Meta delivered a solid Q4 FY25 report, with daily active users rising 7% year-over-year to 3.58 billion, marking the highest growth rate in two years. Revenue grew by 24% compared to the same quarter last year, driven primarily by advertising across the Family of Apps. Quarterly earnings per share jumped by 31% year-over-year, reflecting disciplined cost management and strong top-line leverage, while reality-lab losses narrowed by 15%, suggesting that augmented- and mixed-reality investments may be approaching an inflection point.

AI investments are beginning to pay off in advertising performance and user engagement. Ad impressions increased by 18% year-over-year thanks to new allocation algorithms powered by the Lattice and GEM machine-learning models, which optimize placement and creative selection in real time. On Instagram Reels, U.S. watch time surged 30% year-over-year, driven by advanced sequence-learning techniques that deepen session lengths and boost monetizable views. These efficiency gains have already translated into a 12% lift in average revenue per person across Meta’s platforms.

Management guided for a substantial increase in capital expenditures for 2026, raising infrastructure spending to between $115 billion and $135 billion—up roughly 70% from 2025 levels—to build out AI data centers and next-generation connectivity. Operating expenses are also expected to rise into the $162 billion to $169 billion range. While near-term free cash flow is projected to be tightly constrained at around $5 billion, the company forecasts core operating margins, excluding reality-lab losses, to remain above 50% as AI-driven automation and scale advantages begin to materialize in 2027.