of Apps (FoA) and Reality Labs (RL). FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services. RL includes our virtual and augmented reality related consumer hardware, software, and content. Our operating segments are the same as our reportable segments.Our chief executive officer is our chief operating decision maker (CODM). Our CODM uses consolidated and operating segment's revenue and income (loss) from operations to allocate resources during our annual planning process and to assess performance. Our CODM does not evaluate operating segments using asset or liability information.Revenue and costs and expenses are generally directly attributed to our segments. These directly attributable costs and expenses include certain product development related operating expenses, costs associated with partnership arrangements, consumer hardware product costs, content costs, and legal-related costs. Indirect costs are allocated to segments based on a reasonable allocation methodology, when such costs are significant to the performance measures of the operating segments. Indirect operating expenses, such as facilities, information technology, certain shared research and development activities, recruiting, and physical security expenses are mostly allocated based on headcount. Costs related to the operation of our data centers and technical infrastructure are generally allocated to our segments based on estimated usage, most of which is allocated to the FoA segment.

RevenueRevenue disaggregated by revenue source and by segment consists of the following (in millions):Year Ended December 31, 202520242023Advertising$196,175 $160,633 $131,948 Other revenue2,584 1,722 1,058 Family of Apps198,759 162,355 133,006 Reality Labs2,207 2,146 1,896 Total revenue$200,966 $164,501 $134,902 Revenue disaggregated by geography, based on the addresses of our customers, consists of the following (in millions): Year Ended December 31, 202520242023United States and Canada (1)$78,866 $63,207 $52,888 Europe (2)46,569 38,361 31,210 Asia-Pacific53,817 45,009 36,154 Rest of World (2)21,714 17,924 14,650 Total revenue$200,966 $164,501 $134,902 _________________________(1)United States revenue was $74.78 billion, $59.73 billion, and $49.78 billion for the years ended December 31, 2025, 2024, and 2023, respectively. (2)Europe includes Russia and Turkey, and Rest of World includes Africa, Latin America, and the Middle East.Deferred revenue was $1.08 billion and $772 million as of December 31, 2025 and 2024, respectively. Our deferred revenue primarily relates to advertising prepayments and credits, as well as software updates and upgrades associated with RL hardware sales, most of which are expected to be realized in less than a year.

Commitments and ContingenciesContractual CommitmentsWe have $131.05 billion of non-cancelable contractual commitments as of December 31, 2025. These commitments are mostly related to third-party cloud capacity arrangements and our continued investments in servers and network infrastructure, data centers, and consumer hardware products in Reality Labs. The following is a schedule, by years, of non-cancelable contractual commitments as of December 31, 2025 (in millions):2026$30,634 202722,166 202821,221 202919,761 203019,407 Thereafter17,857 Total$131,046 Additionally, as part of the normal course of business, we have entered into multi-year agreements ranging from three to 25 years to purchase clean and renewable energy that do not specify a fixed or minimum volume commitment. The ultimate spend under these agreements may vary and will be based on actual volume purchased.Legal and Related MattersWith respect to the cases, actions, and inquiries described below, we evaluate the associated developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated. In addition, we believe there is a reasonable possibility that we may incur a loss in some of these matters. Unless otherwise noted, with respect to the matters described below that do not include an estimate of the amount of loss or range of possible loss, such losses or range of possible losses either cannot be estimated or are not individually material, but we believe there is a reasonable possibility that they may be material in the aggregate.We are also party to various other legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. Additionally, we are required to comply with various legal and regulatory obligations around the world. The requirements for complying with these obligations may be uncertain and subject to interpretation and enforcement by regulatory and other authorities, and any failure or perceived failure to comply with such obligations could eventually lead to asserted legal or regulatory action. With respect to these other legal proceedings, claims, regulatory, tax, or government inquiries and investigations, and other matters, asserted and unasserted, we evaluate the associated developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated.

