How Does Facebook (Meta) Use to Make Money?

Feb 23, 2024 By Susan Kelly

The company Meta also offers an environment that enables users to interact with one another via its Oculus virtual reality devices. As part of its overall strategy to expand the metaverse, the corporation is beginning to emphasize its augmented- and virtual-reality goods and services, among other things. Meta competes with other firms that sell advertising to marketers and companies that offer platforms for interacting and sharing information across users' numerous social networks. Meta is headquartered in San Francisco.



Meta's Financial Situation


Meta reported a net income of $10.3 billion on total sales of $33.7 billion in the fourth quarter of its fiscal year (FY) 2021, which concluded on December 31, 2021, for a net profit margin of 30.5 percent. The quarter was the last three months of the fiscal year (FY) 2021. Advertising income accounted for as much as 97 percent of total revenue, or $32.8 billion. The company's new Reality Labs sector (which is detailed in further detail below) contributed to the remaining 3 percent of revenues.


The Business Segments of Meta


As of the fourth quarter of the fiscal year 2021, Meta now divides its financial performance into the following two segments: Family of Apps (FoA), which includes the company's leading social media platform, Facebook, as well as Instagram. Family of Apps (FoA) comprises the company's central social media platform, Facebook, Instagram, Messenger, WhatsApp, and other services. Meta discloses facebook money and operating income for each sector in its financial statements. Before this move, the corporation only offered a breakdown of income by categories such as Advertising and Other revenues. It continues to give this breakdown under the aegis of the FoA section, though.



Family of Apps (FoA)


A component called "Family of Apps" (FoA) is responsible for collecting all of the cash generated by Meta through the sale of advertising to marketers, which accounts for roughly all of the company's overall revenue. Meta's primary social networking site, Facebook, and its related websites and mobile apps (such as Instagram, Messenger, and others) serve as display platforms for advertisements. Marketers get compensated for ads depending on the number of impressions provided or the number of actions consumers make, such as clicks on ads.


The financial services division generated $32.8 billion in sales in the fourth quarter of the fiscal year 2021, accounting for more than 97 percent of the company's total revenue. Compared to the prior year's quarter, payment for the division increased by 19.9 percent. The division generated an operating income of $15.9 billion, accounting for the whole of the company's operating income during the quarter under review. Operating income increased by 6.8 percent year on year.


Reality Labs


This section will find information on Meta's augmented- and virtual-reality devices, software, and content. The use of augmented and virtual reality technology is critical to the company's aim to expand the virtual world known as the metaverse, which is being developed. The Oculus virtual-reality headset is included in this area of the business. Before this move, the corporation only offered a breakdown of income by categories such as Advertising and Other revenues. It continues to give this breakdown under the aegis of the FoA section, though.


The Reality Labs business generated sales of $877 million in the fourth quarter of the fiscal year 2021, accounting for about 3% of total company revenue. Revenue for the sector climbed by 22.3 percent compared to the same quarter the previous year. It recorded an operational loss of $3.3 billion in the fourth quarter, lowering the company's total operating profits by the same amount. According to the section, the functional loss was much higher than the operating loss of $2.1 billion that the segment posted in the same quarter the previous year.


Recent Developments in Meta's Life


On February 2, 2022, Meta announced that its daily active users (DAUs) had decreased marginally compared to the previous quarter in a PowerPoint presentation of its statistics for the fourth quarter of the fiscal year 2021. Meta also issued sales estimates in its results press release for the fourth quarter of 2018. It predicted that its revenue for the first quarter of the fiscal year 2022 would be $27 billion to $29 billion. While this is a 3 percent to 11 percent year-on-year increase, it decreases the $33.7 billion in sales recorded in the previous quarter.

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