Meta Platforms (NASDAQ:META) executives pointed to strong user growth, record holiday advertising demand, and a growing focus on artificial intelligence as the company closed out 2025 and outlined plans for 2026. On the company’s fourth-quarter earnings call, CEO Mark Zuckerberg described what he called a “major AI acceleration,” while CFO Susan Li detailed a sizable step-up in infrastructure spending and continued investment in technical talent.
User growth and product engagement trends
Zuckerberg said Meta ended 2025 with more than 3.5 billion people using at least one of its apps every day. He added that Facebook and WhatsApp each have more than 2 billion daily active users, with Instagram “just shy of that.”
On Facebook, Li said video time grew double digits year-over-year in the U.S. and that fourth-quarter optimizations produced a 7% lift in views of organic feed and video posts. She called it the largest quarterly revenue impact from Facebook product launches in the past two years. Li also said Meta increased the “freshness and originality” of content recommendations, including surfacing more same-day Reels on Facebook, and noted that 75% of recommendations on Instagram in the U.S. now come from original posts after a 10 percentage point increase in the prevalence of original content during the quarter.
Threads also saw engagement growth, with Li saying recommendation optimizations in Q4 drove a 20% lift in time spent.
Fourth-quarter financial results
Li reported fourth-quarter total revenue of $59.9 billion, up 24% year-over-year, or 23% on a constant currency basis. Total Family of Apps revenue was $58.9 billion, up 25%.
Advertising remained the primary contributor. Family of Apps ad revenue was $58.1 billion, up 24% year-over-year (23% on a constant currency basis). Li said ad impressions rose 18% and average price per ad increased 6%, with pricing benefiting from increased advertiser demand that was “largely driven by improved ad performance.”
Family of Apps other revenue was $801 million, up 54%, driven by WhatsApp paid messaging revenue growth and Meta Verified subscriptions.
Reality Labs revenue was $955 million, down 12% year-over-year. Li said the decline reflected lapping the introduction of Quest 3S in Q4 2024 and the timing of retail partner purchases that shifted some headset revenue into Q3 2025.
Meta posted operating income of $24.7 billion, representing a 41% operating margin. Net income was $22.8 billion, or $8.88 per share. Li also said interest and other income was $609 million, primarily due to unrealized gains on equity investments, and the quarter’s tax rate was 10%, slightly below the company’s 12% to 15% outlook due to the settlement of matters with tax authorities.
Expenses rose meaningfully. Total expenses were $35.1 billion, up 40% year-over-year, driven primarily by employee compensation, legal expenses, and infrastructure costs. Li said headcount ended the quarter at over 78,800 employees, up 6% year-over-year, with hiring focused on monetization, infrastructure, Meta Superintelligence Labs, regulation, and compliance.
Capital expenditures, including principal payments on finance leases, were $22.1 billion, driven by investments in data centers, servers, and network infrastructure. Free cash flow was $14.1 billion, and Meta ended the quarter with $81.6 billion in cash and marketable securities and $58.7 billion in debt.
AI strategy: “personal super intelligence,” agents, and compute investment
Zuckerberg said Meta rebuilt the foundations of its AI program in 2025 and expects to begin shipping new models and products over the coming months. He framed Meta’s longer-term vision as “building personal super intelligence,” emphasizing assistants and agents that understand personal context, including a user’s history, interests, content, and relationships.
He also said Meta is working to merge large language models with the recommendation systems that power Facebook, Instagram, Threads, and the company’s ad systems. Zuckerberg argued that recommendation systems are currently “primitive compared to what will be possible soon,” and that future systems may better understand individual goals and tailor experiences accordingly.
Li offered additional examples of AI-related product momentum, including AI dubbing of videos into local languages. She said Meta now supports nine languages, with hundreds of millions of people watching AI-translated videos every day, and indicated additional languages are planned this year. Li also said nearly 10% of the Reels people view each day are now created in Meta’s Edits app, “almost tripling from last quarter,” and that within Meta AI, daily actives generating media tripled year-over-year in Q4.
When asked about compute capacity, Li said Meta remains capacity constrained despite infrastructure ramp efforts in 2025, as demand for compute increased faster than supply. She said the company expects “significantly more capacity” in 2026 as it adds cloud capacity, but expects it will likely still be constrained through much of 2026 until additional capacity from Meta’s own facilities comes online later in the year.
Monetization updates: ads performance, messaging, and expanding inventory
Li said Meta’s monetization work includes tuning the timing and placement of ads and increasing conversions within the same overall ad load. She said that in the second half of 2025, Facebook initiatives to redistribute ads across users and sessions delivered a nearly four-times larger revenue impact than Facebook ad load increases.
Meta is also expanding advertising to newer services. Li said Threads ads are beginning to expand to all remaining countries “this month,” including the U.K., European Union, and Brazil. On WhatsApp, she said Meta expects to complete the rollout of ads in Status throughout the year, with the near-term ad level remaining low while the company optimizes formats and performance before ramping inventory.
On ad system performance, Li highlighted several AI-driven efforts, including doubling the number of GPUs used to train its GEM model for ads ranking and adopting a new sequence learning architecture. She said GEM and sequence learning improvements drove a 3.5% lift in ad clicks on Facebook and more than a 1% gain in conversions on Instagram in Q4. Li also described a new runtime model launched across Instagram Feed, Stories, and Reels that resulted in a 3% increase in conversion rates in Q4, and said model consolidation efforts under Lattice contributed to a 12% increase in ads quality.
Business messaging continued to scale. Li said click-to-message ads revenue growth accelerated in Q4, with the U.S. up more than 50% year-over-year, and WhatsApp paid messaging crossed a $2 billion annual run rate in Q4. She also noted early traction for “business AIs” in Mexico and the Philippines, with over 1 million weekly conversations between people and business AIs on Meta’s messaging platforms.
2026 outlook: revenue, spending, and regulatory risks
For the first quarter of 2026, Meta expects total revenue in a range of $53.5 billion to $56.5 billion, with guidance assuming foreign currency is an approximately 4% tailwind to year-over-year revenue growth based on current exchange rates.
For full-year 2026, Li guided to total expenses of $162 billion to $169 billion. She said the majority of expense growth will be driven by infrastructure costs, including third-party cloud spend, higher depreciation, and higher infrastructure operating expenses, while employee compensation is expected to be the second-largest driver due to technical talent investments.
Meta expects 2026 capital expenditures, including principal payments on finance leases, of $115 billion to $135 billion, with growth driven by investments supporting Meta Superintelligence Labs and the core business. Li said that despite the “meaningful step up” in infrastructure investment, Meta expects to deliver operating income in 2026 above 2025 operating income, and expects a full-year 2026 tax rate of 13% to 16%, absent changes to the tax landscape.
Li also said Meta recently aligned with the European Commission on further changes to its less personalized ads offering, which will begin rolling out in the current quarter, while cautioning that legal and regulatory headwinds in the EU and U.S. could significantly impact results. She referenced ongoing scrutiny related to youth issues and said Meta has a number of trials scheduled in the U.S. this year that “may ultimately result in a material loss.”
On capital allocation, Li said the company’s top priority is investing resources to position Meta as a leader in AI, and that share repurchases may vary depending on other capital needs.
About Meta Platforms (NASDAQ:META)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
