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What changed in Meta Platforms's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Meta Platforms's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+481 added−490 removedSource: 10-K (2026-01-29) vs 10-K (2025-01-30)

Top changes in Meta Platforms's 2025 10-K

481 paragraphs added · 490 removed · 371 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

47 edited+13 added−61 removed22 unchanged
Biggest changeWe remain committed to having a skilled, inclusive and diverse workforce with a broad range of knowledge, skills, political views, backgrounds, and perspectives because we believe cognitive diversity fuels innovation. To aid in this effort, we have taken steps to reduce bias in our people processes and tooling, including our hiring processes and performance management systems.
Biggest changeWe want our products to work for people around the world and we need to grow and keep the best talent in order to do that. We remain committed to having an inclusive workplace and people with a broad range of knowledge, skills, political views, backgrounds, and perspectives because we believe cognitive diversity fuels innovation.
Across all of these efforts, we are making significant investments in AI initiatives, including generative AI, to, among other things, recommend relevant content across our products through our AI-powered discovery engine, enhance our advertising tools and improve our ad delivery, targeting, and measurement capabilities, and to develop new products as well as new features for existing products.
Across all of these efforts, we are making significant investments in AI initiatives, including generative AI and superintelligence, to, among other things, recommend relevant content across our products through our AI-powered discovery engine, enhance our advertising tools and improve our ad delivery, targeting, and measurement capabilities, and to develop new products as well as new features for existing products.
These laws and regulations involve matters including privacy, data use, data combination, data protection and personal information, the provision of our services to younger users, biometrics, encryption, rights of publicity, content, integrity, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, AI and machine learning, electronic contracts and other communications, competition, protection of minors, consumer protection, civil rights, accessibility, telecommunications, product liability, e-commerce, taxation, economic or other trade controls including sanctions, anti-corruption and political law compliance, securities law compliance, and online payment services.
These laws and regulations involve matters including privacy, data use, data combination, data protection and personal information, the provision of our services to younger users, biometrics, encryption, rights of publicity, content, integrity, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, AI and machine learning, electronic contracts and other communications, competition, protection of minors, consumer protection, civil rights, accessibility, telecommunications, product liability, medical devices, e-commerce, taxation, economic or other trade controls including sanctions, export controls, anti-corruption and political law compliance, securities law compliance, and online payment services.
We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the SEC are available free of charge on our website at investor.atmeta.com when such reports are available on the SEC's website.
Securities and Exchange Commission (SEC). We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the SEC are available free of charge on our website at investor.atmeta.com when such reports are available on the SEC's website.
Although it is inherently difficult to predict when and how the next computing platform will develop, we expect our RL segment to continue to operate at a loss for the foreseeable future, and our ability to support our efforts to build the next computing platform is dependent on generating sufficient profits from other areas of our business.
Although it is inherently difficult to predict when and how the next computing platform will develop, we expect our RL segment to continue to operate at a loss for the foreseeable future, 7 Table of Contents and our ability to support our efforts to build the next computing platform is dependent on generating sufficient profits from other areas of our business.
We offer a wide range of benefits across areas such as health, family, finance, community, 12 Table of Contents and time away, including family building benefits, family care resources, retirement savings plans, access to legal services, Meta Resource Groups to build community at Meta, and health and well-being benefits.
We offer a wide range of benefits across areas such as health, family, finance, community, and time away, including family building benefits, family care resources, retirement savings plans, access to legal services, Meta Resource Groups to build community at Meta, and health and well-being benefits.
As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate, and may be interpreted and applied inconsistently from jurisdiction to jurisdiction and inconsistently with our current policies and practices.
The application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate, and may be interpreted and applied inconsistently from jurisdiction to jurisdiction and inconsistently with our current policies and practices.
We offer similar support for outgoing employees outside of the United States while taking into account local employment laws. Employee Learning and Development We value our investment in growing and keeping a highly skilled workforce.
We offer similar support for outgoing employees outside of the United States while taking into account local employment laws. 9 Table of Contents Employee Learning and Development We value our investment in growing and keeping a highly skilled workforce.
Meta is moving our offerings beyond 2D screens toward immersive experiences like augmented, mixed, and virtual reality to help build the next computing platform. Our vision does not center on any single product, but rather an entire ecosystem of experiences, devices, and new technologies.
Meta is moving our offerings beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next computing platform. Our vision does not center on any single product, but rather an entire ecosystem of experiences, devices, and new technologies powered by AI.
People can connect directly with their favorite creators and others who love the same things or build a loyal following of their own to share their ideas, opinions, and creativity with the world. • WhatsApp.
People can connect directly with their favorite creators and others who love the same things or build a loyal following of their own to share their ideas, opinions, and creativity with the world. 6 Table of Contents • WhatsApp.
While the metaverse is in the very early stages of its development, we believe it will become the next computing platform and the future of social interaction. Across our work, we are innovating in artificial intelligence (AI) technologies to build new experiences that help make our platform more social, useful, and immersive.
While the metaverse is in the very early stages of its development, we believe it will become the next computing platform and the future of social interaction. Across our work, we are innovating to build new experiences that help make our platform more social, useful, and immersive.
Marketers purchase ads that can appear in multiple places including on Facebook, Instagram, Messenger, and third-party applications and websites. RL generates revenue from sales of consumer hardware products, software, and content. We invest in our business based on our company priorities.
Marketers purchase ads that can appear in multiple places including on Facebook, Instagram, Messenger, Threads, and WhatsApp, as well as third-party applications and websites. RL generates revenue from sales of consumer hardware products, software, and content. We invest in our business based on our company priorities.
We use our investor.atmeta.com and about.fb.com/news/ websites as well as Mark Zuckerberg's Facebook Page (www.facebook.com/zuck), Instagram account (www.instagram.com/zuck), and Threads profile (www.threads.net/zuck) as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
We use our investor.atmeta.com and meta.com/news websites as well as Mark Zuckerberg's Facebook profile (www.facebook.com/zuck), Instagram account (www.instagram.com/zuck), and Threads profile (www.threads.net/zuck) as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Further, our references to the URLs for these websites are intended to be inactive textual references only. 13 Table of Contents
Further, our references to the URLs for these websites are intended to be inactive textual references only. 11 Table of Contents
Our metaverse efforts include our VR, MR, and social platform initiatives. Our current product offerings in VR include our Meta Quest devices, as well as software and content available through the Meta Horizon Store, which enable a range of social experiences that allow people to defy physical distance while engaging in gaming, fitness, entertainment, and more.
Our current product offerings in VR include our Meta Quest devices, as well as software and content available through the Meta Horizon Store, which enable a range of social experiences that allow people to defy physical distance while engaging in gaming, fitness, entertainment, and more.
These efforts are focused on driving consumer and enterprise sales and adoption of our Meta Quest portfolio of products and Ray-Ban Meta AI glasses. Marketing Historically, our communities have generally grown organically with people inviting their friends to connect with them, supported by internal efforts to stimulate awareness and interest.
These efforts are focused on driving consumer and enterprise sales and adoption of our Meta Quest portfolio of products and AI glasses. 8 Table of Contents Marketing Historically, our communities have generally grown organically with people inviting their friends to connect with them, supported by internal efforts to stimulate awareness and interest.
Corporate Information We were incorporated in Delaware in July 2004. We completed our initial public offering in May 2012 and our Class A common stock is currently listed on the Nasdaq Global Select Market under the symbol "META." Our principal executive offices are located at 1 Meta Way, Menlo Park, California 94025, and our telephone number is (650) 543-4800.
We completed our initial public offering in May 2012 and our Class A common stock is currently listed on the Nasdaq Global Select Market under the symbol "META." Our principal executive offices are located at 1 Meta Way, Menlo Park, California 94025, and our telephone number is (650) 543-4800.
To drive greater adoption and acceptance of VR we have introduced MR capabilities, which allow users to experience the immersion and presence of VR while still being grounded in the physical world, through our Meta Quest devices. Our wearables efforts include our AR initiatives.
To drive greater adoption and acceptance of VR we have introduced passthrough capabilities, which allow users to experience the immersion and presence of VR while still being grounded in the physical world, through our Meta Quest devices. Our wearables efforts include our AI glasses and long-term AR initiatives.
In 2025, we intend to focus on several key investment areas: generative AI, our discovery engine, the metaverse and wearables, Threads, monetization of our products and services, platform integrity and community support, and infrastructure capacity. The majority of our investments are directed toward developing our family of apps.
In 2026, we intend to focus on several key investment areas: AI, Reels and our discovery engine, wearables, monetization of our products and services, youth, platform integrity and community support, and infrastructure capacity. The majority of our investments are directed toward developing our family of apps.
We are also making significant investments in our metaverse and wearables efforts. This includes developing virtual, mixed, and augmented reality devices, software for social platforms, neural interfaces, and other foundational technologies. Our total RL investments were $19.88 billion in 2024 and include expenses relating to headcount and technology development across these efforts.
We are also making significant investments in our RL efforts, including developing virtual and augmented reality devices, software for social platforms, neural interfaces, and other foundational technologies. Our total RL investments were $21.40 billion in 2025 and include expenses relating to headcount and technology development across these efforts.
Reality Labs Products Many of our Reality Labs investments are directed toward long-term, cutting edge research and development for products that are not on the market today and may only be fully realized in the next decade.
Reality Labs Products Many of our Reality Labs investments are directed toward long-term, cutting edge research and development for products that are not on the market today and may only be fully realized in the next decade. This includes exploring innovations in AI and hardware to help build next-generation interfaces.
In 2024, 79% of our total costs and expenses were recognized in FoA and 21% were recognized in RL. Our FoA investments were $75.25 billion in 2024 and include expenses relating to headcount, data centers and technical infrastructure as part of our efforts to develop our apps and our advertising services.
In 2025, 82% of our total costs and expenses were recognized in FoA and 18% were recognized in RL. Our FoA investments were $96.29 billion in 2025 and include expenses relating to headcount, data centers and technical infrastructure as part of our efforts to develop our apps and our advertising services.
In general, while all of these investments are part of our long-term initiative to help build the next computing platform, our metaverse efforts also include notable shorter-term projects developing specific products and services to go to market, whereas our wearables efforts are primarily directed toward longer-term research and development projects.
In general, our Reality Labs efforts include shorter-term projects developing specific products and services to go to market, as well as longer-term research and development projects. All of these investments are part of our long-term initiative to help build the next computing platform.
We expect this will be a complex, evolving, and long-term initiative. We are investing now because we believe this is the next chapter of the internet and will unlock monetization opportunities for businesses, developers, and creators, including around advertising, hardware, and digital goods. 6 Table of Contents Family of Apps Products • Facebook.
We expect this will be a complex, evolving, and long-term initiative. We are investing now because we believe this is the next chapter of the internet and will unlock monetization opportunities for businesses, developers, and creators, including around advertising, hardware, and digital goods. Competition Our business is characterized by innovation, rapid change, and disruptive technologies.
We operate offices in more than 90 cities around the globe, the majority of which have a sales presence. We also invest in and rely on self-service tools to provide direct customer support to our users and partners. For our RL products, our sales and operations efforts utilize third-party sales channels such as retailers, resellers, and our direct-to-consumer channel, Meta.com.
We operate offices in more than 90 cities around the globe, the majority of which have a sales presence. We also invest in and rely on self-service tools to provide direct customer support to our users and partners.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed with the U.S. Securities and Exchange Commission (SEC).
Other trademarks, service marks, or trade names appearing in this Annual Report on Form 10‑K are the property of their respective owners. 10 Table of Contents Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed with the U.S.
For example, in 2025, we expect to spend approximately 50% of our Reality Labs operating expenses on our wearables initiatives, and the remaining 50% on our metaverse initiatives.
In 2026, we expect to spend approximately 70% of our Reality Labs operating expenses on our wearables initiatives, and the remaining 30% on our VR and Horizon initiatives.
In addition, we have invested and will continue to invest in marketing our products and services to grow our brand and help build community around the world. 8 Table of Contents Intellectual Property To establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements, and other contractual rights.
Intellectual Property To establish and protect our proprietary rights, we rely on a combination of patents, trademarks, copyrights, trade secrets, including know-how, license agreements, confidentiality procedures, non-disclosure agreements with third parties, employee disclosure and invention assignment agreements, and other contractual rights.
We have continued to advance our roadmap to include additional AI-enabled offerings such as the Ray-Ban Meta AI glasses, which feature Meta AI, our advanced conversational assistant, as well as other features such as hands-free interaction.
Our current AI glasses include the Ray-Ban Meta and Oakley Meta glasses, which feature Meta AI, our advanced conversational assistant, as well as other features such as hands-free interaction.
Our surveys help us measure company, manager, team, and personal experience over time. Further, our more frequent surveys, such as those that have been administered daily to an ongoing random sample of employees, allow us to measure real-time sentiment around emerging events and company changes.
Further, our more frequent surveys, such as those that have been administered daily to an ongoing random sample of employees, allow us to measure real-time sentiment around emerging events and company changes. These surveys are designed to invite feedback and actionable suggestions, inform decisions, and drive change across the company.
We aim to provide all of our employees with regular performance reviews twice a year as we believe it is an important part of how we support their growth and career development while also recognizing and rewarding their impact at Meta. We also offer career development opportunities and work experience programs that extend beyond the physical and virtual classroom.
We aim to make AI utilization core to the way we operate by providing our personnel access to AI tools and training programs. We provide our employees with regular performance reviews twice a year as we believe it is an important part of how we support their growth and career development while also recognizing and rewarding their impact at Meta.
We are also investing in protecting the security, privacy, and integrity of our platform by investing in both people and technology to strengthen our systems against abuse.
We make significant investments in technology both to improve our existing products and services and to develop new ones, as well as for our marketers and developers. We are also investing in protecting the security, privacy, and integrity of our platform by investing in both people and technology to strengthen our systems against abuse.
We will continue to work to build an inclusive workplace where we can leverage our collective cognitive diversity to build the best products and make the best decisions for the global community we serve. We want our products to work for people around the world and we need to grow and keep the best talent in order to do that.
The Strength of Our Workforce and People Processes We work to build an inclusive workplace where we can leverage our collective cognitive diversity to build the best products and make the best decisions for the global community we serve.
The introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny. In addition, these U.S. and foreign laws and regulations may impose different obligations from each other and create the potential for significant fines to be imposed.
The introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny.
Item 1. Business Overview Our mission is to build the future of human connection and the technology that makes it possible. We build technology that helps people connect and share, find and build communities, and grow businesses.
Item 1. Business Overview Our mission is to build the future of human connection and the technology that makes it possible. Our products enable people to connect and share through mobile devices, personal computers, virtual reality (VR) headsets, and AI glasses.
From time to time, we implement organizational changes to pursue greater efficiency and realign our business and strategic priorities. For example, we have previously undertaken cost reduction efforts such as scaling back budgets, reducing company perks, shrinking our real estate footprint, and employee layoffs and restructurings.
For example, we have previously undertaken cost reduction efforts such as scaling back budgets, reducing company perks, shrinking our real estate footprint, and employee layoffs and restructurings. We make it a priority to treat outgoing employees with respect and provide a generous severance package.
Our employees' total compensation package includes market-competitive salary, bonuses or sales incentives, and equity. We generally offer full-time employees equity at the time of hire and through annual equity grants because we want them to be owners of the company and committed to our long-term success.
We generally offer full-time employees equity at the time of hire and through annual equity grants because we want them to be owners of the company and committed to our long-term success. Through Life@ Meta, our holistic approach to benefits, we continue to provide our employees and their dependents with resources to help them thrive.
Messenger is a simple yet powerful messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls. • Threads. Threads is an application for text-based updates and public conversations, where communities come together to discuss topics of interest.
Messenger is a simple yet powerful messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls. • Meta AI. Meta AI is an assistant that's available across our apps, as a stand-alone app, on our AI glasses, and on the web.
To do this, we utilize various learning modalities, such as live virtual and in-person learning experiences, on-demand e-learning, self-service resources, learning communities, and coaching engagements. The Pulse of Our Workforce Each year, we conduct company-wide employee surveys to help us understand how employees feel about working at Meta and what we can do to improve their experience.
The Pulse of Our Workforce We conduct company-wide employee surveys twice a year to help us understand how employees feel about working at Meta and what we can do to improve their experience. Our surveys help us measure company, manager, team, and personal experience over time.
These surveys are designed to invite feedback and actionable suggestions, inform decisions, and drive change across the company. Compensation, Benefits, Health, and Well-being We offer competitive compensation to attract and retain the best people, and we help care for our people so they can focus on our mission.
Compensation, Benefits, Health, and Well-being We offer competitive compensation to attract and retain the best people, and we help care for our people so they can focus on our mission. Our employees' total compensation package includes market-competitive salary, bonuses or sales incentives, and equity.
We are committed to fostering an enriching environment for our workforce and we are focused on supporting our people in doing the best work of their careers. We offer competitive compensation and a wide range of benefits, including many learning and development resources.
We had a global workforce of 78,865 employees as of December 31, 2025, and we have offices in more than 90 cities around the world. We are committed to fostering an enriching environment for our workforce and we are focused on supporting our people in doing the best work of their careers.
In particular, we regularly evaluate our product roadmaps and make significant changes as our understanding of the technological challenges and market landscape and our product ideas and designs evolve. 7 Table of Contents Competition Our business is characterized by innovation, rapid change, and disruptive technologies.
In particular, we regularly evaluate our product roadmaps and make significant changes as our understanding of the technological challenges and market landscape and our product ideas and designs evolve. Revenue and Investments We report financial results for two segments: Family of Apps (FoA) and Reality Labs (RL).
As our user base grows, as engagement with products like video, VR, and MR increases, and as we deepen our investment in new technologies, our computing needs continue to expand. We have designed and built our own data centers and key portions of our technical infrastructure, and a substantial portion of our technical infrastructure is also provided by third parties.
We have designed and built our own data centers and key portions of our technical infrastructure, and a substantial portion of our technical infrastructure is also provided by third parties. Our ability to provide and continue to innovate our products and services depends on the continued availability of components, power, and network capacity.
We also compete with companies that develop and deliver consumer hardware and augmented, mixed, and virtual reality products and services.
We also compete with companies in the development and application of AI, particularly with respect to the development of frontier AI models, as well as the development and delivery of consumer hardware and augmented and virtual reality products and services.
This includes exploring new technologies such as neural interfaces using electromyography, which lets people control their devices using neuromuscular signals, as well as innovations in AI and hardware to help build next-generation interfaces. In the near term, we are continuing to develop early metaverse and wearables products and experiences that help people feel connected, anytime, anywhere.
In the near term, we are continuing to develop products and experiences that help people feel connected, anytime, anywhere.
For example, Meta AI is an assistant that's available across our apps, on Ray-Ban Meta AI glasses and on the web. It's designed to help people learn, get things done, create content, and connect with others to make the most of every moment. We report financial results for two segments: Family of Apps (FoA) and Reality Labs (RL).
It's designed to help people learn, get things done, create content, and connect with others to make the most of every moment. • Threads. Threads is an application for text-based updates and public conversations, where communities come together to discuss topics of interest.
By making our Llama models openly available, we aim to accelerate AI research and development, improve our own products, and to foster collaboration and innovation within the broader tech community. Sales and Operations The majority of our marketers use our self-service ad platform to launch and manage their advertising campaigns.
We have not released everything we have developed historically and expect to continue training a combination of open and closed models going forward. Sales and Operations The majority of our marketers use our self-service ad platform to launch and manage their advertising campaigns.
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Our products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables.
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We are innovating in artificial intelligence (AI) technologies to build transformative experiences and capabilities across our Family of Apps and new platforms, and to advance our vision to deliver personal superintelligence for everyone. We build technology that helps people connect and share, find and build communities, and grow businesses.
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Our ability to provide and continue to innovate our products and services depends on the continued availability of components, power, and network capacity. We make significant investments in technology both to improve our existing products and services and to develop new ones, as well as for our marketers and developers.
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We are also working to develop the next generation of AI models and advance our vision to build superintelligence, which we define as AI that surpasses human intelligence.
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We also believe in the power of open source innovation and have released our Llama models, consisting of state-of-the-art foundation models that are available for researchers and developers to use and build upon.
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Although it is inherently difficult to predict when superintelligence may be achieved, we are investing now because we believe this has the potential to begin a new era of individual empowerment, where people can direct superintelligence towards what they value in their own lives. Family of Apps Products • Facebook.
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These U.S. federal and state, EU, and other international laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.
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In 2025, we introduced Meta Ray-Ban Display, which combines our AI glasses with an integrated display built into the lens. It comes with the Meta Neural Band, which is a wrist-worn wearable device that uses electromyography to let people control their AI glasses using neuromuscular signals.
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For example, regulatory or legislative actions or litigation concerning the manner in which we display content to our users, moderate content, provide our services to younger users, or are able to use data in various ways, including for advertising, or otherwise relating to content that is made available on our products, have in the past and could in the future adversely affect user growth and engagement, affect the manner in which we provide our services, or adversely affect our financial results, including by imposing significant fines that increasingly may be calculated based on global revenue.
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Historically, the increases in our computing needs have been driven by growth in our user base as well as engagement with products like video and VR. Our increased efforts toward building frontier AI models have driven a significant further expansion in our computing needs and we expect our computing needs to continue to expand as a result.
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In the United States, in 2023, the U.S. Supreme Court heard oral argument in a matter in which the scope of the protections available to online platforms under Section 230 of the Communications Decency Act (Section 230) was at issue, but it ultimately declined to address Section 230 in its decision.
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We have a history of open-sourcing in AI, including releasing our Llama foundation models as well as other models and tools, and continue to believe in the power of open source innovation. By sharing these resources, we aim to accelerate AI research, improve our products, and foster innovation across the tech community.
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In addition, there have been, and continue to be, various other litigation concerning, and state and federal legislative and executive efforts to remove or restrict, the scope of the protections available to online platforms under Section 230, and any such changes may increase our costs or require significant changes to our products, business practices, or operations, which could adversely affect our business and financial results.
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For our RL products, our sales efforts utilize third-party sales channels such as retailers, resellers, and distribution partners, and our direct-to-consumer channel, Meta.com, and several Meta stores.
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We are also subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process or receive certain data that is critical to our operations, including data shared between countries or regions in which we operate and data shared among our products and services.
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In addition, we have invested and will continue to invest in marketing our products and services to grow our brand and help build community around the world.
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If we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services, it could affect our ability to provide our services, the manner in which we provide our services or our ability to target ads, which could adversely affect our financial results.
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These U.S. federal and state, EU, and other international laws and regulations may impose different obligations from each other and create the potential for significant fines to be imposed, including fines that increasingly may be calculated based on global revenue, or other consequences such as changes to our products or business practices.
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For example, in 2016, the European Union and United States agreed to a transfer framework for data transferred from the European Union to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union (CJEU).