Long-term DebtIn November 2025, we issued an aggregate of $30.0 billion of fixed-rate senior unsecured notes in six series. The following table summarizes our fixed-senior unsecured notes (the Notes) and the carrying amount of our long-term debt (in millions, except percentages):MaturityStated Interest RateEffective Interest RateDecember 31, 2025December 31, 2024August 2022 Notes2027 - 20623.50% - 4.65%3.63% - 4.71%$10,000 $10,000 May 2023 Notes2028 - 20634.60% - 5.75%4.68% - 5.79%8,500 8,500 August 2024 Notes2029 - 20644.30% - 5.55%4.42% - 5.60%10,500 10,500 November 2025 Notes2030 - 20654.20% - 5.75%4.27% - 5.77%30,000 — Total face amount of long-term debt59,000 29,000 Unamortized discount and issuance costs, net(256)(174)Long-term debt$58,744 $28,826 Each series of the Notes rank equally with each other and interest is payable semi-annually in arrears. We may redeem the Notes at any time, in whole or in part, at specified redemption prices. We are not subject to any financial covenants under the Notes. Interest expense, net of capitalized interest, recognized on the Notes was $1.09 billion, $683 million, and $420 million for the years ended December 31, 2025, 2024, and 2023, respectively. The total estimated fair value of our outstanding Notes was $57.22 billion and $27.83 billion as of December 31, 2025 and 2024, respectively. The fair value is determined based on the quoted prices at the end of the reporting periods and categorized as Level 2 in the fair value hierarchy.

Income TaxesThe components of income before provision for income taxes are as follows (in millions): Year Ended December 31, 202520242023Domestic$79,644 $66,342 $43,499 Foreign6,288 4,321 3,929 Income before provision for income taxes$85,932 $70,663 $47,428 The provision for income taxes consists of the following (in millions): Year Ended December 31, 202520242023Current: Federal$2,820 $9,569 $4,934 State745 775 577 Foreign3,154 2,696 2,688 Total current tax expense6,719 13,040 8,199 Deferred: Federal18,379 (4,709)67 State395 (43)123 Foreign(19)15 (59)Total deferred tax (benefits) expense18,755 (4,737)131 Provision for income taxes$25,474 $8,303 $8,330 As a result of the implementation of the One Big Beautiful Bill Act (OBBBA) enacted in July 2025, we expect to incur Corporate Alternative Minimum Tax (CAMT) beginning in 2025. We recorded a $15.93 billion charge in the third quarter of 2025, of which $14.03 billion was a valuation allowance against our U.S. federal deferred tax assets as of the enactment date of OBBBA, and the remaining was mostly related to the reduction of the benefit of the foreign-derived intangible income deduction. In determining the valuation allowance, our accounting policy incorporates the expected impact of future years’ CAMT in assessing the realizability of our deferred tax assets.Beginning in 2025 annual reporting, we adopted ASU 2023-09 prospectively. See Note 1 — Summary of Significant Accounting Policies – Recently Adopted Accounting Pronouncements for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows (in millions, except percentages):Year Ended December 31, 2025U.S. federal statutory income tax rate$18,046 21.0 %State and local income taxes, net of federal income tax effect (1)(202)(0.2)Foreign tax effects1,464 1.7 Tax creditsResearch and development tax credits(3,912)(4.6)U.S. foreign tax credits(1,405)(1.6)Valuation allowances (2)11,974 13.9 Changes in unrecognized tax benefits (3)3,127 3.6 Other adjustmentsExcess tax benefits from share-based compensation(4,307)(5.0)Other (4)689 0.8 Effective tax rate$25,474 29.6 %_________________________(1)California represents the majority of the tax effect in this category.(2)Primarily related to the implementation of OBBBA.

LeasesWe have entered into various non-cancelable operating and finance lease agreements mostly for our data centers, offices, and certain network infrastructure. Our leases have original lease periods expiring between 2026 and 2093. Many leases include one or more options to renew.The components of lease costs are as follows (in millions):Year Ended December 31, 202520242023Finance lease cost:Amortization of right-of-use assets$549 $387 $349 Interest31 23 20 Operating lease cost2,798 2,359 2,091 Variable lease cost and other1,147 844 580 Total$4,525 $3,613 $3,040 Impairment losses for operating lease right-of-use assets were not material for the year ended December 31, 2025. For the years ended December 31, 2024 and 2023, $385 million and $1.76 billion were recorded as impairment losses for operating lease right-of-use assets, respectively.Supplemental balance sheet information related to lease liabilities is as follows:December 31, 20252024Weighted-average remaining lease term:Finance leases15.1 years13.7 yearsOperating leases 12.3 years11.5 yearsWeighted-average discount rate:Finance leases4.1 %3.6 %Operating leases4.3 %3.9 %The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2025 (in millions):Operating LeasesFinance Leases2026$3,211 $344 20273,237 97 20283,057 97 20292,985 88 20302,621 86 Thereafter18,397 792 Total undiscounted cash flows33,508 1,504 Less: Imputed interest(8,355)(320)Present value of lease liabilities$25,153 $1,184 Lease liabilities, current$2,213 $308 Lease liabilities, non-current22,940 876 Present value of lease liabilities$25,153 $1,184 The table above does not include lease payments that were not fixed at commencement or lease modification. As of December 31, 2025, we have additional operating and finance leases, that have not yet commenced, with total lease obligations of approximately $103.77 billion, mostly for data centers, colocations, and network infrastructure. These operating and finance leases will commence between 2026 and 2030 with lease terms of greater than one year to 30 years.

