Analysis Meta Platforms Q4/FY2024

Last week, Meta Platforms ($META) released its Q4/FY2024 results.

Compared to FY2023, Meta increased its revenue by 21.9% in FY2024. Operating profits rose by 48.4% compared to FY2023. Meta's diluted EPS increased by 60.5%. The average revenue per user (ARPP) was $14.25 in Q4-2024, a 15.6% YoY increase.

The gap between the revenue growth (22%) and the operating profit growth (48%) is due to lower marketing and sales costs (-8%) as well as lower general and administrative expenses (-15%). Since Meta's revenue grew faster than its costs (which either increased at a slower pace or decreased), the company benefited from operational efficiencies.

On the Family of Apps—Meta's main engine—it achieved an operating profit of $87,109 million in FY2024. Reality Labs recorded an operating loss of $17,729 million last year. If you take only the TTM operating profit of the Family of Apps, which was $87,109 million (a 38.6% YoY increase), Meta, with a market capitalisation of $1.7 trillion on February 3, 2025, is trading at a multiple of 19.5x this operating profit.

Meta reported a net profit of $62,360 million in FY2024, which is a 59.5% increase compared to FY2023.

What remains of this net profit as free cash flow?

Meta generated cash flow from operating activities of $91,328 million in FY2024. From this, CAPEX still needs to be deducted, which was $37,256 million last year. Therefore, Meta's free cash flow (FCF) in FY2024 amounted to $54,072 million, which is 22.7% higher than in FY2023.

Adjusting for share-based compensation of $16,690 million (which increased by 19% YoY), the FCF minus SBC stands at $37,382 million, which is 24.4% higher than in FY2023. 

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