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For additional information about government regulation applicable to our business, see Part I, Item 1A, "Risk Factors" and Item 3, "Legal Proceedings" in this Annual Report on Form 10-K. Human Capital At Meta, everything we do is about helping people feel connected and closer, and we are proud of our unique company culture.
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In addition, the other bases upon which Meta relies to transfer such data, such as Standard Contractual Clauses (SCCs), have been subjected to regulatory and judicial scrutiny.
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We offer competitive compensation and a wide range of benefits, including many learning and development resources. From time to time, we implement organizational changes to pursue greater efficiency and realign our business and strategic priorities.
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For example, the CJEU considered the validity of SCCs as a basis to transfer user data from the European Union to the United States following a challenge brought by the Irish Data Protection Commission (IDPC).
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We also offer career development opportunities and work experience programs that extend beyond the physical and virtual classroom. To do this, we utilize various learning modalities, such as live virtual and in-person learning experiences, on-demand e-learning, self-service resources, learning communities, and coaching engagements.
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Although the CJEU upheld the validity of SCCs in July 2020, on May 12, 2023, the IDPC issued a Final Decision concluding that Meta Platforms Ireland's reliance on SCCs in respect of certain transfers of European Economic Area (EEA) Facebook user data was not in compliance with the European General Data Protection Regulation (GDPR).
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To aid in this effort, we continue to implement ways to mitigate potential bias in our people processes and tooling, including our hiring processes and performance management systems. Corporate Information We were incorporated in Delaware in July 2004.
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The IDPC issued an administrative fine of EUR €1.2 billion as well as corrective orders requiring Meta Platforms Ireland to suspend the relevant transfers and to bring its processing operations into compliance with Chapter V GDPR by ceasing the unlawful processing, including storage, 9 Table of Contents of such data in the United States.
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We are appealing this Final Decision and it is currently subject to an interim stay from the Irish High Court. Separately, on March 25, 2022, the European Union and United States announced that they had reached an agreement in principle on a new EU-U.S. Data Privacy Framework (EU-U.S. DPF).
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On October 7, 2022, President Biden signed the Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities (E.O.), and on June 30, 2023, the European Union and the three additional countries making up the EEA were designated by the United States Attorney General as a "qualifying state" under Section 3(f) of the E.O.
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On July 10, 2023, the European Commission adopted an adequacy decision in relation to the United States.
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The adequacy decision concludes that the United States ensures an adequate level of protection for personal data transferred from the European Union to organizations in the United States that are included in the "Data Privacy Framework List," maintained and made publicly available by the United States Department of Commerce pursuant to the EU-U.S. DPF. The implementation of the EU-U.S.
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DPF and the adequacy decision are important and welcome milestones, and we have implemented steps to comply with the above corrective orders following engagement with the IDPC. The EU-U.S. DPF replaces two prior adequacy frameworks which were invalidated by the CJEU. A further invalidation of the EU-U.S.
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DPF by the CJEU could create considerable uncertainty and lead to us being unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe, which would materially and adversely affect our business, financial condition, and results of operations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

155 edited+33 added−17 removed347 unchanged
Biggest changeWe may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results. We are making significant investments in AI initiatives, including generative AI, to, among other things, recommend relevant content across our products, enhance our advertising tools, develop new products, and develop new features for existing products.
Biggest changeWe have made significant investments in AI initiatives, including generative AI and superintelligence, to, among other things, recommend relevant content across our products, enhance our advertising tools, develop new products, and develop new features for existing products, and expect to continue to increase these investments. In particular, we expect our AI initiatives will require increased investment in infrastructure and headcount.
We incur significant expenses in operating our business, and we expect our expenses to continue to increase in the future as we broaden our user base, as users increase the amount and types of content they consume and the data they share with us, for example with respect to video, as we develop and implement new products, as we market new and existing products and promote our brands, as we continue to expand our technical infrastructure, as we continue to invest in new and unproven technologies, including AI and machine learning, and as we continue our efforts to focus on privacy, safety, security, and content and advertising review and enforcement.
We incur significant expenses in operating our business, and we expect our expenses to continue to increase in the future as we continue to invest in new and unproven technologies, including AI and machine learning, as we broaden our user base, as users increase the amount and types of content they consume and the data they share with us, for example with respect to video, as we develop and implement new products, as we market new and existing products and promote our brands, as we continue to expand our technical infrastructure, and as we continue our efforts to focus on privacy, safety, security, and content and advertising review and enforcement.
For example, in response to regulatory developments in Europe, we announced plans to change the legal basis for behavioral advertising on Facebook and Instagram in the European Union, European Economic Area, and Switzerland from "legitimate interests" to "consent," and in November 2023 we began offering users in the region a "subscription for no ads" alternative.
For example, in response to regulatory developments in Europe, we announced plans to change the legal basis for behavioral advertising on Facebook and Instagram in the European Union, European Economic Area, and Switzerland from "legitimate interests" to "consent," and in November 2023 we began offering users in the region a "subscription for no ads" alternative.
We are engaging with regulators on our consent model, including regarding compliance with requirements under the GDPR, DMA, and EU consumer laws. For example, in March 2024, the European Commission opened formal proceedings regarding the compliance of our "subscription for no ads" model with requirements under the DMA, and it issued preliminary findings in July 2024.
We are engaging with regulators on our consent model, including regarding compliance with requirements under the GDPR, DMA, and EU consumer laws. For example, in March 2024, the European Commission opened formal proceedings regarding the compliance of our "subscription for no ads" model with requirements under the DMA, and it issued preliminary findings in July 2024.
In addition, the European Data Protection Board has published an opinion on the operation of such models under GDPR and European consumer protection organizations have raised concerns regarding our compliance with consumer protection laws.
In addition, the European Data Protection Board has published an opinion on the operation of such models under GDPR and European consumer protection organizations have raised concerns regarding our compliance with consumer protection laws.
In July 2019, we entered into a settlement and modified consent order to resolve the FTC inquiry, which took effect in April 2020 and, among other things, required us to significantly enhance our practices and processes for privacy compliance and oversight. The state attorneys general inquiries and litigation, and certain government inquiries in other jurisdictions remain ongoing.
In July 2019, we entered into a settlement and modified consent order to resolve the FTC inquiry, which took effect in April 2020 and, among other things, required us to significantly enhance our practices and processes for privacy compliance and oversight. Certain state attorneys general inquiries and litigation, and certain government inquiries in other jurisdictions remain ongoing.
We also notify the IDPC, our lead European Union privacy regulator under the GDPR, and other regulators of certain other personal data breaches and privacy issues, issue similar notifications to European regulators under other laws (such as UK GDPR and Member State implementations of the ePrivacy Directive), and are subject to inquiries and investigations by the IDPC and other regulators regarding various aspects of our regulatory compliance.
We also notify the IDPC, our lead European Union privacy regulator under the GDPR, and other regulators of certain other personal data breaches and privacy issues, issue similar notifications to European and other regulators under other laws (such as UK GDPR and Member State implementations of the ePrivacy Directive), and are subject to inquiries and investigations by the IDPC and other regulators regarding various aspects of our regulatory compliance.
In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our Class A common stock has in the past fluctuated and may in the future fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our revenue and other operating results for either of our reportable segments; • the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; • actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • additional shares of our stock being sold into the market by us, our existing stockholders, or in connection with acquisitions, or the anticipation of such sales; • investor sentiment with respect to our competitors, our business partners, and our industry in general; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • announcements by us or estimates by third parties of actual or anticipated changes in the size of our user base, the level of user engagement, or the effectiveness of our ad products; • changes in operating performance and stock market valuations of technology companies in our industry, including our developers and competitors; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • the inclusion, exclusion, or deletion of our stock from any trading indices, such as the S&P 500 Index; • media coverage of our business and financial performance; • lawsuits threatened or filed against us, or developments in pending lawsuits; • adverse government actions or legislative or regulatory developments relating to advertising, competition, content, privacy, or other matters, including interim or final rulings by tax, judicial, or regulatory bodies; • trading activity in our share repurchase program; and 47 Table of Contents • other events or factors, including those resulting from war, incidents of terrorism, pandemics, and other disruptive external events, or responses to these events.
In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our Class A common stock has in the past fluctuated and may in the future fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our revenue and other operating results for either of our reportable segments; • the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; • actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • additional shares of our stock being sold into the market by us, our existing stockholders, or in connection with acquisitions, or the anticipation of such sales; • investor sentiment with respect to our competitors, our business partners, and our industry in general; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • announcements by us or estimates by third parties of actual or anticipated changes in the size of our user base, the level of user engagement, or the effectiveness of our ad products; 46 Table of Contents • changes in operating performance and stock market valuations of technology companies in our industry, including our developers and competitors; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • the inclusion, exclusion, or deletion of our stock from any trading indices, such as the S&P 500 Index; • media coverage of our business and financial performance; • lawsuits threatened or filed against us, or developments in pending lawsuits; • adverse government actions or legislative or regulatory developments relating to advertising, competition, content, privacy, or other matters, including interim or final rulings by tax, judicial, or regulatory bodies; • trading activity in our share repurchase program; and • other events or factors, including those resulting from war, incidents of terrorism, pandemics, and other disruptive external events, or responses to these events.
In addition, we are subject to a variety of risks inherent in doing business internationally, including: • political, social, or economic instability; • risks related to legal, regulatory, and other government scrutiny applicable to U.S. companies with sales and operations in foreign jurisdictions, including with respect to privacy, tax, law enforcement, content, trade compliance, supply chain, competition, consumer protection, intellectual property, environmental, health and safety, accessibility, licensing, and infrastructure matters; • potential damage to our brand and reputation due to compliance with local laws, including potential censorship or requirements to provide user information to local authorities; • enhanced difficulty in reviewing content on our platform and enforcing our community standards, terms of service, and other policies across different languages and countries; • fluctuations in currency exchange rates and compliance with currency controls; • foreign exchange controls and tax and other regulations and orders that might prevent us from repatriating cash earned in countries outside the United States or otherwise limit our ability to move cash freely, and impede our ability to invest such cash efficiently; • higher levels of credit risk and payment fraud; • enhanced difficulties of integrating any foreign acquisitions; • burdens of complying with a variety of foreign laws, including laws related to taxation, content removal, 31 Table of Contents content moderation, data localization, data protection, competition, e-commerce and payments, and regulatory oversight; • reduced protection for intellectual property rights in some countries; • difficulties in staffing, managing, and overseeing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations, including difficulties arising from personnel working remotely; • compliance with statutory equity requirements and management of tax consequences; and • geopolitical events affecting us, our marketers or our industry, including trade disputes, armed conflicts, and pandemics.
In addition, we are subject to a variety of risks inherent in doing business internationally, including: • political, social, or economic instability; • risks related to legal, regulatory, and other government scrutiny applicable to U.S. companies with sales and operations in foreign jurisdictions, including with respect to privacy, tax, law enforcement, content, trade compliance, supply chain, competition, consumer protection, intellectual property, environmental, health and safety, accessibility, licensing, and infrastructure matters; • potential damage to our brand and reputation due to compliance with local laws, including potential censorship or requirements to provide user information to local authorities; • enhanced difficulty in reviewing content on our platform and enforcing our community standards, terms of service, and other policies across different languages and countries; • fluctuations in currency exchange rates and compliance with currency controls; • foreign exchange controls and tax and other regulations and orders that might prevent us from repatriating cash earned in countries outside the United States or otherwise limit our ability to move cash freely, and impede our ability to invest such cash efficiently; • higher levels of credit risk and payment fraud; • enhanced difficulties of integrating any foreign acquisitions; • burdens of complying with a variety of foreign laws, including laws related to taxation, content removal, content moderation, data localization, data protection, competition, e-commerce and payments, and regulatory oversight; • reduced protection for intellectual property rights in some countries; • difficulties in staffing, managing, and overseeing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations, including difficulties arising from personnel working remotely; • compliance with statutory equity requirements and management of tax consequences; and • geopolitical events affecting us, our marketers or our industry, including trade disputes, armed conflicts, and 30 Table of Contents pandemics.
Our advertising revenue can also be adversely affected by a number of other factors, including: • decreases in user engagement, including time spent on our products; • our inability to continue to increase user access to and engagement with our products; • product changes or inventory management decisions we may make that change the size, format, frequency, or relative prominence of ads displayed on our products or of other unpaid content shared by marketers on our products; • our inability to maintain or increase marketer demand, the pricing of our ads, or both; • our inability to maintain or increase the quantity or quality of ads shown to users; • changes to the content or application of third-party policies that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; • adverse litigation, government actions, or legislative, regulatory, or other legal developments relating to advertising, including developments that may impact certain advertisers' ability to advertise on our platform or our ability to deliver, target, or measure the effectiveness of advertising; • user behavior or product changes that may reduce traffic to features or products that we monetize at a higher rate, such as our Feed and Stories products, including as a result of increased usage of our Reels or other video or messaging products; • reductions of advertising due to our efforts to implement or enforce advertising policies that protect the security and integrity of our platform or that we believe are needed to comply with global content, security, or integrity obligations; 17 Table of Contents • the availability, accuracy, utility, and security of analytics and measurement solutions offered by us or third parties that demonstrate the value of our ads to marketers, or our ability to further improve such tools; • loss of advertising market share to our competitors, including if prices to purchase our ads increase or if competitors offer lower priced, more integrated, or otherwise more effective products; • limitations on our ability to offer a number of our most significant products and services, including Facebook and Instagram, in Europe as a result of European courts invalidating the EU-U.S.
Our advertising revenue can also be adversely affected by a number of other factors, including: • decreases in user engagement, including time spent on our products; • our inability to continue to increase user access to and engagement with our products; • product changes or inventory management decisions we may make that change the size, format, frequency, or relative prominence of ads displayed on our products or of other unpaid content shared by marketers on our products; • our inability to maintain or increase marketer demand, the pricing of our ads, or both; • our inability to maintain or increase the quantity or quality of ads shown to users; • changes to the content or application of third-party policies that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; • adverse litigation, government actions, or legislative, regulatory, or other legal developments relating to advertising, including developments that may impact certain advertisers' ability to advertise on our platform or our ability to deliver, target, or measure the effectiveness of advertising; • user behavior or product changes that may reduce traffic to features or products that we monetize at a higher rate, such as our Feed and Stories products, including as a result of increased usage of our Reels or other video or messaging products; • reductions of advertising due to our efforts to implement or enforce advertising policies that protect the security and integrity of our platform or that we believe are needed to comply with global content, security, or integrity obligations; 15 Table of Contents • the availability, accuracy, utility, and security of analytics and measurement solutions offered by us or third parties that demonstrate the value of our ads to marketers, or our ability to further improve such tools; • loss of advertising market share to our competitors, including if prices to purchase our ads increase or if competitors offer lower priced, more integrated, or otherwise more effective products; • limitations on our ability to offer a number of our most significant products and services, including Facebook and Instagram, in Europe as a result of European courts invalidating the EU-U.S.
Any number of factors can negatively affect user retention, growth, and engagement, including if: • users increasingly engage with other competitive products or services; • we fail to introduce new features, products, or services that users find engaging or if we introduce new products or services, or make changes to existing products and services, that are not favorably received; • users feel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format, size, and quality of ads that we display; • users have difficulty installing, updating, or otherwise accessing our products on mobile devices as a result of actions by us or third parties that we rely on to distribute our products and deliver our services; • user behavior on any of our products changes, including decreases in the quality and frequency of content shared on our products and services; • we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance; 15 Table of Contents • there are decreases in user sentiment due to questions about the quality or usefulness of our products or our user data practices, concerns about the nature of content made available on our products, or concerns related to privacy, safety, security, well-being, or other factors; • we are unable to manage and prioritize information to ensure users are presented with content that is appropriate, interesting, useful, and relevant to them; • we are unable to obtain or attract engaging third-party content; • we are unable to successfully maintain or grow usage of and engagement with applications that integrate with our products; • users adopt new technologies where our products may be displaced in favor of other products or services, or may not be featured or otherwise available; • there are changes mandated by legislation, government and regulatory authorities, or litigation that adversely affect our products or users; • we are unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe, or are otherwise limited in our business operations, as a result of European courts invalidating the EU-U.S.
Any number of factors can negatively affect user retention, growth, and engagement, including if: • users increasingly engage with other competitive products or services; • we fail to introduce new features, products, or services that users find engaging or if we introduce new products or services, or make changes to existing products and services, that are not favorably received; • users feel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format, size, and quality of ads that we display; • users have difficulty installing, updating, or otherwise accessing our products on mobile devices as a result of actions by us or third parties that we rely on to distribute our products and deliver our services; • user behavior on any of our products changes, including decreases in the quality and frequency of content shared on our products and services; • we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance; 13 Table of Contents • there are decreases in user sentiment due to questions about the quality or usefulness of our products or our user data practices, concerns about the nature of content made available on our products, or concerns related to privacy, safety, security, well-being, or other factors; • we are unable to manage and prioritize information to ensure users are presented with content that is appropriate, interesting, useful, and relevant to them; • we are unable to obtain or attract engaging third-party content; • we are unable to successfully maintain or grow usage of and engagement with applications that integrate with our products; • users adopt new technologies where our products may be displaced in favor of other products or services, or may not be featured or otherwise available; • there are changes mandated by legislation, government and regulatory authorities, or litigation that adversely affect our products or users; • we are unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe, or are otherwise limited in our business operations, as a result of European courts invalidating the EU-U.S.
If we are unable to successfully implement and comply with the mandates of the FTC consent order (including any future modifications to the order), GDPR, U.S. state privacy laws, youth social media laws, ePrivacy Directive, DMA, DSA, or other regulatory or legislative requirements, or if any relevant authority believes that we are in violation of the consent order or other applicable requirements, we may be subject to regulatory or governmental investigations or lawsuits, which may result in significant monetary fines or damages (including for loss of control of data without other damage), judgments, penalties, or other remedies, and we may also be required to make additional changes to our business practices.
If we are unable to successfully implement and comply with the mandates of the FTC consent order (including any future modifications to the order), GDPR and UK GDPR, U.S. state privacy laws, youth social media laws, ePrivacy Directive, DMA, DSA, or other regulatory or legislative requirements, or if any relevant authority believes that we are in violation of the consent order or other applicable requirements, we may be subject to regulatory or governmental investigations or lawsuits, which may result in significant monetary fines or damages (including for loss of control of data without other damage), judgments, penalties, or other remedies, and we may also be required to make additional changes to our business practices.
DPF or regulators, courts, or legislative bodies determining that the legal bases we rely upon to transfer user data from the European Union to the United States are invalid; • limitations on our ability to deliver ads to users under the age of 18 and, in some cases, to continue to offer certain products or services to certain cohorts of users, whether voluntarily, as a result of new laws, regulations, or government actions in the United States and other jurisdictions, or otherwise; • changes in our marketing and sales or other operations that we are required to or elect to make as a result of risks related to complying with laws or regulatory requirements or other government actions; • decisions by marketers to reduce their advertising as a result of announcements by us or adverse media reports or other negative publicity involving us, our user data practices, our advertising metrics or tools, content on our products, our interpretation, implementation, or enforcement of policies relating to content on our products (including as a result of decisions or recommendations from the independent Oversight Board), developers with applications that are integrated with our products, or other companies in our industry; • reductions of advertising by marketers due to illegal, illicit, or otherwise objectionable content made available on our products by third parties, questions about our user data practices or the security of our platform, concerns about brand safety or potential legal liability, or uncertainty regarding regulatory developments or their own legal and compliance obligations, including with respect to artificial intelligence; • the effectiveness of our ad targeting or degree to which users consent to, opt out of, or reduce the use of data for ads, including as a result of product changes and controls that we have implemented or may implement in the future in connection with the GDPR, ePrivacy Directive, DMA, DMCC, U.S. state privacy laws including the CCPA, and other laws, regulations, regulatory actions, or litigation, or otherwise, that impact our ability to use data for advertising purposes (for example, in response to regulatory developments in Europe, we began offering our users a "subscription for no ads" alternative in the European Union, European Economic Area, and Switzerland, and subsequently in November 2024 provided users in those regions who elect to continue receiving our services free-of-charge, supported by ads, an option to see less personalized ads); • the degree to which users cease or reduce the number of times they engage with our ads; • changes in the way advertising on mobile devices or on personal computers is measured or priced; • the success of technologies designed to block the display of ads or ad measurement tools; • changes in the composition of our marketer base or our inability to maintain or grow our marketer base; and • the impact of macroeconomic and geopolitical conditions, whether in the advertising industry in general, or among specific types of marketers or within particular geographies, which in turn can have broader effects in other regions (for example, the war in Ukraine and service restrictions imposed by the Russian government have adversely affected our advertising business in Europe and other regions, and advertiser spending also can be subject to adverse effects from conflicts in the Middle East or the implementation of tariffs by the United States, China, or other governments).
DPF or regulators, courts, or legislative bodies determining that the legal bases we rely upon to transfer user data from the European Union to the United States are invalid; • limitations on our ability to deliver ads to users under the age of 18 and, in some cases, to continue to offer certain products or services to certain cohorts of users, whether voluntarily, as a result of new laws, regulations, or government actions in the United States and other jurisdictions, or otherwise; • changes in our marketing and sales or other operations that we are required to or elect to make as a result of risks related to complying with laws or regulatory requirements or other government actions; • decisions by marketers to reduce their advertising as a result of announcements by us or adverse media reports or other negative publicity involving us, our user data practices, our advertising metrics or tools, content on our products, our interpretation, implementation, or enforcement of policies relating to content on our products (including as a result of decisions or recommendations from the independent Oversight Board), developers with applications that are integrated with our products, or other companies in our industry; • reductions of advertising by marketers due to illegal, illicit, or otherwise objectionable content made available on our products by third parties, questions about our user data practices or the security of our platform, concerns about brand safety or potential legal liability, or uncertainty regarding regulatory developments or their own legal and compliance obligations, including with respect to artificial intelligence; • the effectiveness of our ad targeting or degree to which users consent to, opt out of, or reduce the use of data for ads, including as a result of product changes and controls that we have implemented or may implement in the future in connection with the GDPR, ePrivacy Directive, DMA, DMCC, U.S. state privacy laws, and other laws, regulations, regulatory actions, or litigation, or otherwise, that impact our ability to use data for advertising purposes (for example, in response to regulatory developments in Europe, we began offering our users a "subscription for no ads" alternative in the European Union, European Economic Area, and Switzerland, and subsequently in November 2024 provided users in those regions who elect to continue receiving our services free-of-charge, supported by ads, an option to see less personalized ads); • the degree to which users cease or reduce the number of times they engage with our ads; • changes in the way advertising on mobile devices or on personal computers is measured or priced; • the success of technologies designed to block the display of ads or ad measurement tools; • changes in the composition of our marketer base or our inability to maintain or grow our marketer base; and • the impact of macroeconomic and geopolitical conditions, whether in the advertising industry in general, or among specific types of marketers or within particular geographies, which in turn can have broader effects in other regions (for example, the war in Ukraine and service restrictions imposed by the Russian government have adversely affected our advertising business in Europe and other regions, and advertiser spending also is subject to adverse effects from conflicts in the Middle East and the implementation of tariffs or other existing or future trade policies by the United States, China, and other governments).
