It has been about a month since the last earnings report for Meta Platforms (META). Shares have lost about 4.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Meta Platforms due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Meta Platforms, Inc. before we dive into how investors and analysts have reacted as of late.
META Q3 Earnings & Revenues Beat Estimates
Meta Platforms reported third-quarter 2025 non-GAAP earnings of $7.25 per share, beating the Zacks Consensus Estimate by 9.68%. GAAP earnings of $1.05 per share fell 82.6% year over year.
Revenues of $51.24 billion beat the Zacks Consensus Estimate by 3.63% and increased 26.2% year over year. At constant currency (cc), revenues soared 25% year over year.
META’s Top-Line Growth Rides on Strong User Base
Revenues from Family of Apps (99.1% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 26% year over year to $50.77 billion.
Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, was 3.54 billion, up 7.6% year over year.
Geographically, revenues from the United States & Canada, Asia-Pacific, Europe and the Rest of the World (RoW) surged 23.5%, 25%, 29.2% and 31.9% on a year-over-year basis, respectively.
AI recommendation systems are delivering higher quality and more relevant content, which led to 5% more time spent on Facebook in the reported quarter and 10% on Threads. Video time spent on Instagram increased more than 30% year over year. Reels now has an annual run rate of more than $50 billion.
META’s Advertising Revenues Jump Y/Y
Advertising revenues (98.6% of Family of Apps revenues) increased 25.6% year over year to $50.08 billion and accounted for 97.7% of third-quarter revenues. At cc, revenues increased 25% year over year.
Advertising revenues from the United States & Canada, Asia-Pacific, Europe and the RoW surged 22.7%, 24.5%, 29% and 30.9% on a year-over-year basis, respectively.
Ad impressions delivered across Family of Apps increased 14% year over year, and the average price per ad jumped 10% in the reported quarter. Impression growth from Asia-Pacific, the RoW, the United States & Canada and Europe was 23%, 9%, 8% and 9%, respectively.
Family of Apps’ other revenues soared 59% year over year to $690 million. Reality Labs’ revenues (0.9% of total revenues) jumped 74.1% year over year to $470 million.
META's Operating Details
In the third quarter of 2025, total costs and expenses increased 32.1% year over year to $30.71 billion. As a percentage of revenues, total costs and expenses were 59.9%, up 270 basis points (bps) year over year.
As a percentage of revenues, marketing & sales expenses decreased 140 bps, while general & administrative expenses increased 230 bps on a year-over-year basis. Research & development expenses, as a percentage of revenues, were 29.6%, up 200 bps on a year-over-year basis.
Meta Platforms’ employee base was 78,450 at the end of the third quarter, up 8% year over year.
Operating income of $20.54 billion jumped 18.4% year over year. The operating margin was 40.1%, which contracted 270 bps year over year. Family of Apps’ operating income increased 14.6% year over year to $25 billion. Reality Labs reported a loss of $4.43 billion, unchanged year over year.
META’s Balance Sheet Remains Strong
As of Sept. 30, 2025, cash & cash equivalents and marketable securities were $44.45 billion compared with $47.07 billion as of June 30, 2025.
Long-term debt was $28.83 billion as of Sept. 30, 2025, unchanged from the figure reported as of June 30, 2025.
Capital expenditures were $19.37 billion in the third quarter, while free cash flow was $10.63 billion.
META Offers Positive Guidance
Meta Platforms expects total revenues between $56 billion and $59 billion for the fourth quarter of 2025, including 1% tailwind from favorable forex. The company expects continued strong ad revenue growth but lower Reality Labs revenues.
For 2025, META anticipates total expenses between $116 billion and $118 billion (narrowed from the prior outlook $114-$118), indicating a growth rate of 22-24% year over year. For 2026, total expenses are expected to grow at a much faster rate.
META expects 2025 capital expenditure to be in the range of $70-$72 billion (up from previous guidance between $66-$72 billion). For 2026, Meta Platforms expects capital expenditures to increase significantly.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Meta Platforms has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Meta Platforms has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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