Item 1. Financial Statements

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Item 1. Financial Statements

META PLATFORMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares and par value)

(Unaudited)


	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	43,852	$	41,862
Marketable securities	27,048		23,541
Accounts receivable, net	14,700		16,169
Prepaid expenses and other current assets	5,467		3,793
Total current assets	91,067		85,365
Non-marketable equity securities	6,071		6,141
Property and equipment, net	112,162		96,587
Operating lease right-of-use assets	14,812		13,294
Goodwill	20,654		20,654
Other assets	11,642		7,582
Total assets	$	256,408	$	229,623

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	7,656	$	4,849
Operating lease liabilities, current	2,016		1,623
Accrued expenses and other current liabilities	23,658		25,488
Total current liabilities	33,330		31,960
Operating lease liabilities, non-current	18,208		17,226
Long-term debt	28,823		18,385
Long-term income taxes	9,171		7,514
Other liabilities	2,347		1,370
Total liabilities	91,879		76,455
Commitments and contingencies
Stockholders' equity:
Common stock, $0.000006 par value; 5,000 million Class A shares authorized, 2,180 million and 2,211 million shares issued and outstanding, as of September 30, 2024 and December 31, 2023, respectively; 4,141 million Class B shares authorized, 344 million and 350 million shares issued and outstanding, as of September 30, 2024 and December 31, 2023, respectively	—		—
Additional paid-in capital	80,749		73,253
Accumulated other comprehensive loss	(1,192)		(2,155)
Retained earnings	84,972		82,070
Total stockholders' equity	164,529		153,168
Total liabilities and stockholders' equity	$	256,408	$	229,623

See Accompanying Notes to Condensed Consolidated Financial Statements.

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$	40,589	$	34,146	$	116,116	$	94,791
Costs and expenses:
Cost of revenue	7,375		6,210		21,322		18,264
Research and development	11,177		9,241		31,693		27,966
Marketing and sales	2,822		2,877		8,107		9,075
General and administrative	1,865		2,070		8,978		9,119
Total costs and expenses	23,239		20,398		70,100		64,424
Income from operations	17,350		13,748		46,016		30,367
Interest and other income, net	472		272		1,095		254
Income before provision for income taxes	17,822		14,020		47,111		30,621
Provision for income taxes	2,134		2,437		5,589		5,540
Net income	$	15,688	$	11,583	$	41,522	$	25,081
Earnings per share:
Basic	$	6.20	$	4.50	$	16.37	$	9.73
Diluted	$	6.03	$	4.39	$	15.88	$	9.56
Weighted-average shares used to compute earnings per share:
Basic	2,529		2,576		2,536		2,577
Diluted	2,600		2,641		2,615		2,623

See Accompanying Notes to Condensed Consolidated Financial Statements.

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income	$	15,688	$	11,583	$	41,522	$	25,081
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax	937		(533)		243		(322)
Change in unrealized gain (loss) on available-for-sale investments and other, net of tax	566		83		720		296
Comprehensive income	$	17,191	$	11,133	$	42,485	$	25,055

See Accompanying Notes to Condensed Consolidated Financial Statements.

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended September 30, 2024													Three Months Ended September 30, 2023
	Class A and Class B Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total Stockholders' Equity		Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
	Shares	Par Value				Shares			Par Value
Balances at beginning of period	2,533	$	—	$	78,270		$	(2,695)		$	81,188	$	156,763	2,573	$	—	$	69,159	$	(3,106)	$	67,980	$	134,033
Issuance of common stock	16	—		—			—			—		—		17	—		—		—		—		—
Shares withheld related to net share settlement	(7)	—		(1,776)			—			(1,768)		(3,544)		(7)	—		(1,427)		—		(660)		(2,087)
Share-based compensation	—	—		4,250			—			—		4,250		—	—		3,492		—		—		3,492
Share repurchases	(18)	—		—			—			(8,856)		(8,856)		(12)	—		—		—		(3,698)		(3,698)
Dividends and dividend equivalents declared ($0.50 per share) (1)	—	—		—			—			(1,280)		(1,280)		—	—		—		—		—		—
Other	—	—		5			—			—		5		—	—		—		—		—		—
Other comprehensive income (loss)	—	—		—			1,503			—		1,503		—	—		—		(450)		—		(450)
Net income	—	—		—			—			15,688		15,688		—	—		—		—		11,583		11,583
Balances at end of period	2,524	$	—	$	80,749		$	(1,192)		$	84,972	$	164,529	2,571	$	—	$	71,224	$	(3,556)	$	75,205	$	142,873

	Nine Months Ended September 30, 2024													Nine Months Ended September 30, 2023
	Class A and Class B Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings		Total Stockholders' Equity		Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
	Shares	Par Value				Shares			Par Value
Balances at beginning of period	2,561	$	—	$	73,253		$	(2,155)		$	82,070	$	153,168	2,614	$	—	$	64,444	$	(3,530)	$	64,799	$	125,713
Issuance of common stock	49	—		—			—			—		—		49	—		—		—		—		—
Shares withheld related to net share settlement	(21)	—		(4,937)			—			(4,976)		(9,913)		(20)	—		(3,823)		—		(966)		(4,789)
Share-based compensation	—	—		12,428			—			—		12,428		—	—		10,603		—		—		10,603
Share repurchases	(65)	—		—			—			(29,807)		(29,807)		(72)	—		—		—		(13,709)		(13,709)
Dividends and dividend equivalents declared ($1.50 per share) (1)	—	—		—			—			(3,837)		(3,837)		—	—		—		—		—		—
Other	—	—		5			—			—		5		—	—		—		—		—		—
Other comprehensive income (loss)	—	—		—			963			—		963		—	—		—		(26)		—		(26)
Net income	—	—		—			—			41,522		41,522		—	—		—		—		25,081		25,081
Balances at end of period	2,524	$	—	$	80,749		$	(1,192)		$	84,972	$	164,529	2,571	$	—	$	71,224	$	(3,556)	$	75,205	$	142,873

(1)Our dividend program began in the first quarter of 2024.