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • our ability to maintain and grow our user base and user engagement, particularly for our products that deliver ad impressions; • our ability to attract and retain marketers in a particular period; • our ability to recognize revenue or collect payments from marketers or advertising agencies or resellers in a particular period; • fluctuations in spending by our marketers due to seasonality, such as historically strong spending in the fourth quarter of each year, episodic regional or global events, or other factors; • the frequency, prominence, size, format, and quality of ads shown to users; • the enforcement of our advertising policies, including the removal of ads and marketers from our platform; • the success of technologies designed to block the display of ads; • changes to the content or application of third-party policies that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; • the pricing of our ads and other products; • the diversification and growth of revenue sources beyond advertising on Facebook and Instagram; • our ability to generate revenue from Payments, or the sale of our consumer hardware products or other products we may introduce in the future; 25 Table of Contents • changes to existing products or services or the development and introduction of new products or services by us or our competitors; • user behavior or product changes that may reduce traffic to features or products that we successfully monetize; • increases in marketing, sales, and other operating expenses, as well as capital expenditures, that we will incur to grow and expand our business and to remain competitive, including costs related to our data centers and technical infrastructure as well as other costs relating to our AI initiatives; • costs related to our privacy, safety, security, and content and advertising review and enforcement efforts, including as a result of implementing changes to our practices, whether voluntarily, in connection with laws, regulations, regulatory actions, or decisions or recommendations from the independent Oversight Board, or otherwise; • costs and expenses related to the development, manufacturing, and delivery of our consumer hardware products; • our ability to maintain gross margins and operating margins; • costs related to acquisitions, including costs associated with amortization and additional investments to develop the acquired technologies; • charges associated with impairment or abandonment of any assets on our balance sheet, including as a result of changes to our real property lease arrangements and data center assets; • our ability to obtain equipment, components, and labor for our data centers and other technical infrastructure in a timely and cost-effective manner; • system failures or outages or government blocking that prevent us from serving ads for any period of time; • breaches of security or privacy, and the costs associated with any such breaches and remediation; • changes in the manner in which we distribute our products or inaccessibility of our products due to third-party actions; • fees paid to third parties for content or the distribution of our products; • refunds or other concessions provided to advertisers; • share-based compensation expense, including acquisition-related expense; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy, data protection, antitrust, content, or AI, or actions by governments or regulators, including fines, orders, or consent decrees; • the overall tax rate for our business, which is affected by the mix of income we earn in the U.S. and in jurisdictions with different tax rates, the effects of share-based compensation, the effects of integrating intellectual property from acquisitions, the effects of changes in our business or structure, and the effects of discrete items such as legal and tax settlements and tax elections; • the impact of changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued, and may significantly affect the effective tax rate of that period; • tax obligations that may arise from resolutions of tax examinations, including the examination we are currently under by the Internal Revenue Service (IRS), that materially differ from the amounts we have anticipated; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • trading activity in our share repurchase program; 26 Table of Contents • fluctuations in the market values of our investments in marketable securities, in the valuation of our non-marketable equity securities, and in interest rates; • the incurrence of indebtedness or our ability to refinance existing indebtedness on acceptable terms; • changes in U.S. generally accepted accounting principles; and • changes in regional or global business, macroeconomic, or geopolitical conditions, which may impact the other factors described above.
Our financial results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • our ability to maintain and grow our user base and user engagement, particularly for our products that deliver ad impressions; 23 Table of Contents • our ability to attract and retain marketers in a particular period; • our ability to recognize revenue or collect payments from marketers or advertising agencies or resellers in a particular period; • fluctuations in spending by our marketers due to seasonality, such as historically strong spending in the fourth quarter of each year, episodic regional or global events, or other factors; • the frequency, prominence, size, format, and quality of ads shown to users; • the enforcement of our advertising policies, including the removal of ads and marketers from our platform; • the success of technologies designed to block the display of ads; • changes to the content or application of third-party policies that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; • the pricing of our ads and other products; • the diversification and growth of revenue sources beyond advertising on Facebook and Instagram; • our ability to generate revenue from Payments, or the sale of our consumer hardware products or other products we may introduce in the future; • changes to existing products or services or the development and introduction of new products or services by us or our competitors; • user behavior or product changes that may reduce traffic to features or products that we successfully monetize; • increases in marketing, sales, and other operating expenses, as well as capital expenditures, that we will incur to grow and expand our business and to remain competitive, including costs related to our data centers and technical infrastructure as well as other costs relating to our AI initiatives; • costs related to our privacy, safety, security, and content and advertising review and enforcement efforts, including as a result of implementing changes to our practices, whether voluntarily, in connection with laws, regulations, regulatory actions, or decisions or recommendations from the independent Oversight Board, or otherwise; • costs and expenses related to the development, manufacturing, and delivery of our consumer hardware products; • our ability to maintain gross margins and operating margins; • costs related to acquisitions or other strategic transactions, including costs associated with amortization and additional investments to develop acquired technologies; • charges associated with impairment or abandonment of any assets on our balance sheet, including as a result of changes to our real property lease arrangements and data center and infrastructure assets; • our ability to obtain equipment, components, and labor for our data centers and other technical infrastructure in a timely and cost-effective manner; • system failures or outages or government blocking that prevent us from serving ads for any period of time; • breaches of security or privacy, and the costs associated with any such breaches and remediation; • changes in the manner in which we distribute our products or inaccessibility of our products due to third-party actions; • fees paid to third parties for content or the distribution of our products; • refunds or other concessions provided to advertisers; 24 Table of Contents • share-based compensation expense, including acquisition-related expense; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to privacy, data protection, consumer protection, antitrust, content, or AI, or actions by governments or regulators, including fines, orders, or consent decrees; • the overall tax rate for our business, which is affected by the mix of income we earn in the U.S. and in jurisdictions with different tax rates, the effects of share-based compensation, the effects of integrating intellectual property from acquisitions, the effects of changes in our business or structure, and the effects of discrete items such as legal and tax settlements and tax elections; • the impact of changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period such laws are enacted or interpretations are issued, and may significantly affect the effective tax rate of that period; • tax obligations that may arise from resolutions of tax examinations, including the examination we are currently under by the Internal Revenue Service (IRS), that materially differ from the amounts we have anticipated; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • trading activity in our share repurchase program; • fluctuations in the market values of our investments in marketable securities, in the valuation of our non-marketable equity investments, and in interest rates; • the incurrence of indebtedness or our ability to refinance existing indebtedness on acceptable terms; • changes in U.S. generally accepted accounting principles; and • changes in regional or global business, macroeconomic, or geopolitical conditions, which may impact the other factors described above.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Product Offerings • our ability to add and retain users and maintain levels of user engagement with our products; • the loss of, or reduction in spending by, our marketers; • reduced availability of data signals used by our ad targeting and measurement tools; • ineffective operation with mobile operating systems or changes in our relationships with mobile operating system partners; • failure of our new products, or changes to our existing products, to attract or retain users or generate revenue; Risks Related to Our Business Operations and Financial Results • our ability to compete effectively; • fluctuations in our financial results; • unfavorable media coverage and other risks affecting our ability to maintain and enhance our brands; • our ability to build, maintain, and scale our technical infrastructure, and risks associated with disruptions in our service, catastrophic events, and crises; • operating our business in multiple countries around the world; • litigation, including class action lawsuits; • acquisitions and our ability to successfully integrate our acquisitions; Risks Related to Government Regulation and Enforcement • government restrictions on access to Facebook or our other products, or other actions that impair our ability to sell or deliver advertising, in their countries; • complex and evolving U.S. and foreign privacy, data use, data combination, data protection, content and content moderation, competition, youth, safety, consumer protection, advertising, and other laws and regulations, including the General Data Protection Regulation (GDPR), Digital Markets Act (DMA), Digital Services Act (DSA), Artificial Intelligence Act (EU AI Act), and the UK Digital Markets, Competition and Consumer Act (DMCC); • the impact of government investigations, enforcement actions, and settlements, including litigation and investigations by privacy, consumer protection, and competition authorities, among others; 14 Table of Contents • our ability to comply with regulatory and legislative privacy requirements, including our consent order with the Federal Trade Commission (FTC); Risks Related to Data, Security, Platform Integrity, and Intellectual Property • the occurrence of security breaches, improper access to or disclosure of our data or user data, and other cyber incidents, as well as intentional misuse of our services and other undesirable activity on our platform; • our ability to obtain, maintain, protect, and enforce our intellectual property rights; and Risks Related to Ownership of Our Class A Common Stock • limitations on the ability of holders of our Class A Common Stock to influence corporate matters due to the dual class structure of our common stock and the control of a majority of the voting power of our outstanding capital stock by our founder, Chairman, and Chief Executive Officer (CEO).
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Product Offerings • our ability to add and retain users and maintain levels of user engagement with our products; • the loss of, or reduction in spending by, our marketers; • reduced availability of data signals used by our ad targeting and measurement tools; • ineffective operation with mobile operating systems or changes in our relationships with mobile operating system partners; • failure of our new products, or changes to our existing products, to attract or retain users or generate revenue; Risks Related to Our Business Operations and Financial Results • our ability to compete effectively; • fluctuations in our financial results; • unfavorable media coverage and other risks affecting our ability to maintain and enhance our brands; • our ability to build, maintain, and scale our technical infrastructure, and risks associated with disruptions in our service, catastrophic events, and crises; • operating our business in multiple countries around the world; • litigation, including class action lawsuits; • acquisitions and our ability to successfully integrate our acquisitions; Risks Related to Government Regulation and Enforcement • government restrictions on access to Facebook or our other products, or other actions that impair our ability to sell or deliver advertising, in their countries; • complex and evolving U.S. and foreign privacy, data use, data combination, data protection, content and content moderation, competition, youth, safety, consumer protection, advertising, and other laws and regulations, including the General Data Protection Regulation (GDPR), Digital Markets Act (DMA), Digital Services Act (DSA), UK Online Safety Act (OSA), Artificial Intelligence Act (EU AI Act), and the UK Digital Markets, Competition and Consumer Act (DMCC); • the impact of government investigations, enforcement actions, and settlements, including litigation and investigations by privacy, consumer protection, and competition authorities, among others; 12 Table of Contents • our ability to comply with regulatory and legislative privacy requirements, including our consent order with the Federal Trade Commission (FTC); Risks Related to Data, Security, Platform Integrity, and Intellectual Property • the occurrence of security breaches, improper access to or disclosure of our data or user data, and other cyber incidents, as well as intentional misuse of our services and other undesirable activity on our platform; • our ability to obtain, maintain, protect, and enforce our intellectual property rights; and Risks Related to Ownership of Our Class A Common Stock • limitations on the ability of holders of our Class A Common Stock to influence corporate matters due to the dual class structure of our common stock and the control of a majority of the voting power of our outstanding capital stock by our founder, Chairman, and Chief Executive Officer (CEO).
Compliance with our FTC consent order, the GDPR, U.S. state privacy laws, youth social media laws, the ePrivacy Directive, the DMA, the DSA, and other regulatory and legislative privacy requirements require significant operational resources and modifications to our business practices, and any compliance failures may have a material adverse effect on our business, reputation, and financial results.
Compliance with our FTC consent order, the GDPR, U.S. state privacy laws, youth social media laws, the ePrivacy Directive, the DMA, the DSA, the OSA, and other regulatory and legislative privacy requirements require significant operational resources and modifications to our business practices, and any compliance failures may have a material adverse effect on our business, reputation, and financial results.
The occurrence of any of these or other factors in the future, including our enforcement efforts, could result in a reduction in marketer spend or demand for our ads, which may reduce the prices we receive for our ads, could cause marketers to stop advertising with us altogether, or could otherwise negatively affect our revenue and financial results, and could be material. 18 Table of Contents Our ad targeting and measurement tools incorporate data signals from user activity on websites and services that we do not control, as well as signals generated within our products, and changes to the regulatory environment, third-party mobile operating systems and browsers, and our own products have impacted, and we expect will continue to impact, the availability of such signals, which will adversely affect our advertising revenue.
The occurrence of any of these or other factors in the future, including our enforcement efforts, could result in a reduction in marketer spend or demand for our ads, which may reduce the prices we receive for our ads, could cause marketers to stop advertising with us altogether, or could otherwise negatively affect our revenue and financial results, and could be material. 16 Table of Contents Our ad targeting and measurement tools incorporate data signals from user activity on websites and services that we do not control, as well as signals generated within our products, and changes to the regulatory environment, third-party mobile operating systems and browsers, and our own products have impacted, and we expect will continue to impact, the availability of such signals, which will adversely affect our advertising revenue.
For example, we have relatively limited experience with consumer hardware products and virtual, augmented, and mixed reality technology, which may adversely affect our ability to successfully develop and market these evolving products and technologies. We are also making significant investments in artificial intelligence (AI) initiatives across our business.
For example, we have relatively limited experience with consumer hardware products and virtual and augmented reality technology, which may adversely affect our ability to successfully develop and market these evolving products and technologies. We are also making significant investments in artificial intelligence (AI) initiatives across our business.
The California Consumer Privacy Act, as amended by the California Privacy Rights Act (CCPA), also establishes certain transparency rules and creates certain data privacy rights for users, including limitations on our use of certain sensitive personal information and more ability for users to control the purposes for which their data is shared with third parties.
The California Consumer Privacy Act, as amended by the California Privacy Rights Act, also establishes certain transparency rules and creates certain data privacy rights for users, including limitations on our use of certain sensitive personal information and more ability for users to control the purposes for which their data is shared with third parties.
While enforcement of a number of these statutes (or parts of them) has been enjoined as a result of legal challenges to them, it is possible that the decisions to enjoin these statutes may be overturned, the injunctive orders may expire, and certain statutes are coming into effect that may not be subject to injunctions.
While enforcement of a number of these statutes (or parts of them) has been enjoined or stayed as a result of legal challenges to them, it is possible that the decisions to enjoin these statutes may be overturned, the injunctive orders may expire, and certain statutes are coming into effect that may not be subject to injunctions.
Zuckerberg with the ability to control the outcome of matters requiring stockholder approval, even if he owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock; 48 Table of Contents • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of common stock, certain amendments to our certificate of incorporation or bylaws will require the approval of two-thirds of the combined vote of our then-outstanding shares of Class A and Class B common stock; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, our board of directors will be classified into three classes of directors with staggered three-year terms and directors will only be able to be removed from office for cause; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, our stockholders will only be able to take action at a meeting of stockholders and not by written consent; • only our board chair, our chief executive officer, our president, or a majority of our board of directors are authorized to call a special meeting of stockholders; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established, and shares of which may be issued, without stockholder approval; and • certain litigation against us can only be brought in Delaware.
Zuckerberg with the ability to control the outcome of matters requiring stockholder approval, even if he owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of common stock, certain amendments to our certificate of incorporation or bylaws will require the approval of two-thirds of the combined vote of our then-outstanding shares of Class A and Class B common stock; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, our board of directors will be classified into three classes of directors with staggered three-year terms and directors will only be able to be removed from office for cause; • when the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock, our stockholders will only be able to take action at a meeting of stockholders and not by written consent; • only our board chair, our chief executive officer, our president, or a majority of our board of directors are authorized to call a special meeting of stockholders; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established, and shares of which may be issued, without stockholder approval; and • certain litigation against us can only be brought in Delaware.
Our reputation has been, and could in the future be, adversely affected by unfavorable publicity regarding, for example, our privacy practices, advertising policies, product decisions, product quality, litigation or regulatory activity, government surveillance, the actions of our advertisers, the actions of our developers whose products are integrated with our products, the use of our products or services for illicit or objectionable ends, the substance or enforcement of our community standards, terms of service, or other policies, the actions of our users, the quality and integrity of content shared on our platform, the perceived or actual impacts of our products or services on user well-being, our management, or the actions of other companies that provide similar services to ours.
Our reputation has been, and could in the future be, adversely affected by unfavorable publicity regarding, for example, our privacy practices, advertising policies, product decisions, product quality, litigation or regulatory activity, government surveillance, the actions of our advertisers, the actions of our developers whose products are integrated with our products, the use of our products or services for illicit or objectionable ends, the substance or enforcement of our community standards, terms of service, or other policies, the actions of our users, the quality and integrity of content shared on our platform, the perceived or actual impacts of our products or services on user well-being, including for younger users, our management, or the actions of other companies that provide similar services to ours.
In particular, the nature of our business exposes us to claims related to defamation, dissemination of misinformation or news hoaxes, deceptive and fraudulent advertising, discrimination, harassment, intellectual property rights, rights of publicity and privacy, personal injury torts, laws regulating hate speech or other types of content, on- or offline safety and well-being (such as acts of violence, terrorism, improper promotion or distribution of pharmaceuticals and illicit drugs, human exploitation, child exploitation, illegal gaming, and other fraudulent or otherwise illegal activity), products liability, consumer protection, and breach of contract, among others.
In particular, the nature of our business exposes us to claims and inquiries related to defamation, dissemination of misinformation or news hoaxes, deceptive and fraudulent advertising, sanctions, discrimination, harassment, intellectual property rights, rights of publicity and privacy, personal injury torts, laws regulating hate speech or other types of content, on- or offline safety and well-being (such as acts of violence, terrorism, improper promotion or distribution of pharmaceuticals and illicit drugs, human exploitation, child exploitation, illegal gaming, and other fraudulent or otherwise illegal activity), products liability, consumer protection, and breach of contract, among others.
In addition, mobile operating system and browser providers, such as Apple and Google, have implemented product changes and/or announced future plans to limit the ability of websites and application developers to collect and use these signals to target and measure advertising.
In addition, mobile operating system and browser providers, such as Apple and Google, have implemented product changes and/or announced plans to limit the ability of websites and application developers to collect and use these signals to target and measure advertising.
In the event that content shown on Facebook or our other products is subject to censorship, access to our products is restricted, in whole or in part, in one or more countries, we are required to or elect to make changes to our operations, or other restrictions are imposed on our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face other restrictions, our ability to retain or increase our user base, user engagement, or the level of advertising by marketers may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected. 37 Table of Contents Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data use, data combination, data protection, content, competition, youth, safety, consumer protection, advertising, e-commerce, and other matters.
In the event that content shown on Facebook or our other products is subject to censorship, access to our products is restricted, in whole or in part, in one or more countries, we are required to or elect to make changes to our operations, or other restrictions are imposed on our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face other restrictions, our ability to retain or increase our user base, user engagement, or the level of advertising by marketers may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected. 36 Table of Contents Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data use, data combination, data protection, content, AI, competition, youth, safety, consumer protection, advertising, e-commerce, and other matters.
We have experienced unfavorable outcomes in such disputes and litigation in the past, and our business, financial condition, and results of operations could be adversely affected as a result of an unfavorable resolution of the disputes and litigation referred to above.
We have experienced unfavorable outcomes in such disputes and litigation in the past, and our business, financial condition, and results of operations could be materially and adversely affected as a result of an unfavorable resolution of the disputes and litigation referred to above.
We expect to continue to make significant investments in virtual, augmented, and mixed reality and other technologies to support these efforts, and our ability to support these efforts is dependent on generating sufficient profits from other areas of our business.
We expect to continue to make significant investments in virtual and augmented reality and other technologies to support these efforts, and our ability to support these efforts is dependent on generating sufficient profits from other areas of our business.
In addition, if we believe an individual person has one or more violating accounts, we do not include such person in our violating accounts estimation as long as we believe they have one account that does not constitute a violating account.
In addition, if we believe an individual person has one or more violating accounts, we do not include such person in our violating accounts estimation as long as we believe they have one active account that does not constitute a violating account.
In addition, we have relatively limited experience with consumer hardware products and virtual, augmented, and mixed reality technology, which may enable other companies to compete more effectively than us.
In addition, we have relatively limited experience with consumer hardware products and virtual and augmented reality technology, which may enable other companies to compete more effectively than us.
We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, including privacy, data use, data combination, data protection and personal information, the provision of our services to younger users, biometrics, encryption, rights of publicity, content, integrity, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, AI and machine learning, electronic contracts and other communications, competition, protection of minors, consumer protection, civil rights, accessibility, telecommunications, product liability, e-commerce, taxation, economic or other trade controls including sanctions, anti-corruption and political law compliance, securities law compliance, and online payment services.
We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, including privacy, data use, data combination, data protection and personal information, the provision of our services to younger users, biometrics, encryption, rights of publicity, content, integrity, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, AI and machine learning, electronic contracts and other communications, competition, protection of minors, consumer protection, civil rights, accessibility, telecommunications, product liability, medical devices, e-commerce, taxation, economic or other trade controls including sanctions, export controls, anti-corruption and political law compliance, securities law compliance, and online payment services.
As such, we cannot guarantee that third parties will not use such AI technologies for improper purposes, including through the dissemination of illegal, inaccurate, defamatory or harmful content, intellectual property infringement or misappropriation, furthering bias or discrimination, cybersecurity attacks including spear phishing attacks, data privacy violations, other activities that threaten people's safety or well-being on- or offline, or to develop competing technologies.
As such, we cannot guarantee that third parties will not use such AI technologies for improper purposes, including through the dissemination of illegal, inaccurate, defamatory or harmful content, intellectual property infringement or misappropriation, furthering bias or discrimination, cybersecurity attacks including spear phishing attacks, data privacy violations, other societal harms, including activities that threaten people's safety or well-being on- or offline, or to develop competing technologies.
Any of the foregoing delays or disruptions, including actions by governments or geopolitical events such as international conflicts, could result in tariffs, sanctions, export or import controls, and other measures that restrict international trade, could reduce or eliminate the ability of our suppliers, manufacturers, or other third-party providers to continue their operations to manufacture, or limit or eliminate our ability to purchase, key components of our technical infrastructure.
Any of the foregoing delays or disruptions, including actions by governments or geopolitical events such as international conflicts, tariffs, sanctions, export or import controls, and other measures that restrict international trade, could reduce or eliminate the ability of our suppliers, manufacturers, or other third-party providers to continue their operations to manufacture, or limit or eliminate our ability to purchase, key components of our technical infrastructure.
Changes, bugs, or technical issues in such systems, or changes in our relationships with mobile operating system partners, handset manufacturers, browser developers, or mobile carriers, or in the content or application of their terms of service or policies (which they have made in the past and continue to seek to implement) that degrade our products' functionality, reduce or eliminate our ability to update or distribute our products, give preferential treatment to 19 Table of Contents competitive products, limit our ability to deliver, target, or measure the effectiveness of ads, or charge fees related to the distribution of our products or our delivery of ads have adversely affected, and could in the future adversely affect, the usage of our products and monetization on mobile devices.
