Meta cashes in: More users watch more ads at higher prices

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More users than ever are watching more ads on Meta Platforms' services than ever before. At the same time, Meta can charge more money for it than ever before. This is evident from Meta's financial figures for the fourth quarter of 2025. It is a new record quarter for the data company.

On average, 3.58 billion people used Facebook, Instagram, Messenger, and/or WhatsApp daily at the end of 2025, Meta estimates. This is an increase of nearly seven percent year-on-year. In that quarter, each person generated a calculated revenue of $16.56 for Meta – almost exclusively from advertising revenue. The number of ad impressions increased by 18 percent, which is about three times as much as the number of users. At the same time, Meta was able to charge six percent higher prices on average.

It is therefore not surprising that Meta, according to its own statements, was able to increase its quarterly revenue by almost a quarter to $59.9 billion. Although costs also increased, by as much as 40 percent, an operating profit of $24.7 billion, up six percent, still remained. Because Facebook also has higher capital gains, pre-tax profit climbed by eight percent to $25.4 billion.

Less Taxes, More Profit

The tax burden not only fell relatively by a sixth, from twelve to ten percent, but also in absolute terms. Thus, a net profit of $22.8 billion, up nine percent, remains. Operating cash flow swelled by 29 percent to $36.2 billion. After the financial figures were announced, Meta shares gained around seven percent in after-hours trading.

If one looks for a fly in the ointment, one can point to the margin of 41 percent; although it is enormous, it has been even more enormous in the past. And of course, the Reality Labs division responsible for the namesake Metaverse: its revenue fell by twelve percent to $955 million, but its operating loss grew by 21 percent to six billion dollars. No wonder that Meta Platforms is distancing itself from the Metaverse.

Annual Figures

In the full year 2025, Meta generated over $200 billion in revenue for the first time, specifically $200.996 billion, an increase of 22 percent. Net profit rose by a fifth compared to 2024 to $83.3 billion, operating cash flow by 27 percent to $115.8 billion, and pre-tax profit by 22 percent to $85.9 billion.

Net profit fell by three percent to $60.5 billion, which is mainly due to the tax cut implemented by US President Donald Trump. This sounds confusing and can be explained by the fact that loss carryforwards and other future deductible items lose value when future taxes are lowered.

Expenses Will Explode

For the current quarter, management expects at least 26 percent more revenue than in the first quarter of 2025, perhaps even a third more. For the full year, CFO Susan Li is preparing Meta investors for rapidly increasing expenses, not least for artificial intelligence; however, operating profit is still expected to rise. It helps that Meta has agreed with the EU Commission to continue to display personalized advertising in the European Economic Area, in the form of so-called Less Personalized Ads.

Operating expenses are expected to rise from $117.7 billion to $162 to $169 billion. This is mainly due to infrastructure costs in the form of higher operating costs of own facilities, higher depreciation, and higher payments to third-party cloud services. In addition, personnel costs are also increasing, especially for highly sought-after AI specialists. The annual tax rate is expected to halve, from 30 percent to only 13 to 16 percent – compared to twelve percent in 2024, this would be a slightly higher tax rate.

Capital expenditures are expected to jump from $72.2 billion to $115 to $135 billion, thus tending towards doubling. This will be needed for the Meta Superintelligence Labs, but also for the core business, says Li. CEO Mark Zuckerberg has set the goal of advancing "personalized superintelligence for people around the world." Since Meta had "only" good $82 billion in cash reserves (+5%) at the turn of the year, it will likely take on new debt.

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