See Accompanying Notes to Condensed Consolidated Financial Statements.

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities
Net income	$	41,522	$	25,081
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,038		8,006
Share-based compensation	12,428		10,603
Deferred income taxes	(3,406)		1,292
Impairment charges for facilities consolidation, net	288		1,342

Other	(82)		278
Changes in assets and liabilities:
Accounts receivable	1,493		444
Prepaid expenses and other current assets	(168)		(141)
Other assets	(70)		31
Accounts payable	(195)		(543)
Accrued expenses and other current liabilities	(1,199)		5,355
Other liabilities	1,691		(39)
Net cash provided by operating activities	63,340		51,709
Cash flows from investing activities
Purchases of property and equipment, net	(22,831)		(19,453)

Purchases of marketable debt securities	(14,644)		(1,810)
Sales and maturities of marketable debt securities	11,972		3,825

Acquisitions of businesses and intangible assets	(261)		(565)
Other investing activities	112		(20)
Net cash used in investing activities	(25,652)		(18,023)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards	(9,913)		(4,789)
Repurchases of Class A common stock	(30,125)		(13,832)
Payments for dividends and dividend equivalents	(3,802)		—
Proceeds from issuance of long-term debt, net	10,432		8,455
Principal payments on finance leases	(1,558)		(751)
Other financing activities	(350)		(182)
Net cash used in financing activities	(35,316)		(11,099)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(72)		(283)
Net increase in cash, cash equivalents, and restricted cash	2,300		22,304
Cash, cash equivalents, and restricted cash at beginning of the period	42,827		15,596
Cash, cash equivalents, and restricted cash at end of the period	$	45,127	$	37,900

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	43,852	$	36,890
Restricted cash, included in prepaid expenses and other current assets	90		152
Restricted cash, included in other assets	1,185		858
Total cash, cash equivalents, and restricted cash	$	45,127	$	37,900

See Accompanying Notes to Condensed Consolidated Financial Statements.

META PLATFORMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Supplemental cash flow data
Cash paid for income taxes, net	$	8,326	$	2,016
Cash paid for interest, net of amounts capitalized	$	356	$	302
Non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses and other current liabilities	$	7,217	$	4,506
Acquisition of businesses and intangible assets in accrued expenses and other current liabilities and other liabilities	$	186	$	182


Repurchases of Class A common stock in accrued expenses and other current liabilities	$	—	$	122

See Accompanying Notes to Condensed Consolidated Financial Statements.

META PLATFORMS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The condensed consolidated balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP.

The condensed consolidated financial statements include the accounts of Meta Platforms, Inc., its subsidiaries where we have controlling financial interests, and any variable interest entities for which we are deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated.

The accompanying condensed consolidated financial statements reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ending December 31, 2024.

Balance Sheets Reclassifications

Certain prior period amounts on the condensed consolidated balance sheets have been reclassified to conform to current period presentation.

Intangible assets, net was reclassified into other assets
Partners payable was reclassified into accrued expenses and other current liabilities
Long-term income taxes was reclassified out of other liabilities

These reclassifications had no impact on our previously reported total assets, total liabilities, revenue, income from operations, net income or cash flows.

Use of Estimates

Preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and judgments that affect the reported amounts in the condensed consolidated financial statements and accompanying notes. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. GAAP requires us to make estimates and judgments in several areas, including, but not limited to, those related to loss contingencies, income taxes, valuation of long-lived assets and their associated estimated useful lives, valuation of non-marketable equity securities, revenue recognition, valuation of goodwill, credit losses of available-for-sale debt securities and accounts receivable, and fair value of financial instruments and leases. These estimates are based on management's knowledge about current events, interpretation of regulations, and expectations about actions we may undertake in the future. Actual results could differ materially from those estimates.

Significant Accounting Policies

There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Note 2. Revenue

Revenue disaggregated by revenue source and by segment consists of the following (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Advertising	$	39,885	$	33,643	$	113,850	$	93,242
Other revenue	434		293		1,203		724
Family of Apps	40,319		33,936		115,053		93,966
Reality Labs	270		210		1,063		825
Total revenue	$	40,589	$	34,146	$	116,116	$	94,791

Revenue disaggregated by geography, based on the addresses of our customers, consists of the following (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
United States and Canada	$	15,619	$	12,908	$	43,906	$	36,761
Europe (1)	9,205		7,578		26,762		21,852
Asia-Pacific	11,243		9,790		32,522		25,634
Rest of World	4,522		3,870		12,926		10,544
Total revenue	$	40,589	$	34,146	$	116,116	$	94,791

(1)Europe includes Russia and Turkey, and Rest of World includes Africa, Latin America, and the Middle East.

Our total deferred revenue was $732 million and $675 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, we expect $704 million of our deferred revenue to be realized in less than a year.

Note 3. Restructuring

2022 Restructuring

In 2022, we initiated several measures to pursue greater efficiency and to realign our business and strategic priorities. These measures included a facilities consolidation strategy to sublease, early terminate, or abandon several office buildings under operating leases, a layoff of approximately 11,000 employees across the Family of Apps (FoA) and Reality Labs (RL) segments, and a pivot towards a next generation data center design, including cancellation of multiple data center projects (the 2022 Restructuring). We completed the data center initiatives and employee layoff in 2023. As of September 30, 2024, we have substantially completed the facilities consolidation initiatives.

A summary of our 2022 Restructuring pre-tax charges, including subsequent adjustments, is as follows (in millions):


	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023
	Facilities Consolidation		Facilities Consolidation		Severance and Other Personnel Costs		Data Center Assets (1)		Total
Cost of revenue	$	1	$	25	$	—	$	(12)	$	13
Research and development	5		228		2		—		230
Marketing and sales	1		54		1		—		55
General and administrative	1		45		1		—		46
Total	$	8	$	352	$	4	$	(12)	$	344

(1)Relates to changes in estimates in our data center restructuring charges recorded during 2022.


	Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023
	Facilities Consolidation		Facilities Consolidation		Severance and Other Personnel Costs		Data Center Assets (1)		Total
Cost of revenue	$	24	$	92	$	—	$	(232)	$	(140)
Research and development	191		871		(9)		—		862
Marketing and sales	42		233		(1)		—		232
General and administrative	38		210		(16)		—		194
Total	$	295	$	1,406	$	(26)	$	(232)	$	1,148

(1)Relates to changes in estimates in our data center restructuring charges recorded during 2022.


	Plan to Date
	Facilities Consolidation		Severance and Other Personnel Costs		Data Center Assets		Total
Cost of revenue	$	355	$	—	$	1,116	$	1,471
Research and development	3,083		399		—		3,482
Marketing and sales	842		233		—		1,075
General and administrative	816		316		—		1,132
Total	$	5,096	$	948	$	1,116	$	7,160

The 2022 Restructuring charges recorded to date under our FoA and RL segments were $6.07 billion and $1.09 billion, respectively.

Note 4. Earnings per Share

The holders of our Class A and Class B common stock (together, "common stock") have identical liquidation and dividend rights but different voting rights. Accordingly, we present the earnings per share (EPS) for Class A and Class B common stock together.

Basic EPS is computed by dividing net income by the weighted-average number of shares of our Class A and Class B common stock outstanding. Diluted EPS is computed by dividing net income by the weighted-average number of fully diluted common stock outstanding and assumes the conversion of our Class B common stock to Class A common stock.

For the three and nine months ended September 30, 2024, Class A common stock equivalent of restricted stock units (RSUs) that were excluded from the diluted EPS calculation were not material. For the three and nine months ended September 30, 2023, RSUs with an anti-dilutive effect were 5 million and 21 million shares, respectively.

The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in millions, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023 (2)		2024		2023 (2)
Basic EPS:
Numerator
Distributed earnings	$	1,263	$	—	$	3,802	$	—
Undistributed earnings	14,425		11,583		37,720		25,081
Net income	$	15,688	$	11,583	$	41,522	$	25,081
Denominator
Shares used in computation of basic EPS (1)	2,529		2,576		2,536		2,577
Basic EPS	$	6.20	$	4.50	$	16.37	$	9.73
Diluted EPS:
Numerator
Net income for diluted EPS	$	15,688	$	11,583	$	41,522	$	25,081
Denominator
Shares used in computation of basic EPS	2,529		2,576		2,536		2,577
Weighted-average effect of dilutive RSUs	71		65		79		46
Shares used in computation of diluted EPS	2,600		2,641		2,615		2,623
Diluted EPS	$	6.03	$	4.39	$	15.88	$	9.56

(1)Includes 2,184 million and 2,226 million shares of Class A common stock and 345 million and 350 million shares of Class B common stock, for the three months ended September 30, 2024 and 2023, respectively, and 2,190 million and 2,222 million shares of Class A common stock and 346 million and 355 million shares of Class B common stock, for the nine months ended September 30, 2024 and 2023, respectively.

(2)The prior period EPS for Class A and Class B common stock has been presented together to conform with current period presentation, which had no impact on our previously reported basic or diluted EPS.

We declared and paid quarterly cash dividends totaling $0.50 and $1.50 for each share of common stock during the three and nine months ended September 30, 2024, respectively. Total dividends and dividend equivalents paid were $1.09 billion and $3.28 billion for Class A common stock, and $172 million and $519 million for Class B common stock, during the three and nine months ended September 30, 2024, respectively. EPS for Class B common stock is not presented separately as under the two-class method Class A and Class B EPS is not meaningfully different.

Note 5. Financial Instruments

Fair Value Measurements

We classify our cash equivalents and marketable debt securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. Certain other assets are classified within Level 3 because factors used to develop the estimated fair value are unobservable inputs that are not supported by market activity.

The following tables summarize our assets measured at fair value on a recurring basis and the classification by level of input within the fair value hierarchy (in millions):


			Fair Value Measurement at Reporting Date Using
	September 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash	$	6,529
Cash equivalents:
Money market funds	36,172		$	36,172	$	—	$	—
U.S. government and agency securities	696		696		—		—

Time deposits	290		—		290		—
Corporate debt securities	165		—		165		—
Total cash and cash equivalents	43,852		36,868		455		—
Marketable securities:
U.S. government securities	11,314		11,314		—		—
U.S. government agency securities	2,998		2,998		—		—
Corporate debt securities	12,736		—		12,736		—

Total marketable securities	27,048		14,312		12,736		—
Restricted cash equivalents	1,153		1,153		—		—
Other assets	102		—		—		102
Total	$	72,155	$	52,333	$	13,191	$	102


			Fair Value Measurement at Reporting Date Using
	December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash	$	6,265
Cash equivalents:
Money market funds	32,910		$	32,910	$	—	$	—
U.S. government and agency securities	2,206		2,206		—		—

Time deposits	261		—		261		—
Corporate debt securities	220		—		220		—
Total cash and cash equivalents	41,862		35,116		481		—
Marketable securities:
U.S. government securities	8,439		8,439		—		—
U.S. government agency securities	3,498		3,498		—		—
Corporate debt securities	11,604		—		11,604		—

Total marketable securities	23,541		11,937		11,604		—
Restricted cash equivalents	857		857		—		—
Other assets	101		—		—		101
Total	$	66,361	$	47,910	$	12,085	$	101

Unrealized Losses

The following tables summarize our available-for-sale marketable debt securities and cash equivalents with unrealized losses as of September 30, 2024 and December 31, 2023, aggregated by major security type and the length of time that individual securities have been in a continuous loss position (in millions):


	September 30, 2024
	Less than 12 months				12 months or greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government securities	$	1,140	$	(2)	$	4,744	$	(126)	$	5,884	$	(128)
U.S. government agency securities	123		—		2,407		(63)		2,530		(63)
Corporate debt securities	504		(1)		7,031		(209)		7,535		(210)
Total	$	1,767	$	(3)	$	14,182	$	(398)	$	15,949	$	(401)


	December 31, 2023
	Less than 12 months				12 months or greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. government securities	$	336	$	(1)	$	7,041	$	(275)	$	7,377	$	(276)
U.S. government agency securities	71		—		3,225		(164)		3,296		(164)
Corporate debt securities	647		(3)		10,125		(491)		10,772		(494)
Total	$	1,054	$	(4)	$	20,391	$	(930)	$	21,445	$	(934)

The allowance for credit losses and the gross unrealized gains on our marketable debt securities were not material as of September 30, 2024 and December 31, 2023.