Changes, bugs, or technical issues in such systems, or changes in our relationships with mobile operating system partners, handset manufacturers, browser developers, or mobile carriers, or in the content or application of their terms of service or policies (which they have made in the past and continue to seek to implement) that degrade our products' functionality, reduce or eliminate our ability to update or distribute our products, give preferential treatment to competitive products, limit our ability to deliver, target, or measure the effectiveness of ads, or charge fees related to the distribution of our products or our delivery of ads have adversely affected, and could in the future adversely affect, the usage of our products and monetization on mobile devices.
Further, our ability to continue to develop and effectively deploy AI technologies is dependent on access to specific third-party equipment and other technical and physical infrastructure, such as processing hardware, network capacity, computing power, and related energy requirements, as to which we cannot control the availability or pricing, especially in a highly competitive environment.
Further, our ability to continue to develop and effectively deploy AI technologies is dependent on access to specific third-party equipment, technology, and other technical and physical infrastructure, such as processing hardware, network capacity, models, computing power, and related energy requirements, as to which we cannot control the availability or pricing, especially in a highly competitive environment.
Our brands may also be negatively affected by the actions of users that are deemed to be hostile or inappropriate to other users, by the actions of users acting under false or inauthentic identities, by the use of our products or services to disseminate information that is deemed to be misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related purposes or to censor certain content on our platform, by the use of our products or services for illicit or objectionable ends, including, for example, any such actions around geopolitical events or elections in the United States and around the world, by decisions or recommendations regarding content on our platform from the independent Oversight Board, by research or media reports concerning the perceived or actual impacts of our products or services on user well-being, by our decisions regarding whether to remove content or suspend participation on our platform by persons who violate our community standards or terms of service, or by any negative sentiment associated with our management.
Our brands may also be negatively affected by the actions of users that are deemed to be hostile or inappropriate to other users, by the actions of users acting under false or inauthentic identities, by the use of our products or services to disseminate information that is deemed to be misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related purposes or to censor certain content on our platform, by the use of our products or services for illicit or objectionable ends, including, for example, any such actions around geopolitical events or elections in the United States and around the world, by decisions or recommendations regarding content on our platform from the independent Oversight Board, by research or media reports concerning the perceived or actual impacts of our products or services on user well-being, by our decisions regarding whether to enforce against content or suspend or disable participation on our platform by persons who violate our community standards or terms of service, or by any negative sentiment associated with our management.
The loss of other key personnel, including members of management as well as key engineering, product development, marketing, and sales personnel, could also disrupt our operations and have an adverse effect on our business. In addition, we cannot guarantee we will continue to attract and retain the personnel we need to maintain our competitive position.
The loss of other key personnel, including members of management as well as key engineering, product development, science, research, marketing, and sales personnel, could also disrupt our operations and have an adverse effect on our business. In addition, we cannot guarantee we will continue to attract and retain the personnel we need to maintain our competitive position.
The specific timing and amount of any share repurchases, and the specific timing and amount of any 36 Table of Contents dividend payments, will depend on prevailing share prices, general economic and market conditions, company performance, and other considerations. We cannot guarantee that the repurchase program will be fully consummated or that it will enhance long-term stockholder value.
The specific timing and amount of any share repurchases, and the specific timing and amount of any 35 Table of Contents dividend payments, will depend on prevailing share prices, general economic and market conditions, company performance, and other considerations. We cannot guarantee that the repurchase program will be fully consummated or that it will enhance long-term stockholder value.
DPF or regulators, courts, or legislative bodies determining that the legal bases we rely upon to transfer user data from the European Union to the United States are invalid; • there is decreased engagement with our products, decreased efficiency of our advertising products, or failure to accept our terms of service, as part of changes that we have implemented or may implement in the future, whether voluntarily, in connection with the GDPR, the European Union's ePrivacy Directive, the DMA, the DSA, the DMCC, U.S. state privacy laws including the California Consumer Privacy Act, as amended by the California Privacy Rights Act (CCPA), youth social media laws, or other laws, regulations, or regulatory actions, or otherwise; • technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as security breaches or failure to prevent or limit spam or otherwise objectionable content, or users feel their experience is diminished as a result of our efforts to protect the security and integrity of our platform; • we adopt terms, policies, or procedures related to areas such as sharing, content, user data, or advertising, or we take, or fail to take, actions to enforce our policies, that result in our removal of users from our platform or are perceived negatively by our users or the general public, including as a result of decisions or recommendations from the independent Oversight Board regarding content on our platform; • we elect to focus our product decisions on longer-term initiatives that do not prioritize near-term user growth and engagement (for example, we have announced plans to focus product decisions on optimizing the young adult experience in the long term); • we make changes in our user account login or registration processes or changes in how we promote different products and services across our family of products; • initiatives designed to attract and retain users and engagement, including the use of evolving technologies such as generative artificial intelligence, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, or other third parties, or otherwise; • third-party initiatives that may enable greater use of our products, including low-cost or discounted data plans, are scaled back or discontinued, or the pricing of data plans otherwise increases; • there is decreased engagement with our products as a result of taxes imposed on the use of social media or other mobile applications in certain countries, internet shutdowns, or other actions by governments that affect the accessibility of our products in their countries (for example, beginning in the first quarter of 2022, our user growth and engagement were adversely affected by the war in Ukraine and service restrictions imposed by the Russian government); • we fail to provide adequate customer service to users, marketers, developers, or other partners; 16 Table of Contents • we, developers whose products are integrated with our products, or other partners and companies in our industry are the subject of adverse media reports or other negative publicity, including as a result of our or their user data practices; or • our current or future products, such as our development tools and application programming interfaces that enable developers to build, grow, and monetize applications, reduce user activity on our products by making it easier for our users to interact and share on third-party applications.
DPF or regulators, courts, or legislative bodies determining that the legal bases we rely upon to transfer user data from the European Union to the United States are invalid; • there is decreased engagement with our products, decreased efficiency of our advertising products, or failure to accept our terms of service, as part of changes that we have implemented or may implement in the future, whether voluntarily, in connection with the GDPR, the European Union's ePrivacy Directive, the DMA, the DSA, the DMCC, U.S. state privacy laws, youth social media laws, or other laws, regulations, or regulatory actions, or otherwise; • technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as security breaches or failure to prevent or limit spam or otherwise objectionable content, or users feel their experience is diminished as a result of our efforts to protect the security and integrity of our platform; • we adopt terms, policies, or procedures related to areas such as sharing, content, user data, or advertising, or we take, or fail to take, actions to enforce our policies, that result in our removal of users from our platform or are perceived negatively by our users or the general public, including as a result of decisions or recommendations from the independent Oversight Board regarding content on our platform; • we elect to focus our product decisions on longer-term initiatives that do not prioritize near-term user growth and engagement (for example, we have announced plans to focus product decisions on optimizing the young adult experience in the long term); • we make changes in our user account login or registration processes or changes in how we promote different products and services across our family of products; • initiatives designed to attract and retain users and engagement, including the use of evolving technologies such as artificial intelligence, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, or other third parties, or otherwise; • third-party initiatives that may enable greater use of our products, including low-cost or discounted data plans, are scaled back or discontinued, or the pricing of data plans otherwise increases; • there is decreased engagement with our products as a result of taxes imposed on the use of social media or other mobile applications in certain countries, internet shutdowns, or other actions by governments that affect the accessibility of our products in their countries (for example, beginning in 2022, our user growth and engagement were adversely affected by the war in Ukraine and service restrictions imposed by the Russian government); • we fail to provide adequate customer service to users, marketers, developers, or other partners; 14 Table of Contents • we, developers whose products are integrated with our products, or other partners and companies in our industry are the subject of adverse media reports or other negative publicity, including as a result of our or their user data practices; or • our current or future products, such as our development tools and application programming interfaces that enable developers to build, grow, and monetize applications, reduce user activity on our products by making it easier for our users to interact and share on third-party applications.
For example, data protection, competition, content, and consumer protection authorities in the European Union, United States, and other jurisdictions have initiated actions, 40 Table of Contents investigations, or administrative orders seeking to restrict the ways in which we collect and use information, or impose sanctions, and other authorities may do the same.
For example, data protection, competition, content, and consumer protection authorities in the European Union, United States, and other jurisdictions have initiated actions, investigations, or administrative orders seeking to restrict the ways in which we collect and use information, or impose sanctions, and other 39 Table of Contents authorities may do the same.
The potential risks relating to any of the foregoing types of claims are currently enhanced in certain jurisdictions outside the United States where our protection from liability for third-party actions may be unclear or where we may be less 42 Table of Contents protected under local laws than we are in the United States.
The potential risks relating to any of the foregoing types of claims are currently enhanced in certain jurisdictions outside the United States where our protection from liability for third-party actions may be unclear or where we may be less 41 Table of Contents protected under local laws than we are in the United States.
Although the CJEU upheld the validity of SCCs in July 2020, on May 12, 2023, the IDPC issued a Final Decision concluding that Meta Platforms Ireland’s reliance on SCCs in respect of certain transfers of European Economic Area (EEA) Facebook user data was not in compliance with the GDPR.
Although the CJEU upheld the validity of SCCs in 2020, in May 2023, the IDPC issued a Final Decision concluding that Meta Platforms Ireland’s reliance on SCCs in respect of certain transfers of European Economic Area (EEA) Facebook user data was not in compliance with the GDPR.
Although we have developed systems and processes that are designed to protect our data and user data, to reduce the risk of data loss or misuse, to disable undesirable accounts and activities on our platform, and to reduce the risk of or detect security breaches, such measures will not provide absolute security, and we cannot assure you that we will be able to react in a timely manner to any cyber-attacks or other security incidents, or that our remediation efforts will be successful.
Although we have developed systems and processes that are designed to protect our data and user data, to reduce the risk of data loss or misuse, to disable undesirable accounts and activities on our platform, and to reduce the risk of or detect security breaches, such measures will not provide absolute security, and we cannot assure you that we will be able to react in a timely manner to any cyber-attacks or other security incidents, or that our remediation 43 Table of Contents efforts will be successful.
For example, we continue to launch new AI features on our products, including support for new modalities, conversational AIs, stickers and photos, and editing tools. We continue to incur substantial costs, and we may not be successful in generating profits, in connection with these efforts.
For example, we continue to launch new AI features on our products, including support for new modalities, conversational AIs, AI profiles, stickers, photos, videos, and editing tools. We continue to incur substantial costs, and we may not be successful in generating profits, in connection with these efforts.
Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows. The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change.
The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws or tax rulings, or changes in interpretations of existing laws, could materially affect our financial position, results of operations, and cash flows.
For example, legislative and regulatory developments, such as the GDPR, ePrivacy Directive, DMA, and U.S. state privacy laws, including the CCPA, have impacted, and we expect will continue to impact, our ability to use such signals in our ad products.
For example, legislative and regulatory developments, such as the GDPR, ePrivacy Directive, DMA, and U.S. state privacy laws, have impacted, and we expect will continue to impact, our ability to use such signals in our ad products.
Any loss of access to data signals we use in our process for calculating Family metrics, whether as a result of our own product decisions, actions by third-party browser or mobile platforms, regulatory or legislative requirements, or other factors, also may impact the stability or accuracy of our reported Family metrics, as well as our ability to report these metrics at all.
Any loss of access to data signals we use in our process for calculating Family metrics, whether as a result of our own product decisions, actions by third-party 28 Table of Contents browser or mobile platforms, regulatory or legislative requirements, or other factors, also may impact the stability or accuracy of our reported Family metrics, as well as our ability to report these metrics at all.
Although we disagree with the IRS's position and are litigating this issue, the ultimate resolution is uncertain and, if resolved in a manner unfavorable to us, may adversely affect our financial results.
Although we disagree with the IRS' position and are litigating this issue, the ultimate resolution is uncertain and, if resolved in a manner unfavorable to us, may adversely affect our financial results.
In response to these developments, in November 2024, we began offering users in the European Union, European Economic Area, and Switzerland who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads, which are expected to be less relevant and effective than our premium ad offerings.
In response to these developments, in November 2024, we began offering users in the European Union, European Economic Area, and Switzerland who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads (LPA), which are less relevant and effective than our premium ad offerings.
Further, much of our technical infrastructure is located outside the United States, and action by a foreign government, or our response to such government action, has resulted, and may result in the future, in the impairment of a portion of our technical infrastructure, which may interrupt the delivery or degrade the quality or reliability of our products and lead to a negative user experience or increase our costs.
Further, much of our technical infrastructure is located 27 Table of Contents outside the United States, and action by a foreign government, or our response to such government action, has resulted, and may result in the future, in the impairment of a portion of our technical infrastructure, which may interrupt the delivery or degrade the quality or reliability of our products and lead to a negative user experience or increase our costs.
In response to these developments, in November 2024, we began offering users in the European Union, European Economic Area, and Switzerland who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads, which are expected to be less relevant and effective than our premium ad offerings.
In response to these developments, in November 2024, we began offering users in the European Union, European Economic Area, and Switzerland who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads (LPA), which are less relevant and effective than our premium ad offerings.
For example, the DMA in the European Union imposes restrictions and requirements on 39 Table of Contents companies like ours, including in areas such as the combination of data across services, mergers and acquisitions, and product design. The DMA also includes significant penalties for non-compliance, and its key requirements are enforceable against designated gatekeeper companies as of March 2024.
For example, the DMA in the European Union imposes restrictions and requirements on companies like ours, including in areas such as the combination of data across services, mergers and acquisitions, and product design. The DMA also includes significant penalties for non-compliance, and its key requirements are enforceable against designated gatekeeper companies as of March 2024.
In addition, some of our developers or other partners, such as those that help us measure the effectiveness of ads, may receive or store information provided by us or by our users through mobile or web applications integrated with our products. 44 Table of Contents We provide limited information to such third parties based on the scope of services provided to us.
In addition, some of our developers or other partners, such as those that help us measure the effectiveness of ads, may receive or store information provided by us or by our users through mobile or web applications integrated with our products. We provide limited information to such third parties based on the scope of services provided to us.
Similarly, 21 Table of Contents from time to time we update our Feed display and ranking algorithms or other product features to improve the user experience, and these changes have had, and may in the future have, the effect of reducing time spent and some measures of user engagement with our products, which could adversely affect our financial results.
Similarly, from time to time we update our Feed display and ranking algorithms or other product features to improve the user experience, and these changes have had, and may in the future have, the effect of reducing time spent and some measures of user engagement with our products, which could adversely affect our financial results.
For example, our AI-related efforts, particularly those related to generative AI, subject us to risks related to harmful or illegal content, accuracy, misinformation and deepfakes (including related to elections), bias, discrimination, toxicity, consumer protection, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, and sanctions and export controls, among others.
For example, our AI-related efforts, particularly those related to generative AI and superintelligence, subject us to risks related to harmful or illegal content, accuracy, misinformation and deepfakes (including related to elections), bias, discrimination, toxicity, consumer protection, products liability, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, and sanctions and export controls, among others.
We have previously undertaken cost reduction measures in light of a more challenging operating environment, which may adversely affect these or other business initiatives, and some of these measures have involved, and may in the future involve, up-front charges and outlays of cash to reduce certain longer- 27 Table of Contents term expenses.
We have previously undertaken cost reduction measures in light of a more challenging operating environment, which may adversely affect these or other business initiatives, and some of these measures have involved, and may in the future involve, up-front charges and outlays of cash to reduce certain longer-term expenses.
We are engaged in ongoing privacy compliance and oversight efforts, including in connection with our modified consent order with the FTC, requirements of the GDPR, and other current and anticipated regulatory and legislative 41 Table of Contents requirements around the world, such as U.S. state privacy laws, youth social media laws, the ePrivacy Directive, DMA, DSA, EU AI Act, the Korean Personal Information Protection Act, and the Indian Digital Personal Data Protection Act.
We are engaged in ongoing privacy compliance and oversight efforts, including in connection with our modified consent order with the FTC, requirements of the GDPR and UK GDPR, and other current and anticipated regulatory and legislative requirements around the world, such as U.S. state privacy laws, youth social media laws, the ePrivacy Directive, 40 Table of Contents DMA, DSA, OSA, EU AI Act, the Korean Personal Information Protection Act, and the Indian Digital Personal Data Protection Act.
If our investments are not successful longer-term, our business and financial performance could be harmed. 20 Table of Contents There are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
If our investments are not successful longer-term, our business and financial performance could be harmed. There are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
It is not possible to predict all of the risks related to the use of AI and changes in laws, rules, directives, and regulations or other regulatory developments regarding the use of AI, including restrictions around the collection and use of data, may adversely affect our ability to develop and use AI or subject us to legal liability.
It is not possible to predict all of the risks related to the use of AI and changes in laws, rules, directives, and regulations or other regulatory developments regarding the use of AI, including restrictions around the collection and use of 19 Table of Contents data, may adversely affect our ability to develop and use AI or subject us to legal liability.
Certain countries have also implemented or proposed legislation that may require us to pay publishers for certain news content shared on our products. For example, as a result of such legislation in Canada, we have ended the availability of news content for Canadian users on Facebook and Instagram.
Certain countries and U.S. states have also implemented or proposed legislation that may require us to pay publishers for certain news content shared on our products. For example, as a result of such legislation in Canada, we have ended the availability of news content for Canadian users on Facebook and Instagram.
Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price. Delaware law and provisions in our certificate of incorporation and bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our Class A common stock.
Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price. 47 Table of Contents Delaware law and provisions in our certificate of incorporation and bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our Class A common stock.
We will also continue to experience media, legislative, or regulatory scrutiny of our actions or decisions regarding user privacy, data use, encryption, content, product design, algorithms, advertising, competition, generative AI, younger users, and other issues, including actions or decisions in connection with elections or geopolitical events, which has adversely affected, and 22 Table of Contents may in the future adversely affect, our reputation and brands.
We will also continue to experience media, legislative, or regulatory scrutiny of our actions or decisions regarding user privacy, data use, encryption, content, product design, algorithms, advertising, competition, generative AI, superintelligence, younger users, and other issues, including actions or decisions in connection with elections or geopolitical events, which has adversely affected, and may in the future adversely affect, our reputation and brands.
We face significant competition in every aspect of our business, including, but not limited to, companies that facilitate the ability of users to create, share, communicate, and discover content 23 Table of Contents and information online or enable marketers to reach their existing or prospective audiences.
We face significant competition in every aspect of our business, including, but not limited to, companies that facilitate the ability of users to create, share, communicate, and discover content and information online or enable marketers to reach their existing or prospective audiences.
At our scale, it is very difficult to attribute multiple user accounts within and across products to individual people, and it is possible that the actual numbers of unique people using our products may vary 29 Table of Contents significantly from our estimates, potentially beyond our estimated error margins.
At our scale, it is very difficult to attribute multiple user accounts within and across products to individual people, and it is possible that the actual numbers of unique people using our products may vary significantly from our estimates, potentially beyond our estimated error margins.
For example, several U.S. states, including Arkansas, Utah, Texas, California, and Florida, among others, have passed laws restricting our ability to offer services to minors without parental consent or otherwise limiting the services that we can provide to minors.
For example, several U.S. states, including Arkansas, California, Colorado, Florida, New York, Texas, and Utah, among others, have passed laws restricting our ability to offer services to minors without parental consent or otherwise limiting the services that we can provide to minors.
If any supplier or business partner violates laws, fails to implement changes in accordance with newly enacted laws, or implements practices or standards regarded as unethical, corrupt, or non-compliant, we could experience supply chain disruptions, government action or fines, canceled orders, or damage to our reputation. 32 Table of Contents We face inventory risk with respect to our consumer hardware products.
If any supplier or business partner violates laws, fails to implement changes in accordance with newly enacted laws, or implements practices or standards regarded as unethical, corrupt, or non-compliant, we could experience supply chain disruptions, government action or fines, canceled orders, or damage to our reputation. We face inventory risk with respect to our consumer hardware products.
In addition, in connection with the war in Ukraine in the first quarter of 2022, access to Facebook and Instagram was restricted in Russia and the services were then prohibited by the Russian government, which has adversely affected, and will likely continue to adversely affect, our revenue and business in the region.
In addition, in connection with the war in Ukraine in 2022, access to Facebook and Instagram was restricted in Russia and the services were then prohibited by the Russian government, which has adversely affected, and will likely continue to adversely affect, our revenue and business in the region.
Depending on how our Payments products evolve, we may also be subject to other laws and regulations including those governing gambling, banking, and lending. In some jurisdictions, the application or interpretation of these laws and regulations is not clear.
Depending on how our Payments products evolve, we may also be subject to other laws and regulations including those 42 Table of Contents governing gambling, banking, and lending. In some jurisdictions, the application or interpretation of these laws and regulations is not clear.
In addition, in connection with the war in Ukraine, access to Facebook and Instagram was restricted in Russia and these services were then prohibited by the Russian government, which contributed to slight decreases in the size of our active user base following the onset of the war.
For example, in connection with the war in Ukraine, access to Facebook and Instagram was restricted in Russia and these services were then prohibited by the Russian government, which contributed to slight decreases in the size of our active user base following the onset of the war.
For example, from time to time, we have taken actions to reduce the volume of communications from these developers to users on our products with the objective of enhancing the user experience, and such actions have reduced distribution from, user engagement with, and our monetization opportunities from, applications integrated with our products.
For 21 Table of Contents example, from time to time, we have taken actions to reduce the volume of communications from these developers to users on our products with the objective of enhancing the user experience, and such actions have reduced distribution from, user engagement with, and our monetization opportunities from, applications integrated with our products.
The infrastructure expansion we are undertaking is complex and involves projects in multiple locations around the world, including in developing regions that expose us to increased risks relating to anti-corruption compliance, trade compliance, and political challenges, among others.
The infrastructure expansion we are undertaking is complex and involves projects in multiple locations around the world, including in developing regions that expose us to increased risks relating to anti-corruption compliance, trade compliance, environmental, health, and safety compliance, and political challenges, among others.
Where marketers, developers, or investors do not perceive our metrics or estimates to be accurate, or where we discover material 30 Table of Contents inaccuracies in our metrics or estimates, we may be subject to liability, our reputation may be harmed, and marketers and developers may be less willing to allocate their budgets or resources to our products that deliver ad impressions, which could negatively affect our business and financial results.
Where marketers, developers, or investors do not perceive our metrics or estimates to be accurate, or where we discover material inaccuracies in our metrics or estimates, we may be subject to liability, our reputation may be harmed, and marketers and developers may be less willing to allocate their budgets or resources to our products that deliver ad impressions, which could negatively affect our business and financial results.
We are also the subject of multiple lawsuits related to our alleged use of biometric technology, our alleged recommendation of and/or failure to remove harmful content, information from third-party websites or apps via our business tools, our alleged use of copyright-protected content to train our AI models, and allegations that Facebook and Instagram cause "social media addiction" in users and allegations of violations of the Children's Online Privacy Protection Act (COPPA).
