Summary:
Meta beat Q4 expectations on EPS and revenue, driven by strong advertising and Family of Apps performance. Reality Labs losses widened, while Q1 revenue guidance surprised to the upside. A higher 2026 capex outlook flags heavier long-term investment.
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Meta delivered a solid set of Q4 2025 earnings, beating expectations across headline earnings, revenue and advertising, while offering an upbeat near-term revenue outlook that reinforced confidence in its core platforms. However, ongoing losses at Reality Labs and a sharply higher capital expenditure forecast highlighted the cost of Meta’s long-term ambitions.
Earnings per share came in at $8.88, comfortably ahead of the $8.19 consensus estimate and up from $8.02 a year earlier. Revenue rose to $59.89 billion, exceeding expectations of $58.42 billion, as advertising demand remained resilient despite macro uncertainty.
Advertising revenue totalled $58.14 billion, topping the $56.79 billion forecast, reflecting strong engagement and improved monetisation across Meta’s platforms. The Family of Apps segment continued to anchor performance, generating $58.94 billion in revenue and $30.77 billion in operating income, both ahead of market estimates. Overall operating income rose 5.9% year-on-year to $24.75 billion, underscoring the benefits of cost controls implemented over the past year.
By contrast, Reality Labs remained a notable drag on group profitability. Revenue of $955 million narrowly missed expectations, while operating losses widened to $6.02 billion, exceeding the anticipated $5.8 billion loss. The division continues to weigh on margins as Meta invests heavily in virtual reality, augmented reality and related technologies.
Looking ahead, Meta guided Q1 revenue to $53.5 billion–$56.5 billion, well above the Street’s $51.27 billion forecast, signalling confidence in advertising momentum into early 2026. The company also lifted its 2026 capital expenditure outlook to $115 billion–$135 billion, above consensus, reflecting stepped-up investment in AI infrastructure and long-term growth initiatives.
This article was written by Eamonn Sheridan at investinglive.com.