Meta continued to grow in Q3 2025. However, its share price fell amid analysts’ concerns over aggressive infrastructure spending. The company aims to advance personal superintelligence while enhancing app experiences and computing devices.
| Financial indicator | Q3 2024 (US$ million) | Q3 2025 (US$ million) | Percentage change |
| Revenue | 40,589 | 51,242 | +26.2% |
| Family of Apps | 40,319 | 50,772 | +25.9% |
| Reality Labs | 270 | 470 | +74.1% |
| Operating income | 17,350 | 20,535 | +18.4% |
| Net income | 15,688 | 2,709 | -82.7% |
| Adjusted net income | 15,688 | 18,600 | +18.6% |
Management estimated that over 3.5 billion people used at least one of Meta’s Family of Apps daily in September 2025. Improved AI recommendation systems drove stronger engagement across platforms, with time spent up 5% on Facebook, 10% on Threads, and video time on Instagram up more than 30% year-on-year in Q3 2025. Reels’ annual revenue run rate has now exceeded US$50 billion.
Revenue from Reality Labs surged 74.1% year-on-year to US$470 million in Q3 2025, driven by AI and smart glasses as well as retailers stocking up on Quest headsets ahead of the holiday season. The launch of the Quest 3S in Q4 2024 provides an easier year-on-year comparison.
During the quarter, total expenses increased 32.1% year-on-year to US$30.7 billion, driven by legal-related expense, employee compensation, and infrastructure costs.
Net income fell 82.7% year-on-year to US$2.7 billion in Q3 2025, primarily due to a one-time non-cash reduction in deferred tax assets totalling US$15.9 billion that was no longer usable under the new tax law. Excluding this charge, adjusted net income would have risen 18.6% year-on-year to US$18.6 billion.
According to CEO Mark Zuckerberg, Meta plans to invest aggressively in infrastructure to capture future opportunities. These investments are flexible and can be used for superintelligence, core business operations, or external demand. Zuckerberg emphasised a long-term approach: even in a ‘worst-case’ scenario, the pre-built infrastructure can be gradually utilised over time. Meta is pursuing a hybrid strategy, building its own data centres in stages while also leveraging third-party compute to meet future needs. Capital expenditures (CapEx), including finance lease principal payments, reached US$19.4 billion, driven by investments in servers, data centres, and network infrastructure to support growth.
Social media has evolved from friend-and-family content to creator-driven content, and AI is now enabling a new wave of easily generated and remixed content, expanding the available content ecosystem further.
Meta Superintelligence Labs is developing next-generation AI models, which will enhance user engagement, advertising performance, and enable AI-driven end-to-end ad automation.
Meta is consolidating its ads ranking and recommendation models into larger, unified systems to improve content understanding and drive higher ad conversion rates — a key focus heading into 2026. Its end-to-end AI ad tools, including Advantage+, now generate over US$60 billion in annual run-rate revenue, with advertisers using Advantage+ lead campaigns seeing an average 14% lower cost per lead. Management noted that Generative Ads Model (GEM) is now 4× more efficient than its original ranking models in driving ads performance improvements for a given amount of data and compute.
Meta expanded Business AI to the Philippines and Mexico and began testing in the US, positioning the product to help businesses scale messaging conversations and drive sales at low cost.
Meta is closely tracking regulatory matters in the EU, including potential changes to its Less Personalised Ads offering, and youth-related trials in the US, both of which could materially impact financial results.
Meta spent US$3.2 billion on share buybacks and US$1.3 billion on dividend payments in the September quarter. It ended the quarter with a net cash position of US$15.6 billion.
Revenue is expected to range between US$56 billion and US$59 billion, driven by a 1% foreign exchange tailwind and partially offset by lower revenue from Reality Labs due to the timing of headset launch which was already captured this quarter. The guidance for total expenses and CapEx for full-year 2025 has been revised upwards and these expenses are significantly larger in 2026 as the company invests ‘aggressively’ to meet AI needs such as Meta Superintelligent Labs.
Family of Apps
The number of daily active people across its Family of Apps grew 8% year-on-year during the September quarter.