We are also the subject of multiple lawsuits related to our alleged use of biometric technology, our alleged recommendation of and/or failure to remove harmful content, information from third-party websites or apps via our business tools, our alleged use of copyright-protected content, or data that we allegedly improperly scraped or acquired, to train our AI models, and allegations that Facebook and Instagram cause "social media addiction" in users and allegations of violations of the Children's Online Privacy Protection Act (COPPA).
Additionally, developers may choose to build on other platforms, including platforms controlled by third parties, rather than building products that integrate with our products.
Developers may also choose to build on other platforms, including platforms controlled by third parties, rather than building products that integrate with our products.
If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow effectively. Our CEO has control over key decision making as a result of his control of a majority of the voting power of our outstanding capital stock.
If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow effectively or otherwise achieve our business objectives. Our CEO has control over key decision making as a result of his control of a majority of the voting power of our outstanding capital stock.
Our business and operations span numerous geographies around the world and involve thousands of employees, contractors, vendors, developers, partners, and other third parties. At any given time, we face known and unknown cybersecurity risks and threats that are not fully mitigated, and we discover vulnerabilities in our security efforts.
Our business and operations span numerous geographies around the world and involve thousands of employees, contractors, vendors, developers, partners, and other third parties, including AI and cloud services. At any given time, we face known and unknown cybersecurity risks and threats that are not fully mitigated, and we discover vulnerabilities in our security efforts.
To effectively manage our scale, we must maintain, and continue to adapt, our operational, financial, and management processes and systems, manage our headcount and facilities, and effectively train and manage our personnel. Many of our personnel work remotely, which may lead to challenges in productivity and collaboration.
To effectively manage our scale, we must maintain, and continue to adapt, our operational, financial, and 29 Table of Contents management processes and systems, manage our headcount and facilities, and effectively train and manage our personnel. Many of our personnel work remotely, which may lead to challenges in productivity and collaboration.
We may not be successful in our Reality Labs strategy and investments, which could adversely affect our business, reputation, or financial results. Our Reality Labs efforts include our metaverse and wearables initiatives. We believe the metaverse, an embodied internet where people have immersive experiences beyond two-dimensional screens, is the next evolution in social technology.
We may not be successful in our Reality Labs strategy and investments, which could adversely affect our business, reputation, or financial results. We believe the metaverse, an embodied internet where people have immersive experiences beyond two-dimensional screens, is the next evolution in social technology.
Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data, including personal information, content, or payment information from users, or information from marketers, could result in the loss, modification, disclosure, destruction, or other misuse of such data, which could harm our business and reputation and diminish our competitive position.
Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data, including personal information, content, or payment information from users, information from marketers, and other intellectual property or content on our systems, could result in the loss, modification, disclosure, destruction, or other misuse of such data, which could harm our business and reputation and diminish our competitive position.
Errors, bugs, vulnerabilities, design defects, or technical limitations within 45 Table of Contents the software and hardware on which we rely, or human error or malfeasance in using such systems, have led to, and may in the future lead to, outcomes including a negative experience or other adverse effects for users and marketers who use our products, compromised ability of our products to perform in a manner consistent with our terms, contracts, or policies, delayed product introductions or enhancements, targeting, measurement, or billing errors, compromised ability to protect the data of our users and/or our intellectual property or other data, or reductions in our ability to provide some or all of our services.
Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which we rely, or human error or malfeasance in using such systems, have led to, and may in the future lead to, outcomes including a negative experience or other adverse effects for users and marketers who use our products, compromised ability of our products to perform in a manner consistent with our terms, contracts, or policies, delayed product introductions or enhancements, targeting, measurement, or billing errors, compromised ability to protect the data of our users and/or our intellectual property or other data or to address violating activity on our platform, or reductions in our ability to provide some or all of our services.
Additional unanticipated delays or disruptions in the completion of these projects, including due to the availability of components, power or network capacity, or any shortage of labor necessary in building portions of such projects, challenges in obtaining required government or regulatory approvals, or other geopolitical challenges or actions by governments, whether as a result of trade disputes or otherwise, may lead to increased project costs, operational inefficiencies, interruptions in the delivery or degradation of the quality or reliability of our products and services, or impairment of assets on our balance sheet.
Additional unanticipated delays or disruptions in the completion of these projects, including due to the availability of components, power or network capacity, or any shortage of labor necessary in building portions of such projects, challenges in obtaining required government or regulatory approvals, or other geopolitical challenges or actions by governments, including trade disputes or other developments, may lead to increased project costs, operational inefficiencies, interruptions in the delivery or degradation of the quality or reliability of our products and services, or impairment of assets on our balance sheet.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+2 added−2 removed9 unchanged
Biggest changeIn addition, we maintain a privacy risk management program to assess privacy risks related to how we are collecting, using, sharing, and storing user data, which is subject to assessment by an independent, third-party privacy assessor. Our internal audit function provides independent assessment and assurance on the overall operations of our cybersecurity and privacy programs and the supporting control frameworks.
Biggest changeHowever, we may not be successful in fully addressing any such areas for remediation or enhancement. In addition, we maintain a privacy risk management program to assess privacy risks related to how we are collecting, using, sharing, and storing user data, which is subject to assessment by an independent, third-party privacy assessor.
Our board of directors has oversight of our strategic and business risk management and has delegated cybersecurity risk management oversight to the audit & risk oversight committee of our board of directors (Audit & Risk Oversight Committee).
Our board of directors has oversight of our strategic and business risk management and has delegated cybersecurity risk management oversight to the Audit & Privacy Committee of our board of directors (Audit & Privacy Committee).
Management is responsible for identifying, assessing, and managing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures, maintaining cybersecurity policies and procedures, and providing regular reports to our board of directors, including through the Audit & Risk Oversight Committee and Privacy & Product Compliance Committee.
Management is responsible for identifying, assessing, and managing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures, maintaining cybersecurity policies and procedures, and providing regular reports to our board of directors, including through the Audit & Privacy Committee.
Our Audit & Risk Oversight Committee is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks to which the company is exposed and to implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Our Audit & Privacy Committee is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks to which the company is exposed and to implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Our Chief Information Security Officer (CISO), Guy Rosen, leads our cybersecurity program and oversees teams across the company supporting our security functions of identify, prevent, detect, respond, and recover. These teams are comprised of personnel with a broad range of experience across the private and public sectors, the technology industry, and different geographic regions. Mr.
Our Chief Information Security Officer (CISO), Guy Rosen, leads our cybersecurity program and oversees teams across the company supporting core security capabilities. These teams are comprised of personnel with a broad range of experience across the private and public sectors, the technology industry, and different geographic regions. Mr.
The privacy & product compliance committee of our board of directors (Privacy & Product Compliance Committee) oversees risks related to privacy and data use, including overseeing compliance with our comprehensive privacy program.
In addition, the Audit & Privacy Committee oversees risks related to privacy and data use, including overseeing compliance with our comprehensive privacy program.
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. We maintain an information security program that is comprised of policies and controls designed to mitigate cybersecurity risk.
In addition, our business and operations span numerous geographies around the world, involve thousands of employees, contractors, vendors, developers, 48 Table of Contents partners, and other third parties, and rely on software and hardware that is highly technical and complex.
In addition, we maintain specific policies and practices governing our third-party security risks, including our third-party assessment (TPA) process.
Our risk mitigation strategies include a broad variety of technical and operational measures, as well as annual cybersecurity and privacy training for all of our employees. In addition, we maintain specific policies and practices governing our third-party security risks, including our third-party assessment (TPA) process.
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. However, we may not be successful in fully addressing such areas for remediation or enhancement.
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. In addition, we operate a Bug Bounty program that invites independent cybersecurity researchers to investigate and explore potential security vulnerabilities in our products and report their findings to us.
Our CISO is part of the senior management team at the company and regularly updates the Audit & Risk Oversight Committee on the company’s cybersecurity program, including cybersecurity risks, incidents, and mitigation strategies.
Our CISO is part of the senior management team at the company and regularly updates the Audit & Privacy Committee on our cybersecurity program, including cybersecurity risks, incidents, and mitigation strategies. In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
For additional information about these risks, see Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K.
However, despite our efforts, we cannot 49 Table of Contents eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents. For additional information about these risks, see Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K. 50 Table of Contents
Removed
These processes 49 Table of Contents support informed risk-based decision-making and prioritization of cybersecurity countermeasures and risk mitigation strategies. Our risk mitigation strategies include a broad variety of technical and operational measures, as well as annual cybersecurity and privacy training for all of our employees.
Added
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.
Removed
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents.
Added
Our internal audit function provides independent assessment and assurance on the overall operations of our cybersecurity and privacy programs and the supporting control frameworks. These processes support informed risk-based decision-making and prioritization of cybersecurity countermeasures and risk mitigation strategies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, we owned and leased approximately 11 million square feet of office and building space for our corporate headquarters and in the surrounding areas, which included approximately two million square feet of unoccupied office and building space that we plan to either sublease, early terminate, or abandon related to our facilities consolidation restructuring efforts.
Biggest changeAs of December 31, 2025, we owned and leased approximately 10 million square feet of office and building space for our corporate headquarters and in the surrounding areas, which included approximately two million square feet of unoccupied office and building space that we plan to either sublease, early terminate, or abandon.
We also owned and leased approximately 62 acres of land to be developed to accommodate anticipated future growth. In addition, we have offices in more than 90 cities across North America, Europe, the Middle East, Africa, Asia-Pacific, and Latin America. We own 27 data center locations globally and we also lease some data centers at selected locations.
We also owned and leased approximately 62 acres of land to be developed to accommodate anticipated future growth. In addition, we have offices in more than 90 cities across North America, Europe, the Middle East, Africa, Asia-Pacific, and Latin America. We own 30 data center locations globally and we also lease some data centers at selected locations.
We believe that our facilities, which are used by both reportable segments, are adequate for our current needs. 50 Table of Contents
We believe that our facilities, which are used by both reportable segments, are adequate for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

41 edited+38 added−12 removed51 unchanged
Biggest changeOn December 22, 2022, the parties entered into a settlement agreement to resolve the lawsuit, which provides for a payment of $725 million by us. The settlement was approved by the court on October 10, 2023, and the payment was made in November 2023. Two objectors appealed final approval (one of which was voluntarily dismissed as of June 24, 2024).
Biggest changeDistrict Court for the Northern District of California ( In re Facebook, Inc., Consumer Privacy User Profile Litigation ). On December 22, 2022, the parties entered into a settlement agreement to resolve the lawsuit, which provided for a payment of $725 million by us and became final on May 14, 2025.
The state attorneys general inquiries and litigation and certain government inquiries in other jurisdictions remain ongoing and could subject us to additional substantial fines and costs, require us to change our business practices, divert resources and the attention of management from our business, or adversely affect our business.
Certain other state attorneys general inquiries and litigation and certain government inquiries in other jurisdictions remain ongoing and could subject us to additional substantial fines and costs, require us to change our business practices, divert resources and the attention of management from our business, or adversely affect our business.
Outside of the United States, we are subject to new regulatory regimes, including the Digital Services Act, Digital Markets Act, EU AI Act and similar statutes in non-EU countries such as the UK Digital Markets, Competition and Consumer Act, and new fining guidelines under existing regulatory regimes like the General Data Protection Regulation (GDPR).
Outside of the United States, we are subject to relatively new regulatory regimes, including the Digital Services Act, Digital Markets Act, EU AI Act and similar statutes in non-EU countries such as the UK Digital Markets, Competition and Consumer Act, and new fining guidelines under existing regulatory regimes like the General Data Protection Regulation (GDPR).
On January 10, 2025, the Commission issued a decision on certain threshold legal issues, including that the Commission has statutory authority to modify consent orders. The Commission stated that its decision is subject to Meta’s jurisdictional challenges currently pending before the U.S. Court of Appeals for the District of Columbia Circuit in U.S. v.
On January 10, 2025, the Commission issued a decision on certain threshold legal issues, including that the Commission has statutory authority to modify consent orders. The Commission stated that its decision is subject to Meta's jurisdictional challenges then pending before the U.S. Court of Appeals for the District of Columbia Circuit in U.S. v.
For example, we are facing numerous cases in the United States in which plaintiffs are attempting to avoid or limit the application of Section 230 of the Communications Decency Act to their claims and certain of those matters have survived motions to dismiss, including through the use of products liability theories.
For example, we are facing numerous cases in the United States in which plaintiffs are attempting to avoid or limit the application of Section 230 of the Communications Decency Act to their claims and certain of those matters have survived motions to dismiss, including through the use of products liability and/or breach of contract theories.
Putative class actions have been filed in the United States, Brazil, and Canada on behalf of users in those jurisdictions, and numerous school districts, municipalities, and tribal nations have filed public nuisance claims in the United States, Brazil, and/or Canada based on similar allegations. On October 6, 2022, the U.S. federal cases were centralized in the U.S.
Putative class actions have been filed in the United States, Brazil, Canada, Europe, and elsewhere on behalf of users in those jurisdictions, and numerous school districts, municipalities, and tribal nations have filed public nuisance claims in the United States, Brazil, and/or Canada based on similar allegations. On October 6, 2022, the U.S. federal cases were centralized in the U.S.
Court of Appeals for the District of Columbia Circuit ( U.S. v. Facebook, Inc. ) and sought to stay the FTC proceeding pending resolution of the appeal. Our motion for a stay pending appeal was denied in March 2024. The underlying appeal was then briefed and oral argument was held on November 5, 2024. The U.S.
Court of Appeals for the District of Columbia Circuit ( U.S. v. Facebook, Inc. ) and sought to stay the FTC proceeding pending resolution of the appeal. Our motion for a stay pending appeal was denied in March 2024. After the underlying appeal was briefed and oral argument was held on November 5, 2024, the U.S.
We also notify the Irish Data Protection Commission (IDPC), our lead European Union privacy regulator under the GDPR, of certain other personal data breaches and privacy issues, issue similar notifications to European regulators under 52 Table of Contents other laws (such as UK GDPR and Member State implementations of the ePrivacy Directive), and are subject to inquiries and investigations by the IDPC and other European regulators regarding various aspects of our regulatory compliance.
We also notify the Irish Data Protection Commission (IDPC), our lead European Union privacy regulator under the GDPR, of certain other personal data breaches and privacy issues, issue similar notifications to European regulators under other laws (such as UK GDPR and Member State implementations of the ePrivacy Directive), and are subject to inquiries and investigations by the IDPC and other European regulators regarding various aspects of our regulatory compliance.
FTC ), asserting constitutional challenges to the structure of the FTC, and seeking to preliminarily enjoin the FTC proceeding during the pendency of the litigation. On December 13, 2023, the FTC filed an opposition to our motion for preliminary injunction and a motion to dismiss the complaint.
FTC ), asserting constitutional challenges to the structure of the FTC, and seeking to preliminarily enjoin the FTC proceeding during the pendency of the litigation. On December 13, 2023, the FTC filed an opposition to our 52 Table of Contents motion for preliminary injunction and a motion to dismiss the complaint.
On May 31, 2023, we filed a motion before the U.S. District Court for the District of Columbia ( USA v. Facebook, Inc. ) seeking to enjoin the FTC from further pursuing its agency process to modify the modified consent order. On November 27, 2023, the district court denied our motion, and we then appealed to the U.S.
On May 31, 2023, we filed a motion before the U.S. District Court for the District of Columbia seeking to enjoin the FTC from further pursuing its agency process to modify the modified consent order. On November 27, 2023, the district court denied our motion, and we then appealed to the U.S.
While we have identified below certain matters that we believe to be material, there can be no assurance that additional material losses or limitations on our activities will not result from claims that have not yet been asserted or are not yet determined to be material.
While we have identified 51 Table of Contents below certain matters that we believe to be material, there can be no assurance that additional material losses or limitations on our activities will not result from claims that have not yet been asserted or are not yet determined to be material.
Any such inquiries or investigations (including the IDPC proceedings) could subject us to substantial fines and costs, require us to change our business practices, divert resources and the attention of management from our business, or adversely affect our business.
Any such inquiries or investigations (including the IDPC proceedings) could subject us to substantial fines and costs, require us to change our business practices, divert resources and the attention of management from our business, lead to additional claims from users, or adversely affect our business.
On November 18, 2024, the European Commission issued a decision that Meta infringed Article 102 on the Treaty of the Functioning of the European Union in relation to certain alleged business practices relating to Facebook Marketplace and imposed a fine of approximately EUR €798 million. We appealed the European Commission's decision on January 28, 2025.
On November 18, 2024, the European Commission issued a decision that Meta infringed Article 102 on the Treaty of the Functioning of the European Union in relation to certain alleged business practices relating to Facebook Marketplace and imposed a fine of approximately EUR €798 million.
We are also responding to regulatory inquiries and litigation related to allegedly deceptive advertising, including but not limited to financial scams, in other parts of the world.
We are also responding to regulatory inquiries and litigation related to allegedly deceptive advertising, including but not limited to financial scams and the use of our services to promote deceptive activity, in other parts of the world.
On April 5, 2024, we filed our motion for summary judgment and the FTC filed its opposition and its own motion for partial summary judgment on May 24, 2024. On November 13, 2024, the court granted in part and denied in part both our and the FTC’s motions for summary judgment. Trial is set to begin on April 14, 2025.
On April 5, 2024, we filed our motion for summary judgment and the FTC filed its opposition and its own motion for partial summary judgment on May 24, 2024. On November 13, 2024, the court granted in part and denied in part both our and the FTC's motions for summary judgment.
On October 14, 2024, plaintiffs filed their notice of appeal. 54 Table of Contents Youth-Related Actions Beginning in January 2022, we became subject to litigation and other proceedings that were filed in various federal and state courts alleging that Facebook and Instagram cause "social media addiction" in users, with most proceedings focused on those under 18 years old, resulting in various mental health and other harms.
On October 14, 2024, plaintiffs filed their notice of appeal and oral argument was held on January 6, 2026. 55 Table of Contents Youth-Related Actions Beginning in January 2022, we became subject to litigation and other proceedings that were filed in various federal and state courts in the United States as well as other jurisdictions alleging that Facebook and Instagram cause "social media addiction" in users, with most proceedings focused on those under 18 years old, resulting in various mental health and other harms.
We are also subject to government investigations and requests from multiple regulators in various jurisdictions globally concerning the use of our products and services, and the alleged mental and physical health and safety impacts on users, particularly younger users.
We are also subject to government investigations and requests from multiple regulators in various jurisdictions globally concerning the use of our products and services, and the alleged mental and physical health and safety and privacy impacts on users, particularly younger users, as well as the accuracy of our statements about youth and parental features.
Although we are not a party in these actions, the ultimate resolution of the lawsuits and similar others still pending in the federal courts could impact our business. 55 Table of Contents On April 30, 2024, the European Commission opened formal proceedings against us to assess Facebook and Instagram's compliance with certain requirements under Articles 14, 16, 17, 20, 24, 25, 34, 35, and 40 of the DSA, regarding a range of topics including elections, content reporting and appeals, third-party access to data, political content recommendations, potential deceptive advertising and disinformation, including the way in which we identified, assessed, and mitigated against certain systemic risks on Instagram and Facebook.
On April 30, 2024, the European Commission opened formal proceedings against us to assess Facebook and Instagram's compliance with certain requirements under Articles 14, 16, 17, 20, 24, 25, 34, 35, and 40 of the DSA, regarding a range of topics including elections, content reporting and appeals, third-party access to data, political content recommendations, potential deceptive advertising and disinformation, including the way in which we identified, assessed, and mitigated against certain systemic risks on Instagram and Facebook.
On June 1, 2023, the court presiding over the lawsuit filed by the District of Columbia granted our motion for summary judgment, resolving the case in our favor. On June 29, 2023, the District of Columbia filed a notice of appeal. The appeal is fully briefed and will be heard on January 30, 2025.
On June 1, 2023, the court presiding over the lawsuit filed by the District of Columbia granted our motion for summary judgment, resolving the case in our favor. On June 29, 2023, the District of Columbia filed a notice of appeal.
Several of the cases brought on behalf of certain advertisers and users in the United States were consolidated in the U.S. District Court for the Northern District of California ( Klein et al., v. Meta Platforms, Inc. ). On January 14, 2022, the court granted, in part, and denied, in part, our motion to dismiss the consolidated actions.
Several of the cases brought on behalf of certain advertisers and users in the United States were consolidated in the U.S. District Court for the Northern District of California ( Klein et al., v. Meta Platforms, Inc. ).
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, and we expect to be subject to additional legal proceedings and disputes in the future.
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, and we expect to be subject to additional legal proceedings and disputes in the future. Item 4. Mine Safety Disclosures Not applicable. 57 Table of Contents PART II
In March 2024, the European Commission opened an investigation into the compliance of our "subscription for no ads" consent model with requirements under Article 5(2) of the Digital Markets Act.
We appealed the European Commission's decision on January 28, 2025. 54 Table of Contents In March 2024, the European Commission opened an investigation into the compliance of our "subscription for no ads" consent model with requirements under Article 5(2) of the Digital Markets Act (DMA).
Beginning in November 2024, counsel for thousands of individual claimants began sending mass arbitration demands relating to "social media addiction" and related harms allegedly caused by Instagram.
In addition, beginning in November 2024, counsel for over one hundred thousand individual claimants have sent mass arbitration demands relating to "social media addiction" and related harms allegedly caused by Instagram.
These cases are in different stages, but several of our motions to dismiss have been denied in whole or in part, while certain others have been granted in whole or in part. We are currently in discovery and litigating class certification in the cases that are most advanced.
These cases are in different stages, but several of our motions to dismiss have been denied in whole or in part, while certain others have been granted in whole or in part. In Rickwalder , the Superior Court denied plaintiffs' motion for class certification and the plaintiffs have appealed that decision.
Following the Supreme Court's ruling in Jarkesy on June 27, 2024, the government filed a renewed motion to dismiss, which was fully briefed as of October 18, 2024. The district court has yet to rule. The parties are required to report back to the circuit court within 30 days of the district court's disposition of the FTC's motion to dismiss.
Following the Supreme Court's ruling in Jarkesy on June 27, 2024, the government filed a renewed motion to dismiss, which was fully briefed as of October 18, 2024.
Competition We are subject to various litigation and government inquiries and investigations, formal or informal, by competition authorities in the United States, Europe, and other jurisdictions. Such investigations, inquiries, and lawsuits concern, among other things, our business practices in the areas of social networking or social media services, digital advertising, and/or mobile or online applications, as well as our acquisitions.
Such investigations, inquiries, and lawsuits concern, among other things, our business practices in the areas of social networking or social media services, digital advertising, and/or mobile or online applications, as well as our acquisitions. For example, in 2019 we became the subject of antitrust investigations by the FTC and U.S. Department of Justice.
For example, in 2019 we became the subject of antitrust investigations by the FTC and U.S. Department of Justice. On December 9, 2020, the FTC filed a complaint ( FTC v. Meta Platforms, Inc. ) against us in the U.S.
