Meta’s ad revenue surges 26% to $51.24 billion, lifting results despite one-time $16 billion tax hit
Meta’s third-quarter ad revenue surged 26% to $51.24 billion, powering strong top-line growth even as a one-time $15.9 billion tax charge sharply cut profits.
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Meta Platforms, Inc. reported a strong quarter of year-on-year revenue growth for the three months ended September 30, 2025, as its core advertising business continued to accelerate across Facebook, Instagram, and WhatsApp—even as a one-time tax charge sharply dented profits.
Ad Business Powers Growth
Meta’s revenue rose 26 % to $51.24 billion, up from $40.59 billion in the same quarter last year. On a constant-currency basis, revenue increased 25 %. Operating income climbed to $20.54 billion, up 18 % from a year earlier, with an operating margin of 40 %, slightly below last year’s 43 %.
The “Family of Apps” segment, which houses the company’s ad-driven platforms, brought in $50.77 billion, compared with $40.32 billion a year ago. Ad impressions rose 14 %, and the average price per ad increased 10 %, underscoring resilient demand across global markets.
By contrast, the company’s “Reality Labs” unit — home to its virtual and augmented reality efforts — posted revenue of $470 million, up from $270 million, but remained a fraction of Meta’s overall business.
Earnings Undermined by Tax Charge
Meta’s net income fell to $2.71 billion, down from $15.69 billion a year earlier, a decline of 83 %, as a one-time, non-cash tax charge of $15.93 billion related to new U.S. tax legislation weighed on results. Diluted earnings per share were $1.05, compared with $6.03 a year ago.
Excluding the tax item, Meta said net income would have been $18.64 billion and diluted EPS $7.25, reflecting the underlying strength of its ad-based operations.
Spending and Outlook
Total costs and expenses rose 32 % to $30.71 billion, while capital expenditures, including lease payments, hit $19.37 billion. Meta returned $4.49 billion to shareholders during the quarter through dividends and share repurchases.
For the fourth quarter, Meta projected revenue between $56 billion and $59 billion, with continued strength in ad sales. It expects Reality Labs revenue to decline year-over-year due to product timing.
Full-year expenses are now estimated at $116 billion to $118 billion, with capital expenditures forecast at $70 billion to $72 billion as Meta continues to expand its AI infrastructure.
Regulatory and Infrastructure Pressures
Meta cautioned that regulatory developments — including the European Commission’s review of its “Less Personalised Ads” option and U.S. litigation over youth app use — could pose risks in 2026. The company also noted growing infrastructure costs driven by its artificial intelligence ambitions and rising employee compensation.
A Robust Ad Engine, With Heavy Lifting Ahead
Despite the profit drag from the tax adjustment, Meta’s core ad business remains its powerhouse — delivering consistent growth in both volume and pricing. As the company doubles down on AI-driven products and immersive technologies, it faces the challenge of balancing aggressive investment with profitability.
