Meta Earnings Presentation Q4 2025 investor.atmeta.com Advertising Revenue by User Geography In Millions $17,784 $15,451 $16,593 $17,389 $20,982 $18,259 $20,045 $21,331 $25,643 $9,159 $8,327 $9,135 $9,358 $11,154 $9,527 $11,366 $12,072 $14,198 $7,316 $7,338 $7,721 $8,050 $9,012 $8,224 $9,148 $10,020 $10,893 $4,447 $4,519 $4,880 $5,088 $5,635 $5,382 $6,004 $6,659 $7,403 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25 Rest of World Asia-Pacific Europe US & Canada $38,706 $35,635 $58,137 $38,329 $39,885 ...

Financial Performance - Meta Platforms reported adjusted earnings of $7.25 per share on revenue of $51.24 billion, exceeding consensus estimates [2] - Revenue in Q3 2025 rose 26% year-over-year, marking the company's strongest growth rate in 18 months [2] - The company absorbed a one-time tax charge of $15.93 billion related to recent tax legislation, which will reduce future cash tax payments [2] Capital Expenditure and Investment Strategy - Meta projected capital spending to range between $70 billion and $72 billion in 2025, above the previous midpoint guidance of $69 billion [4] - CEO Mark Zuckerberg defended the aggressive investment strategy, stating the need to build capacity ahead of potential breakthroughs in superintelligence [4] - Meta's recent investments include $14.3 billion in AI startup Scale AI and multiple cloud deals to enhance AI capabilities [5] AI and Reality Labs Division - The Reality Labs division reported a $4.4 billion operating loss on $470 million in sales during the quarter, with cumulative losses exceeding $70 billion since late 2020 [6] - Despite losses, the Ray-Ban AI glasses are gaining traction, with the $799 display version selling out quickly [6] - Zuckerberg outlined an ambitious vision for establishing Meta as a leading frontier AI laboratory, serving 3.5 billion daily active users across its family of apps [8]

Core Viewpoint - Meta Platforms has the potential to surpass Alphabet in market capitalization within the next decade due to its stronger growth trajectory and fewer long-term challenges [5][12]. Group 1: Alphabet's Performance and Challenges - Alphabet's revenue grew at a compound annual growth rate (CAGR) of 18% from 2014 to 2024, with earnings per share (EPS) increasing at a CAGR of 23% [2]. - Analysts project Alphabet's revenue and EPS growth to slow to 11% and 13%, respectively, from 2024 to 2027 [2]. - The company faces significant competition from new generative AI platforms and social media, which are eroding its core search engine and advertising business [3]. - Alphabet is under pressure from antitrust regulators, with the U.S. Department of Justice seeking to divest Chrome and restrict service promotions on Android [4]. - If Alphabet fails to address these challenges, it risks becoming a slower-growth company similar to IBM [5]. Group 2: Meta's Growth and Market Position - Meta's revenue and EPS increased at a CAGR of 29% and 36%, respectively, from 2014 to 2024, outpacing Alphabet due to its dominance in social media [7]. - Meta's user base reached 3.35 billion daily active users by the end of 2024, representing 40% of the global population [6]. - From 2024 to 2027, Meta's revenue and EPS are expected to grow at a CAGR of 13% and 11%, respectively, with fewer immediate challenges compared to Alphabet [8]. - Meta is actively countering competition from TikTok and expanding into social commerce and virtual/augmented reality markets [8]. Group 3: Market Capitalization Projections - Current earnings multiples show Meta trading at 21x and Alphabet at 18x this year's earnings [9]. - If both companies grow their EPS at a CAGR of 10% from 2027 to 2035, Meta could reach a market cap of $3.63 trillion, while Alphabet could reach $6.20 trillion [10]. - If Meta accelerates its EPS growth to 15% through 2035, its market cap could rise to $6.47 trillion, potentially surpassing Alphabet [11].