Contractual Maturities

The following table classifies our marketable debt securities by contractual maturities (in millions):


	September 30, 2024
Due within one year	$	7,546
Due after one year to five years	19,502
Total	$	27,048

Instruments Measured at Fair Value on Non-recurring Basis

Our non-marketable equity securities accounted for using the measurement alternative are measured at fair value on a non-recurring basis and are classified within Level 3 of the fair value hierarchy because we use significant unobservable inputs to estimate their fair value. During the three and nine months ended September 30, 2024 and 2023, changes in the fair value recorded for these non-marketable equity securities were not material.

Note 6. Non-marketable Equity Securities

Our non-marketable equity securities are investments in privately-held companies without readily determinable fair values. The following table summarizes our non-marketable equity securities that were measured using measurement alternative or equity method (in millions):


	September 30, 2024		December 31, 2023
Non-marketable equity securities under measurement alternative:
Initial cost	$	6,341	$	6,389
Cumulative upward adjustments	300		293
Cumulative impairment/downward adjustments	(623)		(599)
Carrying value	6,018		6,083
Non-marketable equity securities under equity method	53		58
Total	$	6,071	$	6,141

Note 7. Property and Equipment

Property and equipment, net consists of the following (in millions):


	September 30, 2024		December 31, 2023
Land	$	2,114	$	2,080
Servers and network assets	62,931		46,838
Buildings	45,392		37,961
Leasehold improvements	7,246		6,972
Equipment and other	6,929		7,416
Finance lease right-of-use assets	5,103		4,185
Construction in progress	23,301		24,269
Property and equipment, gross	153,016		129,721
Less: Accumulated depreciation	(40,854)		(33,134)
Property and equipment, net	$	112,162	$	96,587

Construction in progress includes costs mostly related to construction of data centers, network infrastructure and servers. Depreciation expenses on property and equipment were $3.96 billion and $2.83 billion for the three months ended September 30, 2024 and 2023, respectively, and $10.88 billion and $7.88 billion for the nine months ended September 30, 2024 and 2023, respectively. Within property and equipment, our servers and network assets depreciation expenses were $2.97 billion and $1.94 billion for the three months ended September 30, 2024 and 2023, respectively, and $7.96 billion and $5.16 billion for the nine months ended September 30, 2024 and 2023, respectively.

Note 8. Leases

The following tables summarize the components of operating lease costs and supplemental lease information (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Lease cost:
Operating lease cost	$	609	$	487	$	1,733	$	1,560
Variable lease cost and other	$	218	$	163	$	621	$	399


	Nine Months Ended September 30,
	2024		2023
Supplemental lease information:
Operating cash flows for operating leases	$	2,079	$	1,685
Operating lease liabilities arising from obtaining right-of-use assets	$	2,900	$	3,042

We also recorded impairment losses for operating lease right-of-use assets as a part of our facilities consolidation restructuring efforts of $8 million and $179 million for the three months ended September 30, 2024 and 2023, respectively, and $291 million and $990 million for the nine months ended September 30, 2024 and 2023, respectively. For additional information, see Note 3 — Restructuring.

As of September 30, 2024, future undiscounted lease payments under operating leases were $25.59 billion, with a weighted average remaining lease term of 11.4 years. As of September 30, 2024, we have additional operating leases, that have not yet commenced, with lease obligations of approximately $18.49 billion, mostly for data centers and colocations. These operating leases will commence between the remainder of 2024 and 2029 with lease terms of greater than one year to 25 years.

Note 9. Goodwill and Intangible Assets

As of September 30, 2024 and December 31, 2023, the total carrying amount of goodwill was $20.65 billion, of which $19.25 billion was allocated to our FoA segment and $1.41 billion was allocated to our RL segment.

The following table sets forth the major categories of the intangible assets and their weighted‑average remaining useful lives (in millions):


		September 30, 2024						December 31, 2023
	Weighted-Average Remaining Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired technology	4.5	$	445	$	(225)	$	220	$	478	$	(182)	$	296
Acquired patents	3.8	304		(207)		97		287		(233)		54
Other	2.9	273		(42)		231		28		(15)		13
Total finite-lived assets		1,022		(474)		548		793		(430)		363
Total indefinite-lived assets	N/A	425		—		425		425		—		425
Total intangible assets		$	1,447	$	(474)	$	973	$	1,218	$	(430)	$	788

Note 10. Long-term Debt

In August 2024, we issued an aggregate of $10.50 billion of fixed-rate senior unsecured notes in five series. As of September 30, 2024 and December 31, 2023, we had $29.0 billion and $18.50 billion of fixed-rate senior unsecured notes (the Notes), respectively. The following table summarizes the Notes and the carrying amount of our debt (in millions, except percentages):


	Maturity	Stated Interest Rate	Effective Interest Rate	September 30, 2024		December 31, 2023
August 2022 Notes:	2027 - 2062	3.50% - 4.65%	3.63% - 4.71%	$	10,000	$	10,000
May 2023 Notes:	2028 - 2063	4.60% - 5.75%	4.68% - 5.79%	8,500		8,500
August 2024 Notes:	2029 - 2064	4.30% - 5.55%	4.42% - 5.60%	10,500		—
Total face amount of long-term debt				29,000		18,500
Unamortized discount and issuance costs, net				(177)		(115)
Long-term debt				$	28,823	$	18,385

Each series of the Notes in the table above rank equally with each other. Interest on the Notes is payable semi-annually in arrears. We may redeem the Notes at any time, in whole or in part, at specified redemption prices. We are not subject to any financial covenants under the Notes. Interest expense, net of capitalized interest, recognized on the Notes was $200 million and $440 million for the three and nine months ended September 30, 2024, respectively, and $132 million and $291 million for the three and nine months ended September 30, 2023, respectively.

