Earnings

Meta Q3 2025 Earnings - Core Brief Edition

30 Oct 2025 — 3 min read

1. Headline results

Revenue: $51.2B, +26% y/y (25% cc).
Operating income: $20.5B, 40% operating margin.
Net income was dragged by a one-time U.S. tax law charge; without it EPS would’ve been $7.25.
Family of Apps revenue: $50.8B, still the growth engine.
Cash & marketable securities: $44.4B; debt: $28.8B.

2. Users & engagement

Meta now reaches 3.5B people daily across the family of apps.
Instagram hit 3B MAUs — a major milestone.
Threads passed 150M DAUs and time spent rose 10% in Q3 thanks to ranking tweaks.
AI-powered recommendations kept people longer in the apps: +5% time on Facebook, +10% on Threads, and video time on Instagram is up >30% y/y.
Reels monetization is scaling — annual run-rate >$50B.

3. Ads engine = still working

Ad impressions +14% y/y.
Average price per ad +10% y/y — stronger advertiser demand, helped by better AI ranking.
End-to-end AI-powered ad tools now run at a $60B annualized pace.
Meta is consolidating hundreds of smaller ad/ranking models into a few large ones (“lattice”, Andromeda) to improve conversions and lower complexity.

4. AI strategy = front-load compute

Zuckerberg was very explicit: Meta wants to “aggressively front-load” infrastructure (data centers, GPUs, cloud) to be ready if frontier/superintelligence shows up sooner than consensus.
If AI arrives fast → Meta is positioned.
If it arrives slower → Meta will use the extra compute to improve core ads/recommendations, which are already “compute-starved.”
He said Meta now has “the highest talent density” in its new Meta Superintelligence Labs (MSL) and is training the next generation frontier models.
More than 1B people already use Meta AI monthly; usage rises every time they improve the model.

5. Reality Labs / devices

Reality Labs revenue: $470M, +74% y/y, helped by retailers stocking Quest earlier and strong AI glasses demand (Ray-Ban Meta, Oakley Meta).
BUT: Q4 Reality Labs revenue will be lower y/y because last year they launched Quest 3 in Q4 — they’re “lapping” that.
New AI display glasses sold out in 48 hours in most stores — Meta sees this as an area “where we are clearly leading.”

6. WhatsApp & business AI

WhatsApp paid messaging + Meta Verified supported “other revenue” ($690M, +59%).
Click-to-WhatsApp ads grew 60% y/y.
Meta is rolling out business AI agents (Philippines, Mexico, now wider) to let SMEs handle customer chats at low cost.

7. Guidance & 2026 setup

Q4 2025 revenue guide: $56–59B.
2025 expenses: now $116–118B (raised, mainly infra + AI hires + legal).
2025 capex: $70–72B (also raised).
Important: Meta said 2026 capex growth will be “notably larger” than 2025, and total expenses will also grow “significantly faster” — because AI/compute needs “expanded meaningfully.”
They may continue to use JV / partner financing (like with Blue Owl) to keep optionality on data centers.

8. Risks / regulatory

EU “less personalized ads” talks may force further changes and could hurt EU revenue as soon as this quarter.
U.S. youth-related cases in 2026 may be material.
So: strong core business → but heavier regulatory headwinds.

9. Core-Brief takeaway

This quarter was a classic “strong P&L + heavier AI capex talk”.
Engagement is doing the work → ads can still grow.
But the market will have to digest another leg up in 2026 spending because Meta wants to win the frontier-model race and then push those models through 3.5B users + 60B ads ARR.
In other words: they see more ROI than compute right now — so they’ll buy compute.