Acquisitions, Goodwill, and Intangible AssetsDuring the year ended December 31, 2025, we completed several business acquisitions with total purchase consideration of $4.09 billion in cash and $450 million in shares of our Class A common stock, including $3.88 billion and $664 million allocated to goodwill and intangible assets, respectively. Goodwill generated from these business acquisitions was primarily attributable to advancing our AI efforts, workforce, expected synergies, and potential monetization opportunities. The amount of goodwill generated that was deductible for tax purposes was not material. Acquisition-related costs were not material and were expensed as incurred. Pro forma historical results of operations related to these business acquisitions have not been presented because they are not significant to our consolidated financial statements, either individually or in aggregate. We have included the financial results of these acquired businesses in our consolidated financial statements from their respective dates of acquisition.Changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2025 and 2024 are as follows (in millions):Family of AppsReality LabsTotalDecember 31, 2023$19,246 $1,408 $20,654 Acquisitions— — — December 31, 202419,246 1,408 20,654 Acquisitions3,697 99 3,796 Adjustments85 (1)84 December 31, 2025$23,028 $1,506 $24,534 The following table sets forth the major categories of the intangible assets and their weighted-average remaining useful lives (in millions):December 31, 2025December 31, 2024Weighted-Average Remaining Useful Lives (in years)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying AmountAcquired software2.6$2,601 $(400)$2,201 $250 $(58)$192 Acquired technology3.01,151 (235)916 442 (247)195 Acquired patents6.4224 (143)81 252 (165)87 Other3.4113 (16)97 24 (8)16 Total finite-lived assets4,089 (794)3,295 968 (478)490 Total indefinite-lived assetsN/A397 — 397 425 — 425 Total$4,486 $(794)$3,692 $1,393 $(478)$915 During the year ended December 31, 2025, we also purchased software licenses of $2.40 billion which are classified as acquired software within the intangible assets. Amortization expense of intangible assets for the years ended December 31, 2025, 2024, and 2023 was $615 million, $211 million, and $161 million, respectively.

At Meta, cybersecurity risk management is an important part of our overall risk management efforts. Our industry is prone to cybersecurity threats and attacks, and we regularly experience cybersecurity incidents of varying degrees. We believe we are a particularly attractive target as a result of our prominence and scale, the types and volume of personal data and content on our systems, and the evolving nature of our products and services. Our products and services reach billions of users and involve the collection, storage, processing, and transmission of a large amount of data. In addition, our business and operations span numerous geographies around the world, involve thousands of employees, contractors, vendors, developers, partners, and other third parties, and rely on software and hardware that is highly technical and complex. Our cybersecurity environment continues to evolve, including as we develop and deploy AI models, tools, and other applications and increase our use of public cloud and other third-party services. We maintain an information security program that is comprised of policies and controls designed to mitigate cybersecurity risk. However, at any given time, we face known and unknown cybersecurity risks and threats that are not fully mitigated, and we discover vulnerabilities in our program. We continuously work to enhance our information security program and risk management efforts. We use a risk management framework based on applicable laws and regulations, and informed by industry standards and industry-recognized practices, for managing cybersecurity risks within our products and services, infrastructure, and corporate resources. To identify and assess risks from cybersecurity threats, we evaluate a variety of developments including threat intelligence, first- and third-party vulnerabilities, evolving regulatory requirements, and observed cybersecurity incidents, among others. We regularly conduct risk assessments to evaluate the maturity and effectiveness of our systems and processes in addressing cybersecurity threats and to identify areas for remediation and opportunities for enhancements. We also engage third-party security experts and consultants to assist with assessment and enhancement of our cybersecurity risk management processes, as well as benchmarking against industry practices.