The total estimated fair value of our outstanding Notes was $29.53 billion and $18.48 billion as of September 30, 2024 and December 31, 2023, respectively. The fair value was determined based on the quoted prices for the Notes as of September 30, 2024 and December 31, 2023, respectively, and is categorized accordingly as Level 2 in the fair value hierarchy.

As of September 30, 2024, future principal payments for the Notes, by year, are as follows (in millions):


Remainder of 2024 through 2026	$	—
2027	2,750
2028	1,500
2029	1,000
Thereafter	23,750
Total outstanding Notes	$	29,000

Note 11. Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities are as follows (in millions):


	September 30, 2024		December 31, 2023
Legal-related accruals (1)	$	7,480	$	6,592
Accrued compensation and benefits	5,458		6,659
Accrued taxes	2,703		3,655
Accrued property and equipment	2,312		2,213
Other current liabilities	5,705		6,369
Total	$	23,658	$	25,488

(1)Includes accruals for estimated fines, settlements, or other losses in connection with legal and related matters, as well as other legal fees. For further information, see Legal and Related Matters in Note 12 — Commitments and Contingencies.

Note 12. Commitments and Contingencies

Contractual Commitments

We have $32.14 billion of non-cancelable contractual commitments as of September 30, 2024, which are mostly related to our investments in servers, network infrastructure, and consumer hardware products in Reality Labs. The following is a schedule, by years, of non-cancelable contractual commitments as of September 30, 2024 (in millions):


The remainder of 2024	$	11,321
2025	16,466
2026	1,022
2027	366
2028	208
Thereafter	2,756
Total	$	32,139

Additionally, as part of the normal course of business, we have entered into multi-year agreements to purchase renewable energy that do not specify a fixed or minimum volume commitment. We enter into these agreements in order to secure energy prices. Using the expected volume consumption, the total estimated spend related to our renewable energy agreements as of September 30, 2024 is approximately $18.01 billion, a majority of which is due beyond five years. The ultimate spend under these agreements may vary and will be based on actual volume purchased.

Legal and Related Matters

With respect to the cases, actions, and inquiries described below, we evaluate the associated developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated. In addition, we believe there is a reasonable possibility that we may incur a loss in some of these matters. Unless otherwise noted, with respect to the matters described below that do not include an estimate of the amount of loss or range of possible loss, such losses or range of possible losses either cannot be estimated or are not individually material, but we believe there is a reasonable possibility that they may be material in the aggregate.

We are also party to various other legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. Additionally, we are required to comply with various legal and regulatory obligations around the world. The requirements for complying with these obligations may be uncertain and subject to interpretation and enforcement by regulatory and other authorities, and any failure to comply with such obligations could eventually lead to asserted legal or regulatory action. With respect to these other legal proceedings, claims, regulatory, tax, or government inquiries and investigations, and other matters, asserted and unasserted, we evaluate the associated developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated. In addition, we believe there is a reasonable possibility that we may incur a loss in some of these other matters. We believe that the amount of losses or any estimable range of possible losses with respect to these other matters will not, either individually or in the aggregate, have a material adverse effect on our business and condensed consolidated financial statements.

The ultimate outcome of the legal and related matters described in this section, 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. Therefore, if one or more of these matters were resolved against us for amounts in excess of management's estimates of loss, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

For information regarding income tax contingencies, see Note 14 — Income Taxes.

Privacy and Related Matters

Beginning on March 20, 2018, multiple putative class actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging various causes of action in connection with our platform and user data practices as well as the misuse of certain data by a developer that shared such data with third parties in

violation of our terms and policies, and seeking unspecified damages and injunctive relief. With respect to the putative class actions alleging fraud and violations of consumer protection, privacy, and other laws in connection with the same matters, several of the cases brought on behalf of consumers in the United States were consolidated in the U.S. 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. On 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) and the objection is fully briefed, with the hearing date to be scheduled. 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. We entered into a settlement and modified consent order to resolve the FTC inquiry, which took effect in April 2020. Among other matters, our settlement with the FTC required us to pay a penalty of $5.0 billion which was paid in April 2020 upon the effectiveness of the modified consent order. The state attorneys general inquiries and litigation and certain government inquiries in other jurisdictions remain ongoing. Trial in the New Mexico Attorney General's case is scheduled to begin on May 12, 2025. On July 16, 2021, a stockholder derivative action was filed in Delaware Court of Chancery against certain of our directors and officers asserting breach of fiduciary duty and related claims relating to our historical platform and user data practices, as well as our settlement with the FTC. On July 20, 2021, other stockholders filed an amended derivative complaint in a related Delaware Chancery Court action, asserting breach of fiduciary duty and related claims against certain of our current and former directors and officers in connection with our historical platform and user data practices. On November 4, 2021, the lead plaintiffs filed a second amended and consolidated complaint in the stockholder derivative action. The pending consolidated matter is In re Facebook Inc. Derivative Litigation. On January 19, 2022, we filed a motion to dismiss, which was denied in part on May 10, 2023. 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.

