TLDR
- Meta’s Q3 revenue jumps 26% to $51.24B despite tax-driven profit slump.
- $15.9B one-time tax hit cuts Meta’s net income by 83% year-over-year.
- AI and infra push drives $19.4B in capex, with more spending ahead.
- User base hits 3.54B; ad prices and impressions rise double digits.
- Meta eyes 2026 AI boom despite regulatory and cost headwinds.
Meta Platforms, Inc. (Nasdaq: META) shares stock initially closed slightly up at $751.67, an increase of 0.03%.
Meta Platforms, Inc., META
The company posted a 26% year-over-year revenue growth for Q3 2025, hitting $51.24 billion. Profit fell sharply due to a one-time tax charge that impacted the bottom line. Despite the drop in net income, the company reaffirmed its long-term strategy, powered by infrastructure and AI development.
Net Income Drops Amid One-Time Tax Charge
Meta’s Q3 net income dropped 83% to $2.71 billion, primarily due to a $15.93 billion non-cash tax adjustment. This adjustment resulted from the implementation of new U.S. tax regulations related to the valuation of deferred tax assets. Without the charge, net income would have reached $18.64 billion, with adjusted earnings per share of $7.25.
The reported effective tax rate surged to 87%, compared to just 12% last year. Excluding the tax impact, the adjusted effective tax rate would have remained at a manageable 14%. Meta noted this does not affect its cash tax obligations, which are expected to stay low in future quarters.
Although operating income rose 18% to $20.54 billion, the operating margin dipped to 40% from 43%. Higher expenses, including expanding headcount and infrastructure investments, contributed to margin compression. Total costs and expenses increased 32% year-over-year, reaching $30.71 billion.
User Growth, Ad Pricing, and Cash Position Strengthen
The number of daily active people reached 3.54 billion in September 2025, representing an 8% annual growth. Meta’s ad ecosystem continued to thrive, with impressions up 14% and average ad prices up 10% year-over-year. This ad momentum drove the strong top-line growth despite regulatory uncertainties.
Cash, cash equivalents and marketable securities stood at $44.45 billion at quarter-end. Operating cash flow reached $30 billion, while free cash flow came in at $10.62 billion. Meta returned $4.49 billion to shareholders through buybacks and dividends during the quarter.
Capital expenditures totaled $19.37 billion, showing the company’s aggressive push into data and compute infrastructure. Share repurchases amounted to $3.16 billion, and dividend payments added up to $1.33 billion. Headcount rose 8% to 78,450, with a focus on technical and AI roles.
AI Infrastructure to Drive Higher Spending in 2026
Meta expects Q4 2025 revenue between $56–59 billion, driven by ongoing ad demand and seasonal momentum. Reality Labs revenue may dip due to last year’s Quest 3S launch and early retail stocking this year. Currency movements are expected to be a modest 1% revenue tailwind.
Total 2025 expenses are now forecasted at $116–118 billion, up slightly from previous guidance. Capital expenditure guidance increased to $70–72 billion, reflecting greater infrastructure investment needs. Meta plans to accelerate spending in 2026 as compute demands grow.
The company signaled sharper expense growth in 2026, driven by AI-related infrastructure and cloud capacity expansion. Higher depreciation and full-year compensation for 2025 hires will also push up costs. Meanwhile, regulatory challenges in the EU and youth-related legal matters in the U.S. pose potential risks.
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