On December 9, 2020, the FTC filed a complaint ( FTC v. Meta Platforms, Inc. ) against us in the U.S.
The insider trading claim was dismissed as to all defendants except Mark Zuckerberg, and the motion was denied as to the breach of fiduciary duty claims. Trial is scheduled to begin on April 2, 2025.
The insider trading claim was dismissed as to all defendants except Mark Zuckerberg, and the motion was denied as to the breach of fiduciary duty claims. Trial began on July 16, 2025. On July 17, 2025, the parties agreed to a settlement in principle to resolve all claims in the action, which is subject to court approval.
Court of Appeals for the District of Columbia Circuit has yet to rule. On November 29, 2023, we separately filed a complaint, also in the U.S. District Court for the District of Columbia ( Meta Platforms, Inc. v.
On December 23, 2025, the district court ordered a schedule for supplemental briefing in light of the Court of Appeals decision, with briefing due to be complete by May 2026. On November 29, 2023, we separately filed a complaint, also in the U.S. District Court for the District of Columbia ( Meta Platforms, Inc. v.
The Supreme Court granted in part our petition for writ of certiorari on June 10, 2024, and following oral argument issued an order on November 22, 2024 dismissing the grant of certiorari as improvidently granted. We are also subject to other government inquiries and investigations relating to our business activities and disclosure practices.
The Supreme Court granted in part our petition for writ of certiorari on June 10, 2024, and following oral argument issued an order on November 22, 2024 dismissing the grant of certiorari as improvidently granted. On January 24, 2025, the U.S. Court of Appeals for the Ninth Circuit returned the case to the district court.
We should have the opportunity to appeal an FTC decision modifying the order and could request the appellate court to stay the enforcement of the modifications to the order while the appeal is pending. It is unclear whether the appeal or the request for a stay would be successful.
Through the administrative process, the FTC could amend the order to impose the additional requirements set forth in the proposed order. We should have the opportunity to appeal an FTC decision modifying the order and could request the appellate court to stay the enforcement of the modifications to the order while the appeal is pending.
District Court for the Southern District of New York ( Huckabee, et al. v. Meta Platforms, Inc. et al. , which was subsequently transferred to the U.S. District Court for the Northern District of California) alleging that we used various copyrighted books and materials to train our artificial intelligence models, and seeking unspecified damages and injunctive relief.
District Court for the Northern District of California ( Kadrey, et al. v. Meta Platforms, Inc., Chabon, et al. v. Meta Platforms, Inc. and Farnsworth v. Meta Platforms, Inc. ) and U.S. District Court for the Southern District of New York ( Huckabee, et al. v. Meta Platforms, Inc. et al. , which was subsequently transferred to the U.S.
The European Commission issued preliminary findings on July 1, 2024 reflecting its preliminary view that our model does not comply with such requirements, and indicated that it will conclude its investigation by March 2025.
The European Commission issued preliminary findings on July 1, 2024 reflecting its preliminary view that our model does not comply with such requirements. In April 2025, the European Commission issued a final decision that our "subscription for no ads" model does not comply with such requirements and imposed a fine of EUR €200 million.
We are appealing this Final Decision and it is currently subject to an interim stay from the Irish High Court.
We are appealing this Final Decision and it is currently subject to a stay from the Irish High Court. We have also implemented steps to comply with the above corrective orders and are pending the IDPC's confirmation that these address the corrective orders.
On December 30, 2024, we filed our motion for summary judgment in the putative class action brought on behalf of certain advertisers. In December 2022, the European Commission issued a Statement of Objections alleging that we tie Facebook Marketplace to Facebook and use data in a manner that infringes European Union competition rules.
Meta Platforms Ireland Limited ). Trial is expected to take place in 2027. In December 2022, the European Commission issued a Statement of Objections alleging that we tie Facebook Marketplace to Facebook and use data in a manner that infringes European Union competition rules.
The objection is fully briefed and will be heard on February 7, 2025. In addition, our platform and user data practices, as well as the events surrounding the misuse of certain data by a developer, became the subject of U.S.
In addition, our platform and user data practices, as well as the events surrounding the misuse of certain data by a developer, became the subject of U.S. Federal Trade Commission (FTC), state attorneys general, and other government inquiries in the United States, Europe, and other jurisdictions.
Trial in the New Mexico Attorney General's case is scheduled to begin on December 1, 2025.
Trial in the New Mexico Attorney General's case, which has expanded to include various claims related to content moderation issues, is scheduled to begin on September 8, 2026.
This is in addition to significant tax, competition and antitrust, stockholder, commercial, consumer, and privacy litigation and investigations. Furthermore, as the number of our users and amount of our revenue have grown, our potential exposure to substantial damages awards and fines has increased.
This is in addition to significant tax, competition and antitrust, stockholder, commercial, consumer, intellectual property, and privacy litigation and investigations.
Facebook, Inc. , and that the nature and scope of any further administrative proceedings would be addressed at a later date. Through the administrative process, the FTC could amend the order to impose the additional requirements set forth in the proposed order.
Facebook, Inc. , and that the nature and scope of any further administrative proceedings would be addressed at a later date. On July 30, 2025, the Commission issued an order staying the Order to Show Cause proceeding pending final resolution of the two judicial cases we filed challenging the proceeding.
On March 1, 2022, a first amended consolidated complaint was filed in the putative class action brought on behalf of certain advertisers. On December 6, 2022, the court denied our 53 Table of Contents motion to dismiss the first amended consolidated complaint filed in the putative class action brought on behalf of certain advertisers.
On December 30, 2024, we filed our motion for summary judgment in the putative class action brought on behalf of certain advertisers, which is pending with the court.
Supreme Court on October 2, 2024, which was denied. Beginning on July 7, 2023, multiple putative class actions were filed against us in the U.S. District Court for the Northern District of California ( Kadrey, et al. v. Meta Platforms, Inc., Chabon, et al. v. Meta Platforms, Inc. and Farnsworth v. Meta Platforms, Inc. ) and U.S.
The court is scheduled to hear summary judgment motions on July 16, 2026. Beginning in November 2025, additional cases with similar claims were filed against us in the U.S. District Court for the Northern District of California ( Entrepreneur Media v. Meta Platforms, Inc., Carreyrou et al. v. Anthropic PBC, et al. and TED Entertainment, Inc. v.
Removed
District Court for the Northern District of California ( In re Facebook, Inc., Consumer Privacy User Profile Litigation ). On September 9, 2019, the court granted, in part, and denied, in part, our motion to dismiss the consolidated putative consumer class action.
Added
Furthermore, as the number of our users and amount of our revenue have grown, our potential exposure to substantial damages awards and fines has increased, including through class action litigations and other legal proceedings under statutory regimes permitting penalties or damages on a per-violation basis or based on a percentage of global revenue.
Removed
Federal Trade Commission (FTC), state 51 Table of Contents attorneys general, and other government inquiries in the United States, Europe, and other jurisdictions.
Added
The maximum aggregate monetary damages or penalties sought across our various legal proceedings could amount to an aggregate of up to hundreds of billions of dollars and, as a result, could be material to the financial condition of the company.
Removed
On October 7, 2022, President Biden signed the Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities (E.O.), and on June 30, 2023, the European Union and the three additional countries making up the EEA were designated by the United States Attorney General as a "qualifying state" under Section 3(f) of the E.O.
Added
In addition, in December 2025, we entered into a settlement agreement with California to resolve its lawsuit alleging violations of consumer protection laws, which is subject to court approval.
Removed
On July 10, 2023, the European Commission adopted an adequacy decision in relation to the United States.
Added
The appeal was heard on January 30, 2025 and on July 31, 2025, the District of Columbia Court of Appeals reversed the decision on procedural grounds and remanded the matter to the lower court.
Removed
The adequacy decision concludes that the United States ensures an adequate level of protection for personal data transferred from the European Union to organizations in the United States that are included in the "Data Privacy Framework List," maintained and made publicly available by the United States Department of Commerce pursuant to the EU-U.S. Data Privacy Framework (EU-U.S. DPF).
Added
Court of Appeals for the District of Columbia Circuit issued its decision on May 16, 2025, reversing the district court's denial of our motion on jurisdictional grounds, and directed the district court to consider the merits of our arguments.
Removed
The implementation of the EU-U.S. DPF and the adequacy decision are important and welcome milestones, and we have implemented steps to comply with the above corrective orders following engagement with the IDPC.
Added
On July 10, 2025, the case was remanded to the district court to consider our claims in light of the Court of Appeals' determination that the district court retains jurisdiction over the entirety of the consent order.
Removed
These cases have all been consolidated into Kadrey, et al. v. Meta Platforms, Inc . In the first quarter of 2024, the U.S. Supreme Court heard argument in Vivek H. Murthy, Surgeon General, et al. v.
Added
On June 29, 2025, the district court granted our request for a stay in light of the Court of Appeals' May 16, 2025 decision in the jurisdictional case, and on January 20, 2026, the district court continued the stay and ordered the parties to file a status update by June 8, 2026.
Removed
Missouri, et al. , on the question of whether federal government officials violated the First Amendment in their communications with the company and others related to content moderation practices, and heard argument in Netchoice, et al. v. Paxton and Moody, et al. v.
Added
It is unclear whether the appeal or the request for a stay would be successful.
Removed
Netchoice et al. , regarding the application of the First Amendment relating to content moderation on tech platforms. As to Murthy , a majority of the Supreme Court decided the case on plaintiffs' standing, declining to rule on the First Amendment questions, and sending the case back down to the lower courts where the case continues.
Added
In addition, we are subject to individual and class actions in Europe relating to matters that are or have been the subject of regulatory investigations.
Removed
As to NetChoice , the Supreme Court unanimously vacated the intermediate appellate court decisions, remanding the cases back to the lower courts.
Added
In Flo Health , on August 1, 2025, a jury returned a verdict on liability in favor of the plaintiffs and on behalf of a California subclass on the sole claim remaining against Meta under Section 632 of the California Invasion of Privacy Act.
Removed
On September 18, 2024, staff of the Consumer Financial Protection Bureau (CFPB or Bureau) initiated a Notice and Opportunity to Respond and Advise (NORA) process related to its investigation of advertising for financial products and services on our platform, informing us that staff may recommend to the Director of the CFPB that the Bureau take legal action alleging violations of the Consumer Financial Protection Act, including based on our alleged receipt and use for advertising of financial information from third parties through certain advertising tools as well as our related user disclosures and controls, and provided us with an opportunity to respond.
Added
Plaintiffs are seeking $5,000 in statutory damages per class member and have asserted that there are up to approximately 1.6 million class members. The amount of potential damages is uncertain at this time.
Removed
We disagree with the claims staff is considering and believe an enforcement action is unwarranted, and have responded through the NORA process. The result of the NORA process is uncertain at this time, but if the Director authorizes an action against us, the CFPB could file a lawsuit in the near-term and seek financial penalties and equitable relief.
Added
In addition, we are subject to individual and class actions in Europe, as well as regulatory investigations in the United States, Europe, and elsewhere, relating to similar matters with regard to our business tools. 53 Table of Contents Competition We are subject to various litigation and government inquiries and investigations, formal or informal, by competition authorities in the United States, Europe, and other jurisdictions.
Added
Trial began on April 14, 2025 and concluded on May 27, 2025. On November 18, 2025, the court granted judgment in our favor. On January 20, 2026, the FTC filed a notice of appeal of that ruling.
Added
On January 24, 2025, the court denied plaintiffs' motion for class certification in the action brought on behalf of users, permitting it to proceed only on an individual basis as to the named plaintiffs. On September 29, 2025, in the user action, the court granted our motion, entering judgment in our favor.
Added
On October 27, 2025, plaintiffs in the user action filed a notice of appeal. On February 11, 2022, a putative class action was filed against us in the UK Competition Appeals Tribunal (CAT) under the UK collective proceedings regime ( Lovdahl-Gormsen v. Meta Platforms, Inc. et al. ).
Added
On October 6, 2023, following the denial of class certification, the class representative submitted an amended claim alleging abuse of dominance relating to aspects of our data processing practices and seeking damages. The CAT certified the amended claim on February 15, 2024. Trial is scheduled to begin in September 2027.
Added
We are also subject to litigation in Europe brought by news and media companies alleging anticompetitive conduct in relation to aspects of our historic data processing practices.
Added
For example, on December 1, 2023, 87 news media companies filed a joint action against us in Spain in relation to our legal basis under the GDPR for behavioral advertising, alleging unfair competition and abuse of dominance ( Asociacion de Medios de Informacion (AMI) v. Meta Ireland ).
Added
On November 19, 2025, the court issued judgment against us, finding that AMI had failed to establish abuse of dominance but upholding its case on unfair competition and awarding damages of approximately EUR €542 million. We have appealed the decision.
Added
In addition, on October 24, 2024, ten radio and television publishers commenced a separate claim against us in Spain on the same basis ( Union de Televisiones Comerciales Asociadas (UTECA) v. Meta Ireland ). In addition, on April 29, 2025, a similar unfair competition claim was filed against us by 67 media companies in France ( Amaury et al. v.
Added
Based on feedback from the European Commission in connection with the DMA, we launched less personalized ads (LPA) in November 2024 and made significant modifications to LPA since the European Commission issued its final decision.
Added
We appealed the European Commission's decision on July 4, 2025, but further modifications to our model may be imposed during the appeal process, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue.
Added
On July 1, 2025, the plaintiffs filed a fourth amended complaint. On September 2, 2025, we filed a motion to dismiss the fourth amended complaint. We are also subject to other government inquiries and investigations relating to our business activities and disclosure practices.
Added
Certain of the lawsuits described above have since expanded to include various other claims relating to our services, including with respect to age verification, AI and AI chatbots, deceptive advertising, illicit or illegal activity with respect to drugs, fraud, and firearms, and privacy-related matters, among others.
Added
Trial in the first of the personal injury cases began on January 27, 2026 in Judicial Council Coordination Proceeding No. 5255 pending in Los Angeles County California Superior Court.
Added
Trial in the first of the state attorneys general cases is currently scheduled to begin on February 2, 2026 in the First Judicial District Court of New Mexico, in a case brought by the New Mexico Attorney General.
Added
Trials in other state attorneys general cases are currently scheduled or expected to be scheduled in the second half of 2026 or in 2027. The first trial in the multidistrict litigation ( In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation ) is a school district bellwether case and is scheduled to begin on June 15, 2026.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−1 removed3 unchanged
Biggest changeDividend Policy Beginning in February 2024, our board of directors declared a quarterly cash dividend of $0.50 per share to the holders of our Class A and Class B common stock.
Biggest changeDividend Policy Beginning in 2024, our board of directors declared quarterly cash dividends to the holders of our Class A and Class B common stock. During the year ended December 31, 2025, total dividend and dividend equivalent payments were $4.60 billion and $720 million for Class A and Class B common stock, respectively.
Recent Sale of Unregistered Securities and Use of Proceeds Recent Sale of Unregistered Securities None. 57 Table of Contents Stock Performance Graph This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Meta Platforms, Inc. under the Securities Act of 1933, as amended, or the Exchange Act.
Recent Sale of Unregistered Securities and Use of Proceeds Recent Sale of Unregistered Securities None. 58 Table of Contents Stock Performance Graph This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Meta Platforms, Inc. under the Securities Act of 1933, as amended, or the Exchange Act.
The annual changes for the five-year period shown in the graph assumes that $100 was invested in our common stock and each index at the market close on the last trading day for the fiscal year ended December 31, 2019, and that all dividends were reinvested.
The annual changes for the five-year period shown in the graph assumes that $100 was invested in our common stock and each index at the market close on the last trading day for the fiscal year ended December 31, 2020, and that all dividends were reinvested.
The following graph shows a comparison of the cumulative total return for our Class A common stock, the Dow Jones Internet Composite Index (DJINET), the Standard & Poor's 500 Stock Index (S&P 500) and the Nasdaq Composite Index (Nasdaq Composite) for the five years ended December 31, 2024.
The following graph shows a comparison of the cumulative total return for our Class A common stock, the Dow Jones Internet Composite Index (DJINET), the Standard & Poor's 500 Stock Index (S&P 500) and the Nasdaq Composite Index (Nasdaq Composite) for the five years ended December 31, 2025.
See Note 13 — Stockholders' Equity in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding dividends.
See Note 12 — Stockholders' Equity in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding dividends.
Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. As of December 31, 2024, there were 24 stockholders of record of our Class B common stock.
Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. As of December 31, 2025, there were 25 stockholders of record of our Class B common stock.
Holders of Record As of December 31, 2024, there were 2,931 stockholders of record of our Class A common stock, and the closing price of our Class A common stock was $585.51 per share as reported on the Nasdaq Global Select Market.
Holders of Record As of December 31, 2025, there were 2,533 stockholders of record of our Class A common stock, and the closing price of our Class A common stock was $660.09 per share as reported on the Nasdaq Global Select Market.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We had no share repurchase activity for the three months ended December 31, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers There was no share repurchase activity during the three months ended December 31, 2025.
The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The stock price performance of the following graph is not necessarily indicative of future stock price performance. Item 6. [Reserved] 59 Table of Contents
Removed
RSUs granted on or after March 1, 2024 under our 2012 Equity Incentive Plan (Amended 2012 Plan), which was most recently amended in May 2024, are entitled to dividend equivalent rights. During the year ended December 31, 2024, total dividend and dividend equivalent payments were $4.38 billion and $691 million for Class A and Class B common stock, respectively.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+20 added−22 removed65 unchanged
Biggest changeSee Note 3 — Restructuring, Note 7 — Property and Equipment, Note 12 — Commitments and Contingencies, and Note 16 — Segment and Geographical Information in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding restructuring charges, depreciation expense, legal-related costs, and segment employee compensation, respectively. 74 Table of Contents Interest and other income (expense), net Year Ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (in millions, except percentages) Interest income $ 2,517 $ 1,639 $ 461 54 % 256 % Interest expense (715) (446) (185) (60) % (141) % Foreign currency exchange losses, net (690) (366) (81) (89) % (352) % Other income (expense), net 171 (150) (320) 214 % 53 % Total interest and other income (expense), net $ 1,283 $ 677 $ (125) 90 % NM ____________________________________ NM - not meaningful Interest and other income (expense), net in 2024 increased $606 million compared to 2023, mostly due to an increase in interest income from a combination of higher balances and interest rates, partially offset by an increase in interest expense on our long-term debt.
Biggest changeSee Note 15 — Segment and Geographical Information in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information. 75 Table of Contents Interest and other income, net Year Ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (in millions, except percentages) Interest income $ 2,123 $ 2,517 $ 1,639 (16) % 54 % Interest expense (1,165) (715) (446) (63) % (60) % Foreign currency exchange gains (losses), net 352 (690) (366) 151 % (89) % Other income (expense), net 1,346 171 (150) NM 214 % Total interest and other income, net $ 2,656 $ 1,283 $ 677 107 % 90 % ____________________________________ NM - not meaningful Interest and other income, net in 2025 increased $1.37 billion, or 107% compared to 2024, due to an increase in other income (expense), net, related to the unrealized gains on our marketable and non-marketable equity investments.
The ultimate outcome of these matters, such as whether the likelihood of loss is remote, reasonably possible, or probable or if and when the reasonably possible range of loss is estimable, is inherently uncertain.
The ultimate outcome of these matters, such as whether the likelihood of loss is remote, reasonably possible, or probable or if and when the possible range of loss is reasonably estimable, is inherently uncertain.
Research and development expenses consist mostly of employee compensation which includes payroll, share-based compensation and benefits for our employees on our engineering and technical teams who are responsible for developing new technologies and products; RL technology development costs; infrastructure costs; and facilities-related costs. Marketing and sales.
Research and development expenses consist mostly of employee compensation which includes payroll, share-based compensation and benefits for our employees on our engineering and technical teams who are responsible for developing new technologies and products; infrastructure costs; RL technology development costs; and facilities-related costs. Marketing and sales.
Significant judgment is required to determine the probability of loss and the estimated amount of loss, including when and if the probability and estimate has changed for asserted and unasserted matters. Certain factors, in particular, have resulted in significant changes to these estimates and judgments in prior quarters based on updated information available.
Significant judgment is required to determine the likelihood of loss and the estimated amount of loss, including when and if the probability and estimate has changed for asserted and unasserted matters. Certain factors, in particular, have resulted in significant changes to these estimates and judgments in prior quarters based on updated information available.
In addition, mobile operating system and browser providers, such as Apple and Google, have implemented product changes and/or announced future plans to limit the ability of websites and application developers to collect and use these signals to target and measure advertising.
In addition, mobile operating system and browser providers, such as Apple and Google, have implemented product changes and/or announced plans to limit the ability of websites and application developers to collect and use these signals to target and measure advertising.
This allocation differs from our revenue disaggregated by geography disclosure in Note 2 — Revenue in our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplemental Data" where revenue is geographically apportioned based on the addresses of our customers. 63 Table of Contents Trends in Our Family Metrics The numbers for our key Family metrics, our DAP and average revenue per person (ARPP), do not include users on our other products unless they would otherwise qualify as DAP based on their other activities on our Family products.
This allocation differs from our revenue disaggregated by geography disclosure in Note 2 — Revenue in our consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplemental Data" where revenue is geographically apportioned based on the addresses of our customers. 64 Table of Contents Trends in Our Family Metrics The numbers for our key Family metrics, our DAP and average revenue per person (ARPP), do not include users on our other products unless they would otherwise qualify as DAP based on their other activities on our Family products.
The requirements for complying with these obligations may be uncertain and subject to interpretation and enforcement by regulatory and other authorities, and any failure to comply with such obligations could eventually lead to asserted legal or regulatory action.
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.
See Note 15 — Income Taxes in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding income tax contingencies. Liquidity and Capital Resources Our principal sources of liquidity are our cash, cash equivalents, marketable securities, and cash generated from operations.
See Note 14 — Income Taxes in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding income tax contingencies. Liquidity and Capital Resources Our principal sources of liquidity are our cash, cash equivalents, marketable securities, and cash generated from operations.
The geography of our users affects our revenue and financial results. Our revenue in regions such as United States & Canada and Europe is relatively higher primarily due to the size and maturity of those online and mobile advertising markets, and ad impression growth is primarily in geographies that monetize at lower rates, such as Asia-Pacific and Rest of World.
The geography of our users affects our revenue and financial results. Our revenue in regions such as United States & Canada and Europe is relatively higher primarily due to the size and maturity of those online and mobile advertising markets, and ad impression growth is primarily in geographies that monetize at lower rates, such as Asia-Pacific.
Other factors are discussed in the section entitled "—Executive Overview of Full Year 2024 Results." In addition, the online commerce vertical was the largest contributor to the increase in advertising revenue in 2024 compared to 2023. We anticipate that future advertising revenue will be driven by a combination of price and ad impressions delivered.
Other factors are discussed in the section entitled "—Executive Overview of Full Year 2025 Results." In addition, the online commerce vertical was the largest contributor to the increase in advertising revenue in 2025 compared to 2024. We anticipate that future advertising revenue will be driven by a combination of price and ad impressions delivered.