On May 3, 2023, the FTC filed a public administrative proceeding (In the Matter of Facebook, Inc.) seeking substantial changes to the modified consent order, which took effect in April 2020 after its entry by the U.S. District Court for the District of Columbia. The changes sought by the FTC are set forth in a proposed order and include, among others, a prohibition on our use of minors' data for any commercial purposes, changes to the composition of our board of directors, and significant limitations on our ability to modify and launch new products. 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. 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 and the underlying appeal is fully briefed. Oral argument has been scheduled for November 5, 2024.

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. 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. On March 14, 2024, the district court denied our motion to preliminarily enjoin the FTC proceeding during the pendency of the litigation, and also denied the FTC's motion to dismiss our complaint without prejudice, pending the U.S. Supreme Court's decision in SEC v. Jarkesy (Jarkesy). Our motion for a stay of the FTC proceeding pending appeal was denied in March 2024. Both the district court action and the appeal were stayed pending the Supreme Court's decision in Jarkesy. Following the Supreme Court's ruling in Jarkesy on June 27, 2024, the government filed a renewed motion to dismiss, which is fully briefed as of October 18, 2024. 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.

On April 1, 2024, we filed our response to the FTC's Order to Show Cause, arguing, among other things, that the Order to Show Cause proceeding was legally improper. Per FTC orders, we completed briefing on threshold legal issues on July 18, 2024, and the FTC has scheduled oral argument before the Commissioners on those issues for November 12, 2024. 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. It is unclear whether the appeal or the request for a stay would be successful.

We also notify the Irish Data Protection Commission (IDPC), our lead European Union privacy regulator under the General Data Protection Regulation (GDPR), of certain other personal data breaches and privacy issues, and are subject to inquiries and investigations by the IDPC and other European regulators regarding various aspects of our regulatory compliance. For example, the IDPC is continuing to assess the compliance of our "subscription for no ads" consent model with requirements under the GDPR. In addition, on May 12, 2023, the IDPC issued a Final Decision concluding that Meta Platforms Ireland's reliance on Standard Contractual Clauses in respect of certain transfers of European Economic Area (EEA) Facebook user data was not in compliance with the GDPR. The IDPC issued an administrative fine of EUR €1.2 billion as well as corrective orders, which is described further in "Legal Proceedings" contained in Part II, Item 1 of this Quarterly Report on Form 10-Q. The interpretation of the GDPR is still evolving, including through decisions of the Court of Justice of the European Union, and draft decisions in investigations by the IDPC are subject to review by other European privacy regulators as part of the GDPR's cooperation and consistency mechanisms, which may lead to significant changes in the final outcome of such investigations. As a result, the interpretation and enforcement of the GDPR, as well as the imposition and amount of penalties for non-compliance, are subject to significant uncertainty. Although we are vigorously defending our regulatory compliance, we have accrued significant amounts for loss contingencies related to these inquiries and investigations in Europe, and we believe there is a reasonable possibility that additional accruals for losses related to these matters could be material individually or in the aggregate.

Beginning on June 7, 2021, multiple putative class actions were filed against us alleging that we improperly received individuals' information from third-party websites or apps via our business tools in violation of our terms and various state and federal laws and seeking unspecified damages and injunctive relief (for example, In re Meta Pixel Healthcare Litigation; In re Meta Pixel Tax Filing Cases; Frasco v. Flo Health, Inc.; Doe v. Hey Favor, Inc. et al.; Doe v. GoodRx Holdings, Inc. et al. in the U.S. District Court for the Northern District of California; and Rickwalder, et al. v. Meta Platforms, Inc. in the Santa Clara County Superior Court). 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.

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. 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. District Court for the District of Columbia alleging that we engaged in anticompetitive conduct and unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act and Section 2 of the Sherman Act, including by acquiring Instagram in 2012 and WhatsApp in 2014 and by maintaining conditions on access to our platform. The FTC sought a permanent injunction against our company's alleged violations of the antitrust laws, and other equitable relief, including divestiture or reconstruction of Instagram and WhatsApp. On June 28, 2021, the court granted our motion to dismiss the complaint filed by the FTC with leave to amend. On August 19, 2021, the FTC filed an amended complaint, and on October 4, 2021, we filed a motion to dismiss this amended complaint. On January 11, 2022, the court denied our motion to dismiss the FTC's amended complaint. 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. Briefing on the motions for summary judgment concluded on August 9, 2024. Multiple putative class actions have also been filed in state and federal courts in the United States and in the United Kingdom against us alleging violations of antitrust laws and other causes of action in connection with these acquisitions and/or other alleged anticompetitive conduct, and seeking damages and injunctive relief. 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. 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 motion to dismiss the first amended consolidated complaint filed 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. Although we are vigorously defending this matter, we have accrued a significant amount related to this matter and we believe there is a reasonable possibility that the ultimate losses in this matter could be material.

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. 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.

Securities and Other Actions

Beginning on March 20, 2018, multiple putative class actions and derivative actions were filed in state and federal courts in the United States and elsewhere against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with our platform and user data practices as well as the misuse of certain data by a developer that shared such data with third parties in violation of our terms and policies, and seeking unspecified damages and injunctive relief. Beginning on July 27, 2018, two putative class actions were filed in federal court in the United States against us and certain of our directors and officers alleging violations of securities laws in connection with the disclosure of our earnings results for the second quarter of 2018 and seeking unspecified damages. These two actions subsequently were transferred and consolidated in the U.S. District Court for the Northern District of California (In Re Facebook, Inc. Securities Litigation) with the putative securities class action described above relating to our platform and user data practices. In a series of orders in 2019 and 2020, the district court granted our motions to dismiss the plaintiffs' claims. On January 17, 2022, the plaintiffs filed a notice of appeal of the order dismissing their case, and on October 18, 2023, the U.S. Court of Appeals for the Ninth Circuit issued its decision affirming in part and reversing in part the district court's order dismissing the plaintiffs' case. We filed a petition for writ of certiorari on March 4, 2024 with the U.S. Supreme Court, seeking review of the Ninth Circuit's order. The Supreme Court granted in part our petition for writ of certiorari on June 10, 2024, and is scheduled to hear oral argument on November 6, 2024.

