Mark Zuckerberg, CEO of Meta Platforms Inc., wears Meta Oakley Vanguard AI glasses during the MetaConnect event on Wednesday, September 17, 2025 in Menlo Park, California, USA.
David Paul Morris | Bloomberg | Getty Images
Meta reported better-than-expected fourth-quarter profits on Wednesday and issued a stronger-than-expected sales outlook. Shares soared as much as 10% in after-hours trading.
Here’s how the company performed compared to the expectations of analysts surveyed by LSEG:
Earnings per share: $8.88 vs. $8.23 estimated Revenue: $59.89 billion vs. $58.59 billion estimated
Meta said it expects first-quarter sales to be in the range of $53.5 billion to $56.5 billion, beating analysts’ expectations of $51.41 billion.
Finance director Susan Lee said the outlook was “really supported by strong demand that continues from the end of the fourth quarter into early 2026.”
The company announced that fourth-quarter sales increased 24% compared to the same period last year. The company said its advertising business generated revenue of $58.1 billion in the same period. Advertising accounted for nearly 97% of the company’s total revenue in the quarter.
Mehta said the daily active population in the fourth quarter was 3.58 billion, in line with Wall Street estimates.
The social media giant said it expects total costs to be between $162 billion and $169 billion in 2026.
Capital spending related to the company’s artificial intelligence push is expected to be in the range of $115 billion to $135 billion in 2026, higher than the $110.7 billion expected by analysts. It’s also nearly double the $72.2 billion Meta spent on capital expenditures in 2025, the company announced Wednesday.
Meta said the capital expenditures were due to “year-over-year growth driven by our Meta Superintelligence Lab initiative and increased investment to support our core business.”
CEO Mark Zuckerberg said Meta will release its latest AI models “in the coming months.”
“We expect the first models to be good, but more importantly, they demonstrate the rapid trajectory we’re on,” he told analysts on a conference call Wednesday. “And as we continue to release new models, we expect to steadily push the frontier forward this year.”
The company spent much of 2025 overhauling its IT AI division, investing $14.3 billion in Scale AI as part of an effort to acquire startup founder Alexandr Wang and several of his colleagues.
Wang oversees Meta’s top-level TBD department, which is tasked with developing powerful AI models. After releasing the Llama 4 model last spring, the company decided to leave it undecided due to lackluster response from developers. Meta is testing a new Frontier model and a successor to Llama (codenamed Avocado) and plans to release it in the first half of this year, CNBC reported.
The company’s Reality Labs division posted an operating loss of $6.02 billion on revenue of $955 million for the quarter. Analysts had expected Reality Labs to post an operating loss of $5.67 billion on fourth-quarter sales of $940.8 million.
Reality Labs now has total operating losses of nearly $80 billion since late 2020.
Earlier this month, Meta laid off more than 1,000 Reality Lab employees who worked on VR-related efforts, including its in-house studio, as part of a shift of resources to AI and related wearable devices such as Ray-Ban Meta smart glasses.
Although Meta’s head of technology, Andrew Bosworth, told the media last week that Meta hasn’t stopped working on VR, the company’s heavy influence on the industry is chilling some developers and raising concerns about a VR winter, CNBC reported.
Mehta said Wednesday that he expects Reality Labs’ operating loss in 2026 to remain at the same level as a year ago. Zuckerberg said he expects “this year to be the peak of Reality Labs’ losses as we start to gradually reduce our losses.”
The company noted that regulatory and legal headwinds in the European Union and the United States each could “materially impact our operations and financial results.” Mehta said the various high-profile social media trials starting this year “could ultimately result in significant losses.”
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