Meta reported Q3 revenue of $51.2 billion, up 26% year over year and accelerating from 16% in Q1 and 22% in Q2 2025. Advertising accounted for 98% of total revenue, supported by a 14% increase in ad impressions and a 10% rise in average price per ad. Total daily active users climbed 8% to more than 3.5 billion. Operating income reached $20.5 billion (an 18% increase), while operating margin narrowed to 40% from 43% a year earlier as costs rose faster than sales.

Meta’s costs and expenses jumped 32% year over year in Q3, driven by a heavy investment cycle in AI-capable data centers. Capital expenditures totaled $19.4 billion for the quarter, contributing to free cash flow of $10.6 billion, down from $15.5 billion a year ago. CFO Susan Li guided that 2025 capex would reach $70 billion to $72 billion and that absolute capex growth and total expenses will grow at a significantly faster rate in 2026 as Meta scales its AI infrastructure further.

Despite 26% revenue growth and a strong net cash position (approximately $44.5 billion of cash and equivalents versus $29 billion of long-term debt), Meta shares trade at 22 times forward earnings—a discount to peers. One leading strategist reiterated a buy rating with a $910 price target, implying more than 40% upside from current levels. Investors are weighing near-term cash-flow compression against long-term AI opportunity and core advertising momentum.

Meta announced it will suspend teenage users from accessing its existing AI characters across all apps worldwide while it develops a new, age-appropriate iteration. The update follows parental feedback requesting greater control and transparency over teens’ interactions with AI. When relaunched, AI characters for under-18s will include customizable parental controls and be limited to educational and hobby-related topics.