We are also subject to other government inquiries and investigations relating to our business activities and disclosure practices. For example, beginning in September 2021, we became subject to government investigations and requests relating to a former employee's allegations and release of internal company documents concerning, among other things, our algorithms, advertising and user metrics, and content enforcement practices, as well as misinformation and other undesirable activity on our platform, and user well-being. We have since received additional requests relating to these and other topics. Beginning on October 27, 2021, multiple putative class actions and derivative actions were filed in the U.S. District Court for the Northern District of California against us and certain of our directors and officers alleging violations of securities laws, breach of fiduciary duties, and other causes of action in connection with the same matters, and seeking unspecified damages (Ohio Pub. Empl. Ret. Sys. v. Meta Platforms, Inc.). On September 30, 2024, the court dismissed certain claims with leave to amend, but determined certain claims regarding content enforcement practices and user well-being could proceed against us and certain of our current and former directors and officers.

On March 8, 2022, a putative class action was filed in the U.S. District Court for the Northern District of California against us and certain of our directors and officers alleging violations of securities laws in connection with the disclosure of our earnings results for the fourth quarter of 2021 and seeking unspecified damages (Plumbers & Steamfitters Local 60 Pension Trust v. Meta Platforms, Inc.). On July 18, 2023, the court dismissed the claims against Meta and its officers with leave to amend. On September 18, 2023, the plaintiffs filed an amended complaint and on September 17, 2024, the court dismissed the claims with prejudice. On October 14, 2024, plaintiffs filed their notice of appeal.

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. 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, these U.S. federal cases were centralized in the U.S. District Court for the Northern District of California (In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation). Beginning in March 2023, U.S. states began filing lawsuits on these topics in various federal and state courts. These additional lawsuits include allegations regarding violations of the Children's Online Privacy Protection Act (COPPA), child sexual abuse material and other child safety concerns, as well as violations of state consumer protection laws, unfair business practices, public nuisance, and products liability, with proceedings focused on our alleged business practices (including the use of end-to-end encryption) and harms to users under 18 years old. These lawsuits seek damages and injunctive relief, and include cases filed by various

state attorneys general in In re Social Media Adolescent Addiction Product Liability Personal Injury Litigation in the U.S. District Court for the Northern District of California, as well as various state courts around the country.

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. On May 16, 2024, the European Commission opened formal proceedings assessing our compliance with certain requirements under Articles 28, 34, and 35 of the Digital Services Act (DSA), including the way in which we identified, assessed, and mitigated against certain systemic risks to minors and other vulnerable users that may stem from the design and functioning of Instagram and Facebook.

Other Actions

Beginning on August 15, 2018, multiple putative class actions were filed against us alleging that we inflated our estimates of the potential audience size for advertisements, resulting in artificially increased demand and higher prices. The cases were consolidated in the U.S. District Court for the Northern District of California (DZ Reserve v. Facebook, Inc.) and seek unspecified damages and injunctive relief. In a series of rulings in 2019, 2021, and 2022, the court dismissed certain of the plaintiffs' claims, but permitted their fraud and unfair competition claims to proceed. On March 29, 2022, the court granted the plaintiffs' motion for class certification. On March 21, 2024, the U.S. Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the order granting class certification. On May 3, 2024, we filed a petition for panel rehearing and rehearing en banc, which was denied by the Ninth Circuit. We filed a petition for a writ of certiorari with the U.S. Supreme Court on October 2, 2024.

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. and Chabon, et al. 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. 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. These cases have all been consolidated into Kadrey, et al. v. Meta Platforms, Inc.

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. 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.

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. 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.

In addition, we are subject to litigation and other proceedings involving law enforcement and other regulatory agencies, including in particular in Brazil, Russia, and other countries in Europe, in order to ascertain the precise scope of our legal obligations to comply with the requests of those agencies, including our obligation to disclose user information in particular circumstances. A number of such instances have resulted in the assessment of fines and penalties against us. We believe we have multiple legal grounds to satisfy these requests or prevail against associated fines and penalties, and we intend to vigorously defend such fines and penalties.

Note 13. Stockholders' Equity

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. As of December 31, 2023, $30.93 billion remained available and authorized for repurchases under this program. In January 2024, an additional $50 billion of repurchases was authorized under this program. During the nine months ended September 30, 2024, we repurchased and subsequently retired 65 million shares of our Class A common stock for an aggregate amount of $29.81 billion, which includes the 1% excise tax accruals as a result of the Inflation Reduction Act of 2022. As of September 30, 2024, $51.28 billion remained available and authorized for repurchases.

The timing and actual number of shares repurchased under the repurchase program depend on a variety of factors, including price, general business and market conditions, and other investment opportunities. Shares may be repurchased through open market purchases or privately negotiated transactions, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

Dividend

Beginning in February 2024, our board of directors declared quarterly cash dividends of $0.50 per share to the holders of our Class A and Class B common stock. 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 three and nine months ended September 30, 2024, total dividend and dividend equivalent payments were $1.09 billion and $3.28 billion for Class A common stock, and $172 million and $519 million for Class B common stock, respectively.

Subject to legally available funds and future declaration by our board of directors, we currently intend to continue to pay a quarterly cash dividend on our outstanding common stock. The declaration and payment of future dividends and dividend equivalents is at the sole discretion of our board of directors after taking into account various factors, including our financial condition, operating results, available cash, and current and anticipated cash needs.

Share-based Compensation Plan

As of September 30, 2024, there were 477 million shares of our Class A common stock reserved for future issuance under our Amended 2012 Plan.