We subsequently began offering users in the region who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads, which are expected to be less relevant and effective than our premium ad offerings. We are engaging with regulators on our consent model.
We subsequently began offering users in the region who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads, which are less relevant and effective than our premium ad offerings. We are engaging with regulators on our consent model.
Note: Our average price per ad growth by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when an ad impression is delivered. 67 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Note: Our average price per ad growth by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when an ad impression is delivered. 68 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Revenue on a constant currency basis is presented in the section entitled " — Revenue — Foreign Exchange Impact on Revenue." To calculate revenue on a constant currency basis, we translated revenue for the full year 2024 using 2023 monthly exchange rates for our settlement or billing currencies other than the U.S. dollar.
Revenue on a constant currency basis is presented in the section entitled " — Revenue — Foreign Exchange Impact on Revenue." To calculate revenue on a constant currency basis, we translated revenue for the full year 2025 using 2024 monthly exchange rates for our settlement or billing currencies other than the U.S. dollar.
Impressions are considered delivered when an ad is displayed to a user. Note: Our ad impressions growth by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when an ad impression is delivered. 66 Table of Contents • Average Price Per Ad.
Impressions are considered delivered when an ad is displayed to a user. Note: Our ad impressions growth by user geography in the charts above is geographically apportioned based on our estimation of the geographic location of our users when an ad impression is delivered. 67 Table of Contents • Average Price Per Ad.
Marketing and sales expenses consist primarily of employee compensation which includes payroll, share-based compensation and benefits for our employees engaged in sales, sales support, marketing, business development, and customer service functions; marketing and promotional expenses; and professional services to support our community and product operations. General and administrative.
Marketing and sales expenses consist mostly of employee compensation which includes payroll, share-based compensation and benefits for our employees engaged in sales, sales support, marketing, business development, and customer service functions; professional services to support our community and product operations; and marketing and promotional expenses. General and administrative.
General and administrative expenses consist primarily of employee compensation which includes payroll, share-based compensation and benefits for certain of our executives as well as our legal, finance, human resources, corporate communications and policy, and other administrative employees; legal-related costs, which include estimated fines, settlements, or other losses in connection with legal and related matters, as well as other legal fees; other taxes, such as digital services taxes and other non-income-based tax levies; and professional services. 70 Table of Contents Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
General and administrative expenses consist primarily of employee compensation which includes payroll, share-based compensation and benefits for certain of our executives as well as our legal, finance, human resources, corporate communications and policy, and other administrative employees; legal-related costs, which include estimated fines, settlements, or other losses in connection with legal and related matters, as well as other legal fees; other taxes, such as digital services taxes and other non-income-based tax levies; and professional services. 71 Table of Contents Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Our effective tax rate in the future will depend upon the proportion between the following items and income before provision for income taxes: U.S. tax benefits from foreign-derived intangible income, tax effects from share-based compensation, research tax credit, tax effects from capital losses not expected to be utilized, settlement of tax contingency items, tax effects of changes in our business, and the effects of changes in tax law.
Our effective tax rate in the future will depend upon the proportion between the following items and income before provision for income taxes: the effects of changes in tax law, changes in valuation allowance due to the effects of CAMT, U.S. tax benefits from foreign-derived intangible income, tax effects from share-based compensation, research tax credit, tax effects from capital losses not expected to be utilized, settlement of tax contingency items, and tax effects of changes in our business.
For example, in response to regulatory developments in Europe, we announced our plans to change the legal basis for behavioral advertising on Facebook and Instagram in the European Union, European Economic Area, and Switzerland from "legitimate interests" to "consent," and began offering users in the region a "subscription for no ads" alternative.
For example, in response to regulatory developments in Europe, we announced our plans to change the legal basis for behavioral advertising on Facebook and Instagram in the European Union, European Economic Area, and 61 Table of Contents Switzerland from "legitimate interests" to "consent," and began offering users in the region a "subscription for no ads" alternative.
See Note 12 — Commitments and Contingencies and Note 15 — Income Taxes of the accompanying notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" and Part I, Item 3, "Legal Proceedings" of this Annual Report on Form 10-K for additional information regarding these contingencies.
See Note 11 — Commitments and Contingencies and Note 14 — Income Taxes of the accompanying notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" and Part I, Item 3, "Legal Proceedings" of this Annual Report on Form 10-K for additional information regarding these contingencies.
Our advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party mobile applications. Marketers pay for ad products either directly or through their relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions, such as clicks, taken by users.
We generate substantially all of our revenue from advertising. Our advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party mobile applications. Marketers pay for ad products either directly or through their relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions, such as clicks, taken by users.
We make adjustments to our provisions and changes to our disclosures accordingly to reflect the merits of our defenses and the impact of negotiations, settlements, regulatory proceedings, rulings, advice of legal counsel, and updated information.
We make adjustments to our estimated liability and changes to our disclosures accordingly to reflect the merits of our defenses and the impact of negotiations, settlements, regulatory proceedings, rulings, advice of legal counsel, and updated information.
Executive Overview of Full Year 2024 Results Our mission is to build the future of human connection and the technology that makes it possible. Our financial results and key Family metrics for 2024 are set forth below. Total revenue for 2024 was $164.50 billion, an increase of 22% compared to 2023, due to an increase in advertising revenue.
Executive Overview of Full Year 2025 Results Our mission is to build the future of human connection and the technology that makes it possible. Our financial results and key Family metrics for 2025 are set forth below. Total revenue for 2025 was $200.97 billion, an increase of 22% compared to 2024, due to an increase in advertising revenue.
The increase in average price per ad in 2024 was driven by an increase in advertising demand, which we believe is mainly due to ongoing improvements to our ad performance from our ad targeting and measurement tools.
The increase in average price per ad in 2025 was driven by an increase in advertising demand, which we believe is mostly due to ongoing improvements to our ad performance from our ad targeting and measurement tools.
For instance, our total revenue increased 19%, 17%, and 16% between the third and fourth quarters of 2024, 2023, and 2022, respectively, while total revenue for the first quarters of 2024, 2023, and 2022 declined 9%, 11%, and 17% compared to the fourth quarters of 2023, 2022, and 2021, respectively. 72 Table of Contents Foreign Exchange Impact on Revenue Changes in foreign exchange rates had an unfavorable impact on our revenue in the full year 2024 compared to the same period in 2023.
For instance, our total revenue increased 17%, 19%, and 17% between the third and fourth quarters of 2025, 2024, and 2023, respectively, while total revenue for the first quarters of 2025, 2024, and 2023 declined 13%, 9%, and 11% compared to the fourth quarters of 2024, 2023, and 2022, respectively. 73 Table of Contents Foreign Exchange Impact on Revenue Changes in foreign exchange rates had an unfavorable impact on our revenue in the full year 2025 compared to the same period in 2024.
In particular, legislative and regulatory developments such as the General Data Protection Regulation, including its evolving interpretation through decisions of the Court of Justice of the European Union, ePrivacy Directive, European Digital Services Act, Digital Markets Act, and U.S. state privacy laws including the California Consumer Privacy Act, as amended by the California Privacy Rights Act, have impacted our ability to use data signals in our ad products, and an increasing 60 Table of Contents number of laws have been introduced limiting or prohibiting the provision of our services to younger users.
In particular, legislative and regulatory developments such as the General Data Protection Regulation, including its evolving interpretation through decisions of the Court of Justice of the European Union, ePrivacy Directive, European Digital Services Act, Digital Markets Act, and U.S. state privacy laws have impacted our ability to use data signals in our ad products, and an increasing number of laws have been introduced limiting or prohibiting the provision of our services to younger users.
We believe that the estimates and assumptions associated with loss contingencies, income taxes, and valuation of assets, when applicable, have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting estimates.
We believe that the estimates and assumptions associated with loss contingencies, income taxes, and valuation of non-marketable equity investments, when applicable, have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting estimates.
Other revenue consists of revenue from WhatsApp Business Platform, Meta Verified subscriptions, net fees we receive from developers using our Payments infrastructure, and revenue from various other sources. Reality Labs (RL) RL revenue is generated from the delivery of consumer hardware products, such as Meta Quest and Ray-Ban Meta AI glasses, and related software and content.
Other revenue consists of revenue from paid messaging from WhatsApp, Meta Verified subscriptions, net fees we receive from developers using our Payments infrastructure, and revenue from various other sources. Reality Labs (RL) RL revenue is generated from the delivery of consumer hardware products, such as Meta Quest and AI glasses, and related software and content.
Subject to legally available funds and future declaration by our board of directors, we currently intend to continue to pay a quarterly cash dividend and dividend equivalents on our outstanding common stock. Taxes Cash paid for income taxes was $10.55 billion for the year ended December 31, 2024.
Subject to legally available funds and future declaration by our board of directors, we currently intend to continue to pay a quarterly cash dividend and dividend equivalents on our outstanding common stock. Taxes Cash paid for income taxes was $7.58 billion for the year ended December 31, 2025.
We are investing now because we believe this is the next chapter of the internet and will unlock monetization opportunities for businesses, developers, and creators, including around advertising, hardware, and digital goods. 62 Table of Contents Trends in Our Revenue by User Geography We calculate our revenue by user geography based on our estimate of the geography in which ad impressions are delivered, virtual and digital goods are purchased, or consumer hardware products are shipped.
We are investing now because we believe this will become the next computing platform and will unlock monetization opportunities for businesses, developers, and creators, including around advertising, hardware, and digital goods. 63 Table of Contents Trends in Our Revenue by User Geography We calculate our revenue by user geography based on our estimate of the geography in which ad impressions are delivered, virtual and digital goods are purchased, or consumer hardware products are shipped.
See Note 3 — Restructuring and Note 12 — Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding restructuring charges and legal-related costs, respectively.
See Note 11 — Commitments and Contingencies in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding legal-related costs.
Our annual worldwide ARPP in 2024, which represents the sum of quarterly ARPP during such period, was $49.63, an increase of 15% from 2023. 65 Table of Contents Trends in Our Ad Impressions and Average Price Per Ad • Ad Impressions. Our advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party mobile applications.
Our annual worldwide ARPP in 2025, which represents the sum of quarterly ARPP during such period, was $57.03, an increase of 15% from 2024. 66 Table of Contents Trends in Our Ad Impressions and Average Price Per Ad • Ad Impressions. Our advertising revenue is generated by displaying ad products on Facebook, Instagram, Messenger, and third-party mobile applications.
Capital Return Program Share Repurchase Our board of directors has authorized a share repurchase program of our Class A common stock, which commenced in January 2017 and does not have an expiration date. In 2024, we repurchased and subsequently retired 65 million shares of our Class A common stock for an aggregate amount of $29.75 billion.
Capital Return Program Share Repurchase Our board of directors has authorized a share repurchase program of our Class A common stock, which commenced in January 2017 and does not have an expiration date. In 2025, we repurchased and subsequently retired 40 million shares of our Class A common stock for an aggregate amount of $26.26 billion.
In addition, for these non-marketable equity securities, determining whether a non-marketable equity security issued by the same issuer is similar to the non-marketable equity security we hold may require judgment in (a) assessment of differences in rights and obligations associated with the instruments such as voting rights, distribution rights and preferences, and conversion features, and (b) adjustments to the observable price for differences such as, but not limited to, rights and obligations, control premium, liquidity, or principal or most advantageous markets.
In addition, under the measurement alternative, determining whether another non-marketable equity investment of the same issuer is similar to the non-marketable equity investment we hold may require judgment in (a) assessment of differences in rights and obligations associated with the instruments such as voting rights, distribution rights and preferences, and conversion features, and (b) adjustments to the observable price for differences such as, but not limited to, rights and obligations, control premium, liquidity, or principal or most advantageous markets.
Many of our RL investments are directed toward long-term, cutting-edge research and development for products that may only be fully realized in the next decade. In 2024, our RL segment reduced our overall operating profit by approximately $17.73 billion, and we continue to expect our RL operating losses to increase in 2025.
Many of our RL investments are directed toward long-term, cutting-edge research and development for products that may only be fully realized in the next decade. In 2025, our RL segment reduced our overall operating profit by approximately $19.19 billion, and we expect our 2026 RL operating losses to remain similar to 2025.
We review the developments in our contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed.
We review the developments in our contingencies that could affect the amount of the estimated liability that has been previously recorded, and the matters and related reasonably possible losses disclosed.
The increase in cash flows from operating activities during 2024 compared to 2023, was due to an increase in cash collection from our customers driven by the increase in revenue, partially offset by higher cash paid for income taxes and other operational spending.
The increase in cash flows from operating activities during 2025 compared to 2024, was primarily due to an increase in cash collections from our customers driven by the increase in revenue and lower cash paid for income taxes, partially offset by higher operational spending.
Ad impressions delivered during 2024 grew in all regions, especially in Asia-Pacific and Rest of World, which was mostly driven by increases in users and their engagement on our products. In 2024, the average price per ad increased by 10%, as compared with a decrease of 9% in 2023, year-over-year.
Ad impressions delivered during 2025 grew in all regions, especially in Asia-Pacific, which was driven by increases in users and their engagement on our products. In 2025, the average price per ad increased by 9%, as compared with an increase of 10% in 2024, year-over-year.
We define ARPP as our FoA revenue during a given quarter, divided by the average of the number of DAP at the beginning and end of the quarter.
Our Family of Apps (FoA) revenue represents the substantial majority of our total revenue. We define ARPP as our FoA revenue during a given quarter, divided by the average of the number of DAP at the beginning and end of the quarter.
In 2024, revenue increased by 18% in United States & Canada, 26% in Europe, 22% in Asia-Pacific, and 31% in Rest of World, in each case relative to 2023. - Ad Revenue Non-Ad Revenue Note: Non-advertising revenue includes RL revenue generated from the delivery of consumer hardware products and FoA Other revenue, which consists of revenue from WhatsApp Business Platform, Meta Verified subscriptions, net fees we receive from developers using our Payments infrastructure, and revenue from various other sources.
In 2025, revenue increased by 21% in United States & Canada, 24% in Europe, 20% in Asia-Pacific, and 27% in Rest of World, in each case relative to 2024. - Ad Revenue Non-Ad Revenue Note: Non-advertising revenue includes RL revenue generated from the delivery of consumer hardware products and FoA Other revenue, which consists of revenue from paid messaging from WhatsApp, Meta Verified subscriptions, net fees we receive from developers using our Payments infrastructure, and revenue from various other sources.
Impairment testing for non-marketable equity securities without readily determinable fair values accounted for using the measurement alternative is performed at each reporting date to determine whether there are triggering events for impairment.
Valuation of Non-marketable Equity Investments Impairment testing for non-marketable equity investments, including equity investments without readily determinable fair values accounted for using either the measurement alternative or the equity method, is performed at each reporting date to determine whether there are triggering events for impairment.
See Note 3 — Restructuring in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding restructuring charges.
For additional information, see Note 14 — Income Taxes of the accompanying notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
When indicators of impairment exist, we estimate the fair value of our non-marketable equity securities using the market approach and/or the income approach and recognize impairment loss in our consolidated statements of income if the estimated fair value is less than the carrying value.
When indicators of impairment exist, we estimate the fair value of our non-marketable equity investments using the market approach and/or the income approach and recognize impairment loss in our consolidated statements of income if the estimated fair value is less than the carrying value. For equity method investments, an impairment loss is recognized when the impairment is considered other-than-temporary.
The increase was almost entirely driven by advertising revenue. Advertising Advertising revenue in 2024 increased $28.68 billion, or 22%, compared to 2023 due to increases in ad impressions delivered and average price per ad. In 2024, ad impressions delivered increased by 11%, as compared with a 28% increase in 2023, year-over-year.
The increase was almost entirely driven by advertising revenue. Advertising Advertising revenue in 2025 increased $35.54 billion, or 22%, compared to 2024 due to increases in ad impressions delivered and average price per ad. In 2025, ad impressions delivered increased by 12%, as compared with an increase of 11% in 2024, year-over-year.
Due to uncertainties in the timing of the completion of tax audits, the timing of the resolution of these positions is uncertain and we are unable to make a reasonably reliable estimate of the timing of payments. Loss Contingencies We are involved in legal proceedings, claims, and regulatory, tax or government inquiries and investigations.
Due to the uncertainty in the timing of the resolution of our uncertain tax positions, we are unable to make a reasonably reliable estimate of the timing of payments. 79 Table of Contents Loss Contingencies We are involved in legal proceedings, claims, and regulatory, tax or government inquiries and investigations.
Long-term Debt As of December 31, 2024, we had outstanding long-term debt in the form of senior unsecured notes for an aggregate principal amount of $29.0 billion, which mature from 2027 through 2064. Short-term and long-term future interest payments obligations as of December 31, 2024 were $1.39 billion and $28.10 billion, respectively.
Long-term Debt As of December 31, 2025, we had outstanding long-term debt in the form of senior unsecured notes for an aggregate principal amount of $59.0 billion, which mature from 2027 through 2064. Short-term and long-term future interest payments obligations as of December 31, 2025 were $2.98 billion and $56.74 billion, respectively.
We also have seen fluctuations and declines in the size of our active user base in one or more regions from time to time due to geopolitical conditions, which have adversely affected our user growth and engagement.
We also have seen fluctuations and declines in the size of our active user base in one or more regions from time to time due to geopolitical conditions, which have adversely affected our user growth and engagement. These trends have adversely affected our advertising revenue and we expect will continue to adversely affect our advertising revenue in the foreseeable future.
Therefore, if one or more of these matters were resolved against us for amounts that materially differ from management's estimates of losses, it could have a favorable or unfavorable impact on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.
Therefore, if one or more of these matters were resolved against us for amounts that materially differ from management's estimates of losses, it could have a favorable or unfavorable impact on our results of operations and financial condition.
Family of Apps Metrics • Family daily active people (DAP) was 3.35 billion on average for December 2024, an increase of 5% year-over-year. • Ad impressions delivered across our Family of Apps increased by 11% year-over-year in 2024. • Average price per ad increased by 10% year-over-year in 2024.
Family of Apps Metrics • Family daily active people (DAP) was 3.58 billion on average for December 2025, an increase of 7% year-over-year. • Ad impressions delivered across our Family of Apps increased by 12% year-over-year in 2025. • Average price per ad increased by 9% year-over-year in 2025.
Cost of revenue Year Ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (in millions, except percentages) Cost of revenue $ 30,161 $ 25,959 $ 25,249 16 % 3 % Percentage of revenue 18 % 19 % 22 % Cost of revenue in 2024 increased $4.20 billion, or 16%, compared to 2023.
Cost of revenue Year Ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (in millions, except percentages) Cost of revenue $ 36,175 $ 30,161 $ 25,959 20 % 16 % Percentage of revenue 18 % 18 % 19 % Cost of revenue in 2025 increased $6.01 billion, or 20%, compared to 2024.
The increase in cash used in investing activities during 2024 compared to 2023 was mostly due to increases in net purchases of marketable debt securities and property and equipment.
The increase in cash used in investing activities during 2025 compared to 2024 was mostly due to increases in purchases of property and equipment and non-marketable equity investments.
The following is a reconciliation of FCF to the most comparable GAAP measure, net cash provided by operating activities (in millions): Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 91,328 $ 71,113 $ 50,475 Purchases of property and equipment (37,256) (27,045) (31,186) Principal payments on finance leases (1,969) (1,058) (850) Free cash flow $ 52,103 $ 43,010 $ 18,439 77 Table of Contents Material Cash Requirements We currently anticipate that our available funds and cash flow from operations and financing activities will be sufficient to meet our operational cash needs and fund our investments in infrastructure and AI initiatives, share repurchases and dividend payments for at least the next 12 months and thereafter for the foreseeable future.
The following is a reconciliation of FCF to the most comparable GAAP measure, net cash provided by operating activities (in millions): Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 115,800 $ 91,328 $ 71,113 Purchases of property and equipment (69,691) (37,256) (27,045) Principal payments on finance leases (2,524) (1,969) (1,058) Free cash flow $ 43,585 $ 52,103 $ 43,010 78 Table of Contents Material Cash Requirements We currently anticipate that our available funds and cash flow from operations and financing activities will be sufficient to meet our operational cash needs and fund our cash commitments for investing and financing activities, including investments in infrastructure and AI initiatives, as well as any return of capital to stockholders over the next 12 months and thereafter for the foreseeable future.
In particular, we expect our AI initiatives will require increased investment in infrastructure and headcount. We are also making significant investments in our metaverse and wearables efforts, including developing virtual, augmented, and mixed reality devices, software for social platforms, neural interfaces, and other foundational technologies. Our RL investments include expenses relating to technology development across these efforts.
We are also making significant investments in our RL efforts, including developing virtual and augmented reality devices, software for social platforms, neural interfaces, and other foundational technologies. Our RL investments include expenses relating to technology development across these efforts.
Change in Accounting Estimate In January 2025, we completed an assessment of the useful lives of certain servers and network assets, which resulted in an increase in their estimated useful life to 5.5 years, effective beginning fiscal year 2025.
Change in Accounting Estimate In January 2025, we completed an assessment of the useful lives of property and equipment, which resulted in an increase in the estimated useful lives of most servers and network assets to 5.5 years, effective January 1, 2025.
Segment profitability The following table sets forth income (loss) from operations by segment: Year Ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (in millions, except percentages) Family of Apps $ 87,109 $ 62,871 $ 42,661 39 % 47 % Reality Labs (17,729) (16,120) (13,717) (10) % (18) % Total income from operations $ 69,380 $ 46,751 $ 28,944 48 % 62 % Family of Apps FoA income from operations in 2024 increased $24.24 billion, or 39%, compared to 2023.
Segment profitability The following table sets forth income (loss) from operations by segment: Year Ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (in millions, except percentages) Family of Apps $ 102,469 $ 87,109 $ 62,871 18 % 39 % Reality Labs (19,193) (17,729) (16,120) (8) % (10) % Total income from operations $ 83,276 $ 69,380 $ 46,751 20 % 48 % Family of Apps FoA income from operations in 2025 increased $15.36 billion, or 18%, compared to 2024.
Research and development Year Ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (in millions, except percentages) Research and development $ 43,873 $ 38,483 $ 35,338 14 % 9 % Percentage of revenue 27 % 29 % 30 % Research and development expenses in 2024 increased $5.39 billion, or 14%, compared to 2023.
Research and development Year Ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (in millions, except percentages) Research and development $ 57,372 $ 43,873 $ 38,483 31 % 14 % Percentage of revenue 29 % 27 % 29 % Research and development expenses in 2025 increased $13.50 billion, or 31%, compared to 2024.
Marketing and sales Year Ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (in millions, except percentages) Marketing and sales $ 11,347 $ 12,301 $ 15,262 (8) % (19) % Percentage of revenue 7 % 9 % 13 % Marketing and sales expenses in 2024 decreased $954 million, or 8%, compared to 2023.
