Meta Platforms (META) recorded a $16B one-time charge from the implementation of a recently signed tax bill, which impacted the company’s bottom line in the third quarter, and the social media and AI tech giant warned of burgeoning costs next year.
Shares of the company are down 7% in the after-hours of trading on Thursday.
Meta said it will “spend aggressively” next year, warning its capital expenditures will be “notably larger” in 2026 and total expenses will grow at a “significantly faster percentage rate,” as the company pushes to become a frontrunner in AI technology and infrastructure and works to bring the required computing power online.
For 2025, the company expects capital spending in the range of $70B-$72B, increased from its prior outlook of $66B-$72B, and total expenses to be in the range of $116B-$118B, up from $114B-$118B.
For the fourth quarter, Meta guided revenue in the range of $56B – $59B (midpoint $57.5B; est. $57.26B) and assumed forex to be a 1% tailwind to year-over-year total revenue growth.
In Q3, costs and expenses surged 32% to $30.71B, as R&D expenses went up.
Daily Active People in the Family of Apps averaged 3.54B for September, up 8% from the prior year. Ad impressions rose 14%, and the average price per ad rose 10%.
Net income for the three months ended September 30 was $2.71B, or $1.05 per share, compared to $15.69B, or $6.03 per share, in the same period last year.
Excluding the one-time charge, net income would have been $18.64B, or $7.25 per share.
Revenue grew 26% to $51.56B and beat the consensus estimate of $49.59B.
For the remainder of 2025 and future years, the company expects significantly lower taxes due to the implementation of President Donald Trump’s “One Big Beautiful Bill Act.”
“Meta should realize improved margins resulting from reduced cash taxes for Q4’25 following the passage of the One Big Beautiful Bill Act,” Seeking Alpha analyst Michael Del Monte said in his immediate reaction to the report.