Meta reported 7% year-over-year growth in daily active users for Q4 FY25, reaching 3.58 billion across its Family of Apps. Ad impressions climbed 18% year-over-year as the company rolled out its Lattice and GEM AI models to optimize ad redistribution. In the U.S. market, Instagram Reels watch time soared 30% year-over-year, reflecting deeper sequence learning and longer interaction histories that are driving higher engagement and monetization opportunities.

In the quarter ended December 31, Meta delivered $59.9 billion in revenue, topping consensus guidance by $1.2 billion, and generated earnings per share of $8.88. Advertising revenue rose by 24% year-over-year, propelled by AI-driven targeting enhancements, while operating margins expanded to 45%, excluding Reality Labs performance. Free cash flow for the period was $9.5 billion, though this was tempered by record levels of capital expenditure.

Meta has guided to $115–135 billion in capital expenditures for 2026—a 74% increase over the prior year—as it builds out AI training clusters, high-capacity data centers and custom silicon. Management expects these investments to drive operating leverage beginning in 2027, forecasting core operating margins (excluding Reality Labs) of 52–54% once new infrastructure reaches full utilization. R&D spending will rise by approximately 70% this year, underlining the company’s commitment to maintaining its leadership in generative AI and machine-learning capabilities.

Reality Labs posted a loss of $3.8 billion in Q4, down from $4.2 billion a year earlier, suggesting that peak investment costs are behind the division. With smart-glasses development advancing to second-generation prototypes and consumer trials set to expand to key markets in mid-2026, management believes the segment can break even on an adjusted EBITDA basis by 2028. Long-term upside hinges on mixed-reality headset adoption, where early demand indicators point to a potential $10 billion annual revenue run-rate by 2030.