Meta reports Q4 revenue of $59.89 billion, beating estimates

Meta stock rose 4% after hours on Wednesday after the company posted fourth-quarter revenue of $59.89 billion, blowing past Wall Street’s estimate of $58.59 billion.

Earnings per share came in at $8.88, also ahead of the $8.23 forecast. That pushed Meta into the green after markets closed.

The company’s founder and CEO, Mark Zuckerberg, called 2025 a strong year, saying, “We had strong business performance in 2025. I’m looking forward to advancing personal superintelligence for people around the world in 2026.”

Meta posts strong year-on-year gains across most metrics

For the full year, Meta brought in $200.97 billion in revenue, a 22% increase from 2024’s $164.5 billion. Q4 revenue alone surged 24% year-over-year, up from $48.39 billion in the same quarter last year.

But expenses also shot up. Costs for Q4 hit $35.15 billion, a 40% increase from last year. Annual costs rose 24% to $117.69 billion. Operating income for the quarter climbed to $24.75 billion, up just 6%, while full-year operating income landed at $83.28 billion, up 20% from 2024.

Meta’s operating margin shrank. In Q4 it dropped to 41% from 48% a year ago. The full-year margin also dipped slightly, from 42% to 41%.

Net income rose 9% in Q4 to $22.77 billion, but full-year net income actually fell 3% to $60.46 billion. Diluted earnings per share for the quarter rose 11%, from $8.02 to $8.88. For the full year, EPS ticked down slightly from $23.86 to $23.49.

The company’s effective tax rate for 2025 jumped from 12% to 30% due to the One Big Beautiful Bill Act passed during Q3. Without that change, the tax rate would have been 13%. Provision for income taxes climbed 207% over the year to $25.47 billion.

Engagement, ad impressions, and prices continue rising

Meta reported 3.58 billion daily active people (DAP) across its apps in December, up 7% from a year ago. Ad impressions increased 18% year-over-year in Q4 and 12% across the full year. The average price per ad went up 6% in Q4 and 9% for the year.

Capital spending reached $22.14 billion in Q4 and $72.22 billion in total for the year. The company ended the year with $81.59 billion in cash, equivalents, and marketable securities. Free cash flow stood at $14.08 billion in Q4, and $43.59 billion for the full year.

Operating cash flow hit $36.21 billion for the quarter and $115.8 billion for the year. Long-term debt totaled $58.74 billion by December 31, and headcount was 78,865, a 6% increase year-over-year.

Meta returned capital to shareholders with $26.26 billion in stock buybacks and $5.32 billion in dividend payments for the year. No buybacks were made in Q4, but $1.34 billion in dividends were paid out.

2026 forecast signals more spending and legal risks

The company expects Q1 2026 revenue to land between $53.5 billion and $56.5 billion, with foreign exchange adding a 4% boost. Full-year 2026 expenses are expected to fall between $162 billion and $169 billion, mostly due to bigger infrastructure costs and higher employee pay.

The biggest driver of that growth is spending on AI infrastructure, which includes third-party cloud, depreciation, and maintenance. The next largest factor is compensation, mostly for new technical hires brought on to support Meta’s AI push. Reality Labs will stay in the red, with no improvement expected over 2025.

Capital expenditures in 2026 are projected to jump to between $115 billion and $135 billion, fueled by investments into Meta Superintelligence Labs and core platforms. Despite these rising costs, the company believes it will report higher operating income than it did in 2025.

Meta’s estimated 2026 tax rate sits between 13% and 16%, assuming no further changes to U.S. tax policy.

On the regulatory front, Meta said it reached an agreement with the European Commission to roll out new Less Personalized Ads starting this quarter. But the company flagged ongoing risks from court cases in the U.S., especially around youth safety. Some of those could result in material losses, Meta warned.

Meta cuts Reality Labs, leans harder into AI devices

Earlier in January, Meta laid off more than 1,000 employees from its Reality Labs division. That move was part of a shift away from virtual reality and toward AI-powered hardware, including the Ray-Ban Meta smart glasses made with EssilorLuxottica.

Meta also shut down internal VR studios, prompting worries about a VR winter. Tech chief Andrew Bosworth pushed back on that idea, saying VR is still alive inside Meta, just slower than they expected. Last fall, instead of releasing a new Quest headset, Meta rolled out a new $799 Ray-Ban Display smart glasses with a built-in digital screen.