Meta reported fourth-quarter revenue growth of 24% year-over-year, reaching $59.9 billion, while adjusted EPS of $8.88 exceeded analyst consensus by roughly 9%. The company crossed the $200 billion revenue threshold for full-year 2025, marking its fastest top-line acceleration in four years. Management guided first-quarter 2026 revenue to grow in the high-20% range, driven by continued strength in ad sales and momentum in AI-enhanced ad targeting.

Ad revenue accounted for over 97% of total sales, with North American impressions up 26% versus last year despite a challenging consumer backdrop. Global ad pricing grew mid-teens percent, though U.S. and Asia pricing growth decelerated slightly against tough comps. The company cited new AI models that boost click-through rates by 10–15% on average, underpinning expectations for sustained ad spend by major brand advertisers.

Meta’s Reality Labs division recorded a $2.207 billion operating loss in 2025, the largest annual shortfall since the metaverse initiative began. In response, management announced 1,500 job cuts within Reality Labs and the closure of three virtual reality game studios. The company will redirect a portion of savings toward its smart glasses and wearables efforts, aiming for these categories to reach breakeven within two years.

Capital expenditures are projected to rise to $115–135 billion in 2026, up 65–94% year-over-year, driven by data-center build-out and custom chip development for generative AI services. Despite this step-up in spending, operating income is expected to exceed 2025 levels, reflecting high incremental margins on ad revenue. Free cash flow for 2026 is forecast in the single-digit billions, compared with over $116 billion generated in 2025, as the company balances near-term infrastructure investments with long-term profitability objectives.