Meta Platforms' Q4 Earnings and Revenues Surpass Estimates, Rise Y/Y

Core Insights - Meta Platforms (META) reported fourth-quarter 2025 non-GAAP earnings of $8.88 per share, exceeding the Zacks Consensus Estimate by 8.16% [1] - Revenues reached $59.89 billion, surpassing the Zacks Consensus Estimate by 2.22% and reflecting a year-over-year increase of 23.8% [1] - At constant currency, revenues increased by 23% year over year [1] Revenue Breakdown - Revenues from the Family of Apps, which constitutes 98.4% of total revenues, rose 24.6% year over year to $58.94 billion, driven by WhatsApp paid messaging and Meta Verified subscriptions [2] - Daily Active People (DAP) across Family of Apps reached 3.58 billion, marking a 7% year-over-year increase, with significant revenue growth across various regions: United States & Canada (21.5%), Asia-Pacific (21%), Europe (25.9%), and Rest of the World (32.5%) [3] Engagement and Content - Instagram Reels saw over 30% year-over-year growth in watch time in the United States, with a 10% increase in original content [4] - Facebook video time also grew in double digits year-over-year, with a 7% increase in views of organic Feed and video posts due to ranking and product improvements [5] Advertising Performance - Advertising revenues, which account for 98.6% of Family of Apps revenues, increased 24.3% year over year to $58.14 billion, representing 97.1% of total revenues [6] - Ad impressions across Family of Apps grew 18% year over year, with a 6% increase in average price per ad [7] Cost and Margin Analysis - Total costs and expenses rose 40.5% year over year to $35.15 billion, leading to an operating margin contraction to 41.3%, down 700 basis points year over year [11][12] - Operating income for the quarter was $24.75 billion, an 18.4% year-over-year increase [12] Financial Position - As of December 31, 2025, cash and cash equivalents along with marketable securities totaled $81.59 billion, up from $44.45 billion as of September 30, 2025 [13] - Long-term debt remained stable at $58.74 billion, with capital expenditures of $22.14 billion and free cash flow of $14.08 billion [13] Future Guidance - For Q1 2026, Meta expects total revenues between $53.5 billion and $56.5 billion, with a 4% tailwind from favorable foreign exchange [14] - Anticipated total expenses for 2026 are projected between $162 billion and $169 billion, driven by increased infrastructure costs and higher employee compensation [14][15]