The number of ad impressions overall grew 14% in Q3 2025. Healthy impression growth across all regions (8% in North America) was driven by growth in engagement and user, particularly on video surfaces.
During the quarter, Family of Apps ad revenue increased 25.6% year-on-year to US$50.1 billion, driven by broad-based advertising revenue growth. Family of Apps other revenue surged 59.0% year-on-year to US$690 million, driven by WhatsApp paid messaging and Meta Verified subscriptions.
Average price per ad rose 10% year-on-year, supported by stronger advertiser demand driven by improved ad performance. This was partly offset by an increase in impressions, particularly from regions and surfaces with lower monetisation. Notably, weighted conversions continued to outpace impression growth.
Facebook and Instagram
Users globally spent more time on Facebook and Instagram in Q3 2025. In the US, time spent on these two apps grew by double digits year-on-year, helped by Meta’s systems surfacing newer, same-day Reels and by continued growth in non-video time on Facebook. Meta is also enhancing its recommendation systems and model architectures, using more advanced modelling techniques to better match content to user interests.
Meta’s retrieval and early-stage ranking improvements drove a 14% increase in ads quality on Facebook surfaces, while enhancements to its foundational ads models delivered over a 2% lift in conversions on Instagram. The number of monthly active users on Instagram surpassed 3 billion.
WhatsApp and Messengers
Management continues to see opportunities in WhatsApp business messaging as well as ads supply opportunities within WhatsApp Status in the upcoming year.
Threads and Meta AI
Threads serves 150 million daily active users and is on track to overtake X as the category leader. Management began rolling out ads in the Feed globally, a typical step once an app matures and its ad formats and performance have been optimised.
Meta AI now reaches over a billion monthly users across its apps, increasingly integrating first-party content such as Reels into responses. Media generation is gaining strong traction, with over 20 billion images created and in-app usage of Vibes, the short-form AI video creation tool, growing more than tenfold since its September launch. Model quality continues to improve, notably through post-training updates to Llama 4, driving accelerated daily active user growth as users experiment with AI-assisted content.
Reality Labs
Meta highlighted its new Ray-Ban Meta glasses and Oakley Meta Vanguards announced at Connect. Management said initial demand has been strong and that production capacity will be increased accordingly. Zuckerberg views AI glasses like Meta Ray-Ban Display glasses as still early in their adoption curve but believes they will become a highly profitable category over time. AI glasses remain the core focus for Reality Labs, which the company sees as the most natural hardware platform for future AI experiences.
Key analyst questions
Meta is in the early stages of multi-year capacity planning, with budgets and targets still under development. It is still capacity-constrained despite being ‘aggressive’ in planning this year. Zuckerberg emphasised the long-term potential of AI to enhance Meta’s core business and enable new products, but provided few concrete metrics or near-term guidance, leaving uncertainty for investors. Meta’s near-term profitability could be affected, which triggered the recent share sell-off.
CFO Susan Li noted that infrastructure spending will be the largest driver of 2026 expense growth, including higher cloud costs and rising depreciation as new capacity comes online. Employee compensation, mainly from this year’s AI hires, is the second-largest contributor. Meta is now reorganising Meta Superintelligence Labs for efficiency, while 2026 headcount growth will be targeted toward priority areas like monetisation, infrastructure, and AI. She also added that Meta uses large foundational models to improve smaller runtime models, and even modest gains in ad performance can meaningfully grow revenue due to the large advertiser base.
Meta is partnering with Blue Owl Capital to build data centres, recording only its 20% share of costs as investing cash flows instead of full CapEx.
Ads impression in North America grew 8% year-on-year but decelerated sequentially by one point according to Vice President of Finance, Chad Heaton. As users spent more time watching videos, and videos naturally support fewer ads per minute than feed content.
Gaming revenue in Q3 2025 grew meaningfully year-on-year, driven by stronger demand from U.S. and Asia-based advertisers. The growth also benefited from lapping a period of weaker gaming spend from Asia-based advertisers in Q3 2024.
The fifth perspective
As macro conditions remain supportive, Meta continues to strengthen user engagement and monetisation efficiency. However, its non-core and AI investments will take time to monetise and are not expected to contribute meaningfully in the near term.
