Financial Model Notes

Meta Platforms [META]

META — Financial Model Notes, 2026-07-29

Every figure in the valuation and research documents is reproducible from the steps below.

Data sources, in precedence order

8-K filed 2026-07-29, EX-99.1 (meta-06302026xexhibit991.htm) — Q2 2026 income statement, balance sheet, cash-flow statement, segment table (FoA / RL), operational metrics (impressions, price per ad, DAP), CFO outlook. This is the primary source for everything Q2 2026.
10-Q filed 2026-04-30 (meta-20260331.htm) — per-class share count from the cover page.
Alpha Vantage normalized statements — 66 quarterly / 19 annual periods, used for the long margin history and the TTM/EV-multiple time series.
AV EARNINGS_CALL_TRANSCRIPT with speaker/title — mention frequency and quoted concessions.
Alpaca weekly bars, adjustment=split — the EV/EBIT percentile series.

Fields explicitly REJECTED and why

Field	Reason
AV `ebitda`	Q2 2026 returns $18,756m, BELOW operating income of $18,775m, with positive cash-flow D&A of $6,356m. Arithmetically impossible.
AV `ebit`	Runs $334m–$1,355m above true operating income (+0.70pp to +2.64pp of margin); NONE for Q2 2026.
AV `longTermDebt`	Returns NONE for the latest quarter against a true $83,664m.
AV `OVERVIEW.SharesOutstanding`	2,196m = Class A only; omits 342.4m Class B.
AV `OVERVIEW.SharesFloat`	2,192.69m, i.e. 99.85% of the Class-A-only count — impossible for a company with insider-held Class B.
AV `commonStockSharesOutstanding`	Is the diluted WASO, not outstanding.

Formulas used

Operating margin = operatingIncome / totalRevenue. Never from ebit.
EBITDA = operatingIncome + |depreciationDepletionAndAmortization| from the CASH FLOW statement.
TTM = sum of the four most recent quarterly periods, verified to include Q4 (window 2025-09-30 … 2026-06-30; TTM revenue $228,248m).
EV = diluted shares × price − net cash(lease-inclusive). Net cash = cash + marketable securities − long-term debt − operating lease liabilities (current + non-current).
Terminal margin = opex bridge m_gross,T − R&D − S&M − G&A − other, all lines from the 8-K.
Exit multiple = (1−t)(1−g/ROIC)/(WACC−g); never a peer median.
Own-multiple percentile = 261 weekly observations of EV/TTM EBIT since 2021-08-02, with each week matched to the most recent TTM whose period end is at least 45 days earlier (to respect filing lag).

Key reconciliations that passed

Cash + marketable securities $15,462m + $74,798m = $90,260m = the release's "$90.26 billion". ✓
Net income / diluted EPS: $15,848m ÷ $6.18 = 2,564.4m vs filed diluted 2,566m (0.06%). ✓
Basic: $15,848m ÷ $6.23 = 2,543.8m vs filed 2,543m. ✓
Segment sum: FoA $23,394m + RL $(4,619)m = $18,775m = total income from operations. ✓
Revenue sum: FoA $60,370m + RL $431m = $60,801m = total revenue. ✓
AV shortLongTermDebtTotal $112,318m = LTD $83,664m + operating leases $28,654m exactly. ✓
av_vs_edgar.py --symbols META --quarters 6: VERIFIED, 4 comparisons, 0 disagreements — for revenue and net income only. It does not test ebit or ebitda, both of which are wrong.

Reproduction command for the valuation output

python3 ~/.claude/skills/investment-memo/assets/reverse_dcf.py \
  --spot 544.34 --shares 2566 --net-cash -22058 --revenue 228248 \
  --years 5 --wacc 0.085 --terminal-margin 0.395 --exit-multiple 17.4 --hist-cagr 0.185
# -> requires 6.3% vs 18.5% realised = +12.2pp

Known gaps, not modelled

Finance lease liability (not on the condensed balance sheet; $962m of principal paid in the quarter).
Restricted cash $13,107m in other assets, up 8x yoy, unexplained in the 8-K.
Hyperion VIE: maximum exposure to loss $45.99bn at Mar-2026, $28bn RVG threshold, no liability recorded, and the ~$27bn campus is OUTSIDE the reported capex guidance. Carried forward from the prior memo; not re-verified this run.

Generated from each name's analysis.json. Figures are research output, not investment advice. Gaps are shown as “—” rather than filled: a missing input is recorded as indeterminate, never estimated.