The following table summarizes our share-based compensation expense, which consists of RSU expense, by line item in our condensed consolidated statements of income (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenue	$	266	$	183	$	775	$	536
Research and development	3,486		2,881		10,178		8,635
Marketing and sales	260		219		773		727
General and administrative	238		209		702		705
Total share-based compensation expense	$	4,250	$	3,492	$	12,428	$	10,603

The following table summarizes the activities for our unvested RSUs for the nine months ended September 30, 2024:


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
	(in thousands)
Unvested at December 31, 2023	149,062	$	209.85
Granted	45,343	$	501.88
Vested	(48,916)	$	245.36
Forfeited	(8,142)	$	246.92
Unvested at September 30, 2024	137,347	$	291.41

The fair value as of the respective vesting dates of RSUs that vested during the three months ended September 30, 2024 and 2023 was $8.53 billion and $5.23 billion, respectively, and $23.99 billion and $11.97 billion during the nine months ended September 30, 2024 and 2023, respectively. The income tax benefit recognized related to awards vested during the three months ended September 30, 2024 and 2023 was $1.81 billion and $1.11 billion, respectively, and $5.08 billion and $2.55 billion during the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there was $37.76 billion of unrecognized share-based compensation expense related to RSU awards. This unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately three years based on vesting under the award service conditions.

Note 14. Income Taxes

Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter, including excess tax benefits or shortfall tax expenses from share-based compensation and changes in unrecognized tax benefits. In each quarter, we update the estimated annual effective tax rate and make a year-to-date adjustment to the provision. The estimated annual effective tax rate is subject to significant volatility due to several factors, including our ability to accurately predict the proportion of our income (loss) before provision for income taxes in multiple jurisdictions, the U.S. tax benefits from foreign derived intangible income, and the effects of tax law changes.

Our gross unrecognized tax benefits were $14.13 billion and $11.67 billion as of September 30, 2024 and December 31, 2023, respectively. These unrecognized tax benefits were primarily accrued for the uncertainties with our research tax credits and transfer pricing with our foreign subsidiaries, which include licensing of intellectual property, providing services and other transactions. If the gross unrecognized tax benefits as of September 30, 2024 were realized in a future period, this would result in a tax benefit of $9.45 billion within our provision for income taxes at such time. The amount of interest and penalties accrued was $2.00 billion and $1.48 billion as of September 30, 2024 and December 31, 2023, respectively. We expect to continue to accrue unrecognized tax benefits for certain recurring tax positions.

In July 2016, we received a Statutory Notice of Deficiency (Notice) from the Internal Revenue Service (IRS) related to transfer pricing with our foreign subsidiaries in conjunction with the examination of the 2010 tax year. While the Notice applies only to the 2010 tax year, the IRS stated that it will also apply its position for tax years subsequent to 2010 and has done so in years covered by the second Notice described below. We do not agree with the position of the IRS and have filed a petition in the Tax Court challenging the Notice. On January 15, 2020, the IRS's amendment to answer was filed stating that it planned to assert at trial an adjustment that is higher than the adjustment stated in the Notice. The first session of the trial was completed in March 2020 and the final trial session was completed in August 2022. We expect the Tax Court to issue an opinion in 2024 which will likely provide a transfer pricing value for intellectual property transferred. This value will need to be extrapolated into income adjustments to determine the specific tax liability, which will likely remain in dispute and will not be resolved until the Tax Court enters a decision. If the IRS prevails in its updated position, this could result in an additional federal tax liability of an estimated, aggregate amount of up to approximately $9.0 billion in excess of the amounts in our originally filed U.S. return, plus interest and any penalties asserted. Once the Tax Court decision is entered, the IRS and Meta will each have the option to file an appeal to the Ninth Circuit Court of Appeals.

In March 2018, we received a second Notice from the IRS in conjunction with the examination of our 2011 through 2013 tax years. The IRS applied its position from the 2010 tax year to each of these years and also proposed new adjustments related to other transfer pricing with our foreign subsidiaries and certain tax credits that we claimed. If the IRS prevails in its position for these new adjustments, this could result in an additional federal tax liability of up to approximately $680 million in excess of the amounts in our originally filed U.S. returns, plus interest and any penalties asserted. We do not agree with the positions of the IRS in the second Notice and have filed a petition in the Tax Court challenging the second Notice.

We have previously accrued an estimated unrecognized tax benefit consistent with the guidance in Accounting Standards Codification (ASC) 740, Income Taxes, that is lower than the potential additional federal tax liability from the positions taken by the IRS in the two Notices and its Pretrial Memorandum. In addition, if the IRS prevails in its positions related to transfer pricing with our foreign subsidiaries, the additional tax that we would owe would be partially offset by a reduction in the tax that we owe under the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act. As of September 30, 2024, we have not resolved these matters and proceedings continue in the Tax Court.

Note 15. Segment Information

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. RL includes our virtual, augmented, and mixed reality related consumer hardware, software, and content. Our operating segments are the same as our reportable segments.

Revenue and costs and expenses are generally directly attributed to our segments. These costs and expenses include certain product development related operating expenses, costs associated with partnership arrangements, consumer hardware product costs, content costs, legal-related costs, and severance costs. Indirect costs are allocated to segments based on a reasonable allocation methodology, when such costs are significant to the performance measures of the operating segments. Indirect operating expenses, such as facilities, information technology, certain shared research and development activities, recruiting, physical security expenses, and certain restructuring costs, are mostly allocated based on headcount. Costs related to the operation of our data centers and technical infrastructure are generally allocated to our segments based on usage, most of which is allocated to the FoA segment.

The following table sets forth our segment information of revenue and income (loss) from operations (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue:
Family of Apps	$	40,319	$	33,936	$	115,053	$	93,966
Reality Labs	270		210		1,063		825
Total revenue	$	40,589	$	34,146	$	116,116	$	94,791

Income (loss) from operations:
Family of Apps	$	21,778	$	17,490	$	58,778	$	41,841
Reality Labs	(4,428)		(3,742)		(12,762)		(11,474)
Total income from operations	$	17,350	$	13,748	$	46,016	$	30,367

For information regarding revenue disaggregated by geography, see Note 2 — Revenue.

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