Meta Cautions About Possible Losses from Youth-Related Trials Even as Q4 Performs Better Than Expected
Meta’s fourth-quarter earnings report exceeded expectations, showing significant growth in both revenue and profits. The company anticipates an increase in spending this year, projecting as much as $135 billion in investments, particularly in its Superintelligence Labs.
Capital expenditures for 2025 are estimated at $72 billion, reflecting ongoing competition in the artificial intelligence sector. Following the release of strong Q4 figures and forecasts for 2026, Meta’s stock rose approximately 10% after market close.
Despite these increased expenditures, Meta expects to see higher operating income this year compared to last. The company also introduced its latest open-source AI software, Llama 4, last year.
Meta, the parent company of Facebook, Instagram, WhatsApp, and Messenger, reported an average of 3.58 billion daily active users (DAP) across its platforms, marking a 7% increase in line with expectations.
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Advertising revenue showed robust growth, with impressions delivered across platforms increasing by 18% and the average price per ad rising by 6% for the quarter ending in December. Ad sales surged to $58.1 billion, up from $46.8 billion, contributing to a 24% increase in total quarterly revenue, which reached $59.9 billion.
Net income increased to $22.7 billion, compared to $20.8 billion the previous year, leading to diluted earnings per share of $8.88, up from $8.02.
As legal challenges loom, jury selection is set to begin this week in Los Angeles for a significant case involving teen addiction against Meta and YouTube, with TikTok and Snap having already reached settlements. “We continue to monitor legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and financial results,” the company stated, highlighting ongoing scrutiny regarding youth-related issues.
This quarterly report arrives amid scrutiny of Meta’s actions, including a reported decision to block information about ICE agents across its Instagram, Facebook, and Threads platforms, in response to ongoing protests in Minneapolis following a second fatal shooting by an ICE agent.
Analysts expressed general optimism during a call hosted by CEO Mark Zuckerberg following the earnings report, despite the stock’s previous decline after a challenging Q3, which included a substantial non-cash tax charge of $15.93 billion related to changes stemming from the Trump administration’s tax policies.
