Meta Platforms stock (META) gained more than 6% immediately after posting its fourth-quarter earnings, where it beat Wall Street expectations for revenues and profitability and posted strong expectations for first-quarter revenues, but once again raised the bar on expected infrastructure spending.
Revenues grew about 24% to $59.9B, vs. expectations for growth of about 21%. Amid expense/cost growth of 40%, operating income rose about 6%, to $24.75B (operating margin slimmed to 41% from a year-ago 48%).
Thanks to a lower effective tax rate, net income rose 9%, though, to $22.8B, and earnings per share also topped Street expectations.
“We had strong business performance in 2025,” said founder/CEO Mark Zuckerberg in his initial reaction to the report. “I’m looking forward to advancing personal superintelligence for people around the world in 2026.”
Revenue breakouts and operations
Nearly all of the company’s $59.9B in revenues comes from advertising, which rose to $58.1B. Adding other revenues meant sales for the company’s “Family of Apps” rose to $58.9B from $47.3B, while Reality Labs sales (in the company’s home for skunk-works research projects) dipped to $955M, below an estimate gathered by Bloomberg for $962.7M.
In operating numbers, fourth-quarter Daily Active People in the Family of Apps rose 7% year-over-year to 3.58B on average, while ad impressions rose 18% and average price per ad rose 6%.
(For the full year, ad impressions rose 12% and average price per ad rose 9%).
Capital spending and cash flow
Total costs and expenses rose 40% in Q4 to $35.15B and increased 24% for the full year to $117.7B.
Capital expenditures hit $22.14B in Q4, bringing the year’s total to $72.2B.
“We expect full-year 2026 total expenses to be in the range of $162B-169B,” said Chief Financial Officer Susan Li. “The majority of expense growth will be driven by infrastructure costs.”
That means the company expects 2026 capex in the range of $115B-$135B, “with year-over-year growth driven by increased investment to support our Meta Superintelligence Labs efforts and core business.”
Guidance
“Despite the meaningful step up in infrastructure investment, in 2026 we expect to deliver operating income that is above 2025 operating income,” Li said.
First-quarter revenue is forecast at $53.5B-$56.5B, above expectations for $51.4B, including about a 4% tailwind to revenue growth from foreign currency.
“Finally, we recently aligned with the European Commission on further changes to our Less Personalized Ads offering, which we will begin rolling out this quarter,” Li added. “However, we continue to monitor legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and financial results. For example, we continue to see scrutiny on youth-related issues and have a number of trials scheduled for this year in the U.S., which may ultimately result in a material loss.”
Seeking Alpha analyst Michael Del Monte highlighted the substantial gain in expenses and costs in Q4, along with an expected 73% increase in capital investments in 2026.
“Essentially, Meta is going all-in on AI development with the aim to advance its model development to compete with peers like Alphabet’s Gemini,” he noted in reaction to Meta’s report. “I believe this may add substantial risk to performance given Meta’s potential dependency on the success of AI development whereas peer hyperscalers like Google Cloud, Amazon AWS, and Microsoft Azure add value through cloud hosting with AI development being viewed as an added benefit.”
Conference call to come at 4:30 p.m. ET.