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Meta Platforms (META) delivered a powerful third quarter, with revenue climbing 26% year-over-year to $51.2 billion. Advertising contributed $50.1 billion, supported by robust engagement across Facebook, Instagram, and Threads. Despite a 32% rise in expenses, operating margins held firm at 40%, highlighting Meta’s balance between rapid AI investment and profitability.

CEO Mark Zuckerberg emphasized that Meta’s evolution into a frontier AI company is “the right strategy to aggressively front-load building capacity” for the next computing era. With 3.5 billion daily users across its apps, Meta continues to see engagement surge — Instagram now counts 3 billion monthly actives, and Threads’ daily users reached 150 million, with time spent up 10% in Q3. Reels remains a major growth engine, now at a $50 billion annual run rate, while Meta’s AI-driven ad tools surpassed $60 billion in annualized revenue.

Zuckerberg described Meta’s three key “transformers” — AI systems powering Facebook, Instagram, and Ads — that the company plans to unify into a single intelligence model optimizing “trillions of recommendations daily.”

Meta AI, now with over 1 billion monthly users, is central to this vision. He sees Meta’s Superintelligence Lab as building “the highest talent density in the industry,” focused on developing next-generation models and devices, including the new AI-powered Ray-Ban and Oakley smart glasses, which sold out within 48 hours of launch.

CFO Susan Li reported strong financial momentum but cautioned that investments will accelerate. Capital expenditures hit $19.4 billion in Q3, driven by AI infrastructure, and are projected to rise to $70–$72 billion for FY2025.

Free cash flow reached $10.6 billion, with $3.2 billion in stock buybacks and $1.3 billion in dividends. Li noted Meta will “invest aggressively” in 2026 to meet surging compute demand, meaning expenses will “grow at a significantly faster percentage rate” next year.

On the operational front, AI continues to lift engagement and monetization efficiency. The Lattice architecture has consolidated 100 ad models, boosting conversions by nearly 3%. Business messaging revenue from click-to-WhatsApp ads jumped 60% year-over-year, and generative tools like Vibes and AI-generated music are expanding creative options for advertisers.

Zuckerberg closed with optimism: “If we deliver even a fraction of the opportunity ahead, the next few years will be the most exciting in our history.” Meta’s dual focus — leading in AI infrastructure and embedding intelligence into every app and ad system — positions it for a transformative 2026, even as CapEx soars and competition intensifies.

You can find the entire earnings call transcript here: Meta Platforms, Inc. (META) Q3 FY2025 earnings call transcript

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