Marketing and sales Year Ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (in millions, except percentages) Marketing and sales $ 11,991 $ 11,347 $ 12,301 6 % (8) % Percentage of revenue 6 % 7 % 9 % Marketing and sales expenses in 2025 increased $644 million, or 6%, compared to 2024.
The following table sets forth our consolidated statements of income data (in millions): Year Ended December 31, 2024 2023 2022 Revenue $ 164,501 $ 134,902 $ 116,609 Costs and expenses: Cost of revenue 30,161 25,959 25,249 Research and development 43,873 38,483 35,338 Marketing and sales 11,347 12,301 15,262 General and administrative 9,740 11,408 11,816 Total costs and expenses 95,121 88,151 87,665 Income from operations 69,380 46,751 28,944 Interest and other income (expense), net 1,283 677 (125) Income before provision for income taxes 70,663 47,428 28,819 Provision for income taxes 8,303 8,330 5,619 Net income $ 62,360 $ 39,098 $ 23,200 The following table sets forth our consolidated statements of income data (as a percentage of revenue) (1) : Year Ended December 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 18 19 22 Research and development 27 29 30 Marketing and sales 7 9 13 General and administrative 6 8 10 Total costs and expenses 58 65 75 Income from operations 42 35 25 Interest and other income (expense), net 1 1 — Income before provision for income taxes 43 35 25 Provision for income taxes 5 6 5 Net income 38 % 29 % 20 % _________________________ (1) Percentages have been rounded for presentation purposes and may differ from unrounded results. 71 Table of Contents Revenue The following table sets forth our revenue by source and by segment: Year Ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (in millions, except percentages) Advertising $ 160,633 $ 131,948 $ 113,642 22 % 16 % Other revenue 1,722 1,058 808 63 % 31 % Family of Apps 162,355 133,006 114,450 22 % 16 % Reality Labs 2,146 1,896 2,159 13 % (12) % Total revenue $ 164,501 $ 134,902 $ 116,609 22 % 16 % Family of Apps FoA revenue in 2024 increased $29.35 billion, or 22%, compared to 2023.
The following table sets forth our consolidated statements of income data (in millions): Year Ended December 31, 2025 2024 2023 Revenue $ 200,966 $ 164,501 $ 134,902 Costs and expenses: Cost of revenue 36,175 30,161 25,959 Research and development 57,372 43,873 38,483 Marketing and sales 11,991 11,347 12,301 General and administrative 12,152 9,740 11,408 Total costs and expenses 117,690 95,121 88,151 Income from operations 83,276 69,380 46,751 Interest and other income, net 2,656 1,283 677 Income before provision for income taxes 85,932 70,663 47,428 Provision for income taxes 25,474 8,303 8,330 Net income $ 60,458 $ 62,360 $ 39,098 The following table sets forth our consolidated statements of income data (as a percentage of revenue) (1) : Year Ended December 31, 2025 2024 2023 Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 18 18 19 Research and development 29 27 29 Marketing and sales 6 7 9 General and administrative 6 6 8 Total costs and expenses 59 58 65 Income from operations 41 42 35 Interest and other income, net 1 1 1 Income before provision for income taxes 43 43 35 Provision for income taxes 13 5 6 Net income 30 % 38 % 29 % _________________________ (1) Percentages have been rounded for presentation purposes and may differ from unrounded results. 72 Table of Contents Revenue The following table sets forth our revenue by source and by segment: Year Ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (in millions, except percentages) Advertising $ 196,175 $ 160,633 $ 131,948 22 % 22 % Other revenue 2,584 1,722 1,058 50 % 63 % Family of Apps 198,759 162,355 133,006 22 % 22 % Reality Labs 2,207 2,146 1,896 3 % 13 % Total revenue $ 200,966 $ 164,501 $ 134,902 22 % 22 % Family of Apps FoA revenue in 2025 increased $36.40 billion, or 22%, compared to 2024.
However, we continue to face competition from other products and services within certain demographics, in particular younger users. In addition, while Reels is growing in usage, it monetizes at a lower rate than our Feed and Stories products and we expect it will continue to monetize at a lower rate for the foreseeable future.
In addition, while Reels is growing in usage, it monetizes at a lower rate than our Feed and Stories products and we expect it will continue to monetize at a lower rate for the foreseeable future.
We anticipate making capital expenditures of approximately $60 billion to $65 billion in 2025 to support our core business and generative AI efforts. 76 Table of Contents Cash Used in Financing Activities Cash used in financing activities during 2024 mostly consisted of $30.13 billion for repurchases of our Class A common stock, $5.07 billion of payments of dividends and dividend equivalents, and $13.77 billion of taxes paid related to net share settlement of RSUs, partially offset by $10.43 billion of net proceeds from the issuance of additional Notes in August 2024.
We anticipate making capital expenditures of approximately $115 billion to $135 billion in 2026 to support our AI efforts and core business. 77 Table of Contents Cash Used in Financing Activities Cash used in financing activities during 2025 mostly consisted of $26.25 billion for repurchases of our Class A common stock, $18.40 billion of taxes paid related to net share settlement of RSUs, and $5.32 billion of payments of dividends and dividend equivalents, partially offset by $29.91 billion net proceeds from the issuance of the Notes in November 2025.
See Note 7 — Property and Equipment in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information regarding depreciation expense.
For additional information, see Note 5 — Non-Marketable Equity Investments of the accompanying notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
For information regarding the change in useful lives of our servers and network assets, see Note 1 of the Notes to the Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K. 69 Table of Contents Components of Results of Operations Revenue Family of Apps (FoA) Advertising. We generate substantially all of our revenue from advertising.
For additional information regarding the change in useful lives of our servers and network assets, see Note 1 — Summary of Significant Accounting Policies in the accompanying notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. 70 Table of Contents Components of Results of Operations Revenue Family of Apps (FoA) Advertising.
The following table presents our cash flows (in millions): Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 91,328 $ 71,113 $ 50,475 Net cash used in investing activities $ (47,150) $ (24,495) $ (28,970) Net cash used in financing activities $ (40,781) $ (19,500) $ (22,136) Cash Provided by Operating Activities Cash provided by operating activities during 2024 mostly consisted of $62.36 billion net income adjusted for certain non-cash items, such as $16.69 billion of share-based compensation expense and $15.50 billion of depreciation and amortization expense.
The following table presents our cash flows (in millions): Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 115,800 $ 91,328 $ 71,113 Net cash used in investing activities $ (102,003) $ (47,150) $ (24,495) Net cash used in financing activities $ (20,370) $ (40,781) $ (19,500) Cash Provided by Operating Activities Cash provided by operating activities during 2025 mostly consisted of $60.46 billion net income adjusted for certain non-cash items, such as $20.43 billion of share-based compensation expense, $18.74 billion of deferred income taxes, and $18.62 billion of depreciation and amortization expense.
These trends adversely affected advertising revenue in 2024, and we expect will continue to affect our advertising revenue in the foreseeable future. 61 Table of Contents Although we regularly evaluate a variety of sources to understand trends in our advertising revenue, we do not have perfect visibility into the factors driving advertiser spending decisions and our assessments involve complex judgments about what is driving advertising decisions across a large and diversified advertiser base across the globe.
Although we regularly evaluate a variety of sources to understand trends in our advertising revenue, we do not have perfect visibility into the factors driving advertiser spending decisions and our assessments involve complex judgments about what is driving advertising decisions across a large and diversified advertiser base across the globe. Trends impacting advertising spend are also dynamic and interrelated.
Cash, cash equivalents, and marketable securities were $77.81 billion as of December 31, 2024, an increase of $12.41 billion from December 31, 2023. The increase was due to $91.33 billion of cash generated from operations and $10.43 billion of net proceeds from the issuance of fixed-rate senior unsecured notes (the Notes) in August 2024.
Cash, cash equivalents, and marketable securities were $81.59 billion as of December 31, 2025, an increase of $3.78 billion from December 31, 2024. The increase was due to $115.80 billion of cash generated from operations and $29.91 billion of net proceeds from the issuance of fixed-rate senior unsecured notes (the Notes) in November 2025.
ARPP: $10.68 $9.47 $10.42 $10.93 $12.33 $11.20 $11.89 $12.29 $14.25 Ad Revenue Non-Ad Revenue Note: We updated our definition of ARPP beginning in the first quarter of 2024 and have recast ARPP in prior periods for comparative purposes.
ARPP: $12.33 $11.20 $11.89 $12.29 $14.25 $12.36 $13.65 $14.46 $16.56 Note: We updated our definition of ARPP beginning in the first quarter of 2024 and have recast ARPP in prior periods for comparative purposes.
Cash Used in Investing Activities Cash used in investing activities during 2024 mostly consisted of $37.26 billion of purchases of property and equipment as we continued to invest in servers, data centers, and network infrastructure, and $9.75 billion of net purchases of marketable securities.
Cash Used in Investing Activities Cash used in investing activities during 2025 mostly consisted of $69.69 billion of purchases of property and equipment as we continued to invest in servers, data centers, and network infrastructure, and $18.33 billion of purchases of non-marketable equity investments, and $10.05 billion of net purchases of marketable securities.
Trends impacting advertising spend are also dynamic and interrelated. As a result, it is difficult to identify with precision which advertiser spending decisions are attributable to which trends, and we are unable to quantify the exact impact that each trend had on our advertising revenue during the periods presented.
As a result, it is difficult to identify with precision which advertiser spending decisions are attributable to which trends, and we are unable to quantify the exact impact that each trend had on our advertising revenue during the periods presented. 62 Table of Contents Investment Philosophy We remain focused on operating efficiently while investing in significant opportunities.
The increase in costs and expenses was mainly due to increases in operational expenses related to our data centers and technical infrastructure and employee compensation, partially offset by lower restructuring and legal-related costs. 59 Table of Contents Consolidated and Segment Results We report our financial results for our two reportable segments: Family of Apps (FoA) and Reality Labs (RL).
The increase in costs and expenses was mainly due to increases in employee compensation and infrastructure costs. 60 Table of Contents Consolidated and Segment Results We 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.
In addition, competitive products and services have reduced some users' engagement with our products and services. We are investing in Reels and in AI initiatives across our products, including our AI-powered discovery engine to recommend relevant content, which we have already seen results in improved user engagement and monetization of our products.
We are investing in Reels and in AI initiatives across our products, including our AI-powered discovery engine to recommend relevant content, which we have already seen results in improved user engagement and monetization of our products. However, we continue to face competition from other products and services within certain demographics, in particular younger users.
Using these constant rates for full year 2024, our total revenue and advertising revenue would have been $165.37 billion and $161.51 billion, which were $874 million and $880 million higher than actual total revenue and advertising revenue, respectively.
Using these constant rates for full year 2025, our total revenue and advertising revenue would have been $201.38 billion and $196.60 billion, which were $418 million and $420 million higher than actual total revenue and advertising revenue, respectively.
These increases were offset by $39.23 billion of capital expenditures, including principal payments on finance leases, our capital returns of $35.20 billion for repurchases of our Class A common stock and payments of dividends and dividend equivalents, and $13.77 billion of taxes paid related to net share settlement of employee restricted stock unit (RSU) awards.
These increases were partially offset by $72.22 billion of capital expenditures, which includes purchases of property and equipment and principal payments on finance leases; $31.57 billion of capital returns for repurchases of our Class A common stock and payments of dividends and dividend equivalents; $18.40 billion of taxes paid related to net share settlement of employee restricted stock unit (RSU) awards; and $18.33 billion of purchases of non-marketable equity investments.
The increase in FoA income from operations was driven by higher advertising revenue which was partially offset by an increase in costs and expenses.
The increase in FoA income from operations was driven by higher advertising revenue which was partially offset by an increase in costs and expenses. The increase in costs and expenses was primarily due to increases in employee compensation, infrastructure costs, costs associated with partner arrangements, and legal-related costs.
FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services. RL includes our virtual, augmented, and mixed reality related consumer hardware, software, and content.
RL includes our virtual and augmented reality related consumer hardware, software, and content.
Family of Apps Reality Labs Total Year Ended December 31, Year Ended December 31, Year Ended December 31, 2024 2023 % change 2024 2023 % change 2024 2023 % change (in millions, except percentages) Revenue $ 162,355 $ 133,006 22% $ 2,146 $ 1,896 13% $ 164,501 $ 134,902 22% Costs and expenses 75,246 70,135 7% 19,875 18,016 10% 95,121 88,151 8% Income (loss) from operations $ 87,109 $ 62,871 39% $ (17,729) $ (16,120) (10)% $ 69,380 $ 46,751 48% Operating margin 54 % 47 % (826) % (850) % 42 % 35 % • Net income was $62.36 billion, with diluted earnings per share (EPS) of $23.86 for the year ended December 31, 2024. • Capital expenditures, including principal payments on finance leases, were $39.23 billion for the year ended December 31, 2024. • Share repurchases of our Class A common stock were $29.75 billion and total dividend and dividend equivalent payments were $5.07 billion for the year ended December 31, 2024. • Cash, cash equivalents, and marketable securities were $77.81 billion as of December 31, 2024. • Long-term debt was $28.83 billion as of December 31, 2024. • Effective tax rate was 12% for the year ended December 31, 2024. • Headcount was 74,067 as of December 31, 2024, an increase of 10% year-over-year.
Family of Apps Reality Labs Total Year Ended December 31, Year Ended December 31, Year Ended December 31, 2025 2024 % change 2025 2024 % change 2025 2024 % change (in millions, except percentages) Revenue $ 198,759 $ 162,355 22% $ 2,207 $ 2,146 3% $ 200,966 $ 164,501 22% Costs and expenses 96,290 75,246 28% 21,400 19,875 8% 117,690 95,121 24% Income (loss) from operations $ 102,469 $ 87,109 18% $ (19,193) $ (17,729) (8)% $ 83,276 $ 69,380 20% Operating margin 52 % 54 % (870) % (826) % 41 % 42 % • Net income was $60.46 billion, with diluted earnings per share (EPS) of $23.49 for the year ended December 31, 2025. • Capital expenditures, including principal payments on finance leases, were $72.22 billion for the year ended December 31, 2025. • Share repurchases of our Class A common stock were $26.26 billion and total dividend and dividend equivalent payments were $5.32 billion for the year ended December 31, 2025. • Cash, cash equivalents, and marketable securities were $81.59 billion as of December 31, 2025. • Long-term debt was $58.74 billion as of December 31, 2025. • Effective tax rate was 30% for the year ended December 31, 2025.
In particular, we believe advertising budgets have been pressured from time to time by factors such as inflation, high interest rates, and related market uncertainty, which has led to reduced marketer spending. While we saw improvement in business and macroeconomic conditions in recent periods, continued business, macroeconomic, and geopolitical uncertainty remains, which could impact our financial results in future periods.
In particular, we believe advertising budgets have been pressured from time to time by factors such as inflation, economic policies and international trade, high interest rates, and related market uncertainty, which has led to reduced marketer spending.
As additional jurisdictions enact legislation, transitional relief expires, and other provisions of the minimum tax legislation become effective, our effective tax rate and cash tax payments could increase in future years. 75 Table of Contents Unrecognized Tax Benefits.
As additional jurisdictions enact legislation, transitional relief expires, and other provisions of the global minimum tax legislation become effective, our effective tax rate and cash tax payments could increase in future years. 76 Table of Contents Absent any changes to our tax landscape, we expect our effective tax rate for the full year 2026 to be in the range of 13-16%.
Revenue Seasonality Revenue is traditionally seasonally strong in the fourth quarter of each year due in part to seasonal holiday demand.
The increase was driven by an increase in sales of AI glasses, partially offset by a decrease in Meta Quest sales. Revenue Seasonality Revenue is traditionally seasonally strong in the fourth quarter of each year due in part to seasonal holiday demand.
These changes did not have a material impact on our consolidated financial statements for 2024. We continue to evaluate the impacts of proposed and enacted legislation with respect to the global minimum tax regime in the jurisdictions we operate in.
We continue to evaluate the impacts of proposed and enacted legislation with respect to the global minimum tax regime in the jurisdictions in which we operate.
Our actual and forecasted income (loss) before 68 Table of Contents provision is subject to change due to economic, political and other conditions and significant judgment is required in determining our ability to recognize our net deferred tax assets.
Our actual and forecasted income (loss) before provision is subject to change due to economic, political and other conditions and significant judgment is required in determining our ability to recognize our net deferred tax assets. 69 Table of Contents As a result of certain U.S. income tax provisions of the One Big Beautiful Bill Act enacted in July 2025, we expect to incur Corporate Alternative Minimum Tax (CAMT) beginning in 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+4 added−4 removed5 unchanged
Biggest changeOur marketable equity securities are publicly traded stocks and our non-marketable equity securities are investments in privately-held companies without readily determinable fair values. 79 Table of Contents We record marketable equity securities not accounted for under the equity method at fair value based on readily determinable market values, of which publicly traded stocks are subject to market price volatility and represent $1.23 billion of our investments as of December 31, 2024.
Biggest changeWe record marketable equity securities at fair value based on readily determinable market values, of which publicly traded stocks are subject to market price volatility and represent $5.99 billion and $1.23 billion of our investments as of December 31, 2025 and 2024, respectively.
Our cash, cash equivalents, and marketable debt securities consist of cash, time deposits, money market funds, U.S. government securities, U.S. government agency securities, and investment grade corporate debt securities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.
Our cash, cash equivalents, and marketable debt securities consist of cash, time deposits, money market funds, U.S. government and agency securities, and investment grade corporate debt securities. Our investment policy and strategy are focused on preservation of capital and supporting our liquidity requirements.
For additional information, see Note 1 — Summary of Significant Accounting Policies, Note 5 — Financial Instruments, Note 6 — Non-marketable Equity Securities, and Note 10 — Long-term Debt in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" and Part II, Item 7, "Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Critical Accounting Estimates" contained in this Annual Report on Form 10-K. 80 Table of Contents
For additional information, see Note 1 — Summary of Significant Accounting Policies, Note 4 — Financial Instruments, Note 5 — Non-Marketable Equity Investments, and Note 10 — Long-term Debt in the notes to the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data" and Part II, Item 7, "Management’s Discussion and Analysis of Financial Conditions and Results of Operations — Critical Accounting Estimates" contained in this Annual Report on Form 10-K. 81 Table of Contents
A hypothetical 100 basis point increase in market interest rates would have resulted in a decrease of $680 million and $355 million in the market value of our available-for-sale debt securities and cash equivalents as of December 31, 2024 and 2023, respectively.
A hypothetical 100 basis point increase in market interest rates would have resulted in a decrease of $711 million and $680 million in the market value of our available-for-sale debt securities and cash equivalents as of December 31, 2025 and 2024, respectively.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks, including changes to foreign currency exchange rates, interest rates, and equity price risk. Foreign Currency Exchange Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the Euro.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks, including changes to foreign currency exchange rates, interest rates, and equity price risk. Foreign Currency Exchange Risk We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, the majority of which is in Euro.
Any realized gains or losses resulting from such interest rate changes and from the current unrealized gains or losses would only occur if we sold the investments prior to maturity. As of December 31, 2024 and 2023, we also had aggregate principal amounts of fixed-rate senior notes (the Notes) outstanding of $29.0 billion and $18.50 billion, respectively.
Any realized gains or losses resulting from such interest rate changes and from the current unrealized gains or losses would only occur if we sold the investments prior to maturity. 80 Table of Contents As of December 31, 2025 and 2024, we also had aggregate principal amounts of fixed-rate senior notes (the Notes) outstanding of $59.0 billion and $29.0 billion, respectively.
Equity Price Risk Our equity investments include marketable and non-marketable equity securities subject to equity price risks that could have a material impact on the fair value or carrying value of our holdings.
Equity Price Risk Our equity investments include marketable and non-marketable equity investments subject to equity price risks that could have a material impact on the fair value or carrying value of our holdings. Our marketable equity securities are publicly traded stocks and our non-marketable equity investments are investments in privately-held companies without readily determinable fair values.
Uncertainties in the global economic climate and financial markets could adversely impact the valuation of the companies we invest in and, therefore, result in a material impairment or downward adjustment in our investments.
Valuations of our non-marketable equity investments are complex due to the lack of readily available market data and observable transactions. Uncertainties in the global economic climate and financial markets could adversely impact the valuation of the companies we invest in and, therefore, result in a material impairment or downward adjustment in these investments.
Foreign currency exchange net losses of $690 million, $366 million, and $81 million were recognized in 2024, 2023, and 2022, respectively. Interest Rate Sensitivity Our exposure to changes in interest rates relates primarily to interest income and market value of our cash equivalents, marketable debt securities, and the fair value of our long-term debt.
Realized gains, losses, and forward points for 2025 were not material and recorded within interest and other income, net in the consolidated statements of income. Interest Rate Sensitivity Our exposure to changes in interest rates relates primarily to interest income and market value of our cash equivalents, marketable debt securities, and the fair value of our long-term debt.
A hypothetical adverse price change of 10% on our December 31, 2024 balance would decrease the fair value of marketable equity securities by $123 million. We did not hold any marketable equity securities as of December 31, 2023.
A hypothetical adverse price change of 10% on our December 31, 2025 balance would decrease the fair value of marketable equity securities by $599 million. Our non-marketable equity investments accounted for under the measurement alternative are adjusted for changes in fair value resulting from observable transactions for identical or similar securities of the same issuer.
Removed
At this time, we have not entered into, but in the future we may enter into, derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk. It is difficult to predict the effect hedging activities would have on our results of operations.
Added
Foreign currency transaction gains, net were $352 million for the year ended December 31, 2025 and foreign currency transaction losses, net were $690 million, and $366 million for the years ended December 31, 2024 and 2023, respectively.
Removed
We elected to account for substantially all of our non-marketable equity securities using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar securities of the same issuer. We perform a qualitative assessment at each reporting date to determine whether there are triggering events for impairment.
Added
Beginning in 2025, we use short-term foreign currency forward contracts for cash management to reduce, but not entirely eliminate, exchange rate impacts on foreign currency cash conversions. These contracts are not designated as hedging instruments. As of December 31, 2025, no such contracts were outstanding.
Removed
The qualitative assessment considers factors such as, but not limited to, the investee's financial condition and business outlook; industry and sector performance; economic or technological environment; and other relevant events and factors affecting the investee. Valuations of our non-marketable equity securities are complex due to the lack of readily available market data and observable transactions.
Added
The carrying value of the non-marketable equity investments accounted for under the measurement alternative was $20.08 billion and $6.02 billion as of December 31, 2025 and 2024, respectively. The carrying value of our non-marketable equity method investments was $7.45 billion and $52 million as of December 31, 2025 and 2024, respectively.
Removed
Our total non-marketable equity securities, which mostly consists of our investment in Jio Platforms Limited, had a carrying value of $6.07 billion and $6.14 billion as of December 31, 2024 and 2023, respectively.
Added
These investments could be impaired if the carrying value exceeds the fair value and is not expected to recover.