Meta posts record revenue but misses on earnings
Meta fell after reporting earnings Wednesday evening, as capex spending and operating expenses rise.
Meta reported record quarterly revenue of $51.2 billion, beating analysts’ expectations of $49.5 billion for the third quarter, but its diluted earnings per share of $1.05 were far below the FactSet analyst consensus estimate of $6.72.
The big bottom-line miss stems from Meta setting aside cash for future income taxes, which forced it to book a one-time, noncash $15.9 billion tax charge this quarter. Without that one-off hit, Meta said diluted earnings per share would have been $7.25.
The stock plummeted more than 7% after-hours on the report, and hasn’t recovered in early trading on Thursday, with Meta’s stock down 8.4% as of 6:06 a.m. ET. Prior to earnings, the stock had risen 28% in 2025.
The company’s much-watched capital expenditures also hit a record high of $19.37 billion in the third quarter, up from $17.01 billion in the second quarter. Meta now expects its full-year capex to be $70 billion to $72 billion, increased from its previous guidance of $66 billion to $72 billion, as the company pours billions into data centers to power its AI ambitions in an attempt to reach so-called superintelligence. The company finds itself on its heels after a botched rollout of its flagship Llama 4 model, which led to a series of shake-ups on its AI teams in a big gamble to get back into the AI race.
The social media company’s ad revenue, which constitutes nearly all of its sales, hit $50.1 billion, versus analysts’ expectations of $48.5 billion.
Meta’s standardized capital expenditure now makes up a record nearly 38% of its sales, compared with analysts’ estimates of 37.2%. CEO Mark Zuckerberg has said such spending is worth it.
“The risk, at least for a company like Meta, is probably in not being aggressive enough rather than being somewhat too aggressive,” he recently told a podcast interviewer.
On Meta’s third-quarter earnings call, Zuckerberg said that AI continues to help the company improve ad revenue.
The company expects fourth-quarter 2025 total revenue to be in the range of $56 billion to $59 billion. The outlook “reflects an expectation for continued strong ad revenue growth, partially offset by lower year-over-year Reality Labs revenue in the fourth quarter.”
Reality Labs represents another area where the company is hoping AI will eventually pay off, but so far that hasn’t happened.
The company’s Reality Labs unit, which includes its Ray-Ban Meta smart glasses, brought in $470 million in revenue (versus the $317 million expected) and posted operating losses of $4.4 billion last quarter (less than the expected $5.18 billion) for a total of more than $70 billion in losses since it first began reporting those numbers in Q4 2020.
