Meta Platforms Inc. reported a steep 83% drop in net profit for the third quarter, largely due to a one-time tax charge tied to President Donald Trump’s One Big Beautiful Bill Act, even as its revenue hit a new record.
The company brought in $51.24 billion in revenue, a 26% increase compared to the same period last year, outpacing Wall Street expectations of $49 billion. However, the sharp decline in profit — down to $2.71 billion from last year’s figures — stemmed from a $15.93 billion non-cash income tax charge required under the new legislation.
If not for the charge, Meta’s net income would have been $18.64 billion, marking a healthy 19% rise from the prior year. The company explained that this accounting adjustment was due to a valuation allowance against its deferred U.S. federal tax assets, a move that dramatically inflated its effective tax rate to 87% for the quarter.
Despite the short-term financial blow, Meta expects this change to significantly reduce future U.S. tax payments beginning later in 2025, softening the long-term impact.
Meta’s Business Fundamentals Stay Strong
While the tax charge dominated headlines, Meta’s underlying business performance remained strong. The company’s key operational figures all showed growth:
- Revenue: $51.24 billion, up 26% year-over-year.
- Earnings per Share (EPS): $7.25, surpassing the $6.71 predicted by analysts.
- Daily Active Users (DAUs): 3.54 billion across Facebook, Instagram, WhatsApp, and Threads — an 8% annual increase.
Meta’s stock edged slightly higher in after-hours trading, rising 0.03% to $751.67, signaling investor confidence in the company’s broader strategy.
The company continues to demonstrate resilience in maintaining engagement across its platforms. Meta’s massive user base remains one of its strongest assets, driving sustained advertising demand and new monetization opportunities.
Ad Business Drives Growth
Advertising continues to be the lifeblood of Meta’s financial engine. The company reported a 14% jump in ad impressions and a 10% increase in average price per ad compared to last year.
This double-digit growth reflects both improved targeting capabilities and stronger engagement across Meta’s apps. Advertisers continue to favor Meta’s ecosystem, even as global ad budgets remain under pressure. The consistent rise in ad revenue underscores the company’s ability to monetize its massive audience effectively.
AI Investments Dominate Strategic Vision
Artificial intelligence has become central to Meta’s next phase of growth. The company’s ongoing investment in AI — particularly in its new Meta Superintelligence Labs — is aimed at developing advanced systems that could eventually achieve or exceed human-level understanding.
Executives emphasized that Meta’s focus is on creating open-source AI tools, allowing developers and researchers to benefit from its advancements. This strategy sets Meta apart from rivals who maintain closed systems, as the company aims to position itself as a leader in accessible, cutting-edge AI.
The company is also expanding its integration of AI across its platforms — from generative image tools to AI-powered recommendations and customer interactions — signaling that its long-term future hinges heavily on intelligent computing.
Reality Labs Remains a Cost Center
Meta’s Reality Labs division, which develops products in virtual reality (VR), augmented reality (AR), and AI hardware, continues to post substantial losses.
The segment recorded a $4.43 billion loss during the third quarter, a slight improvement from the $4.53 billion loss in the previous quarter. The company attributed the decline in revenue to the timing of product launches, including the Quest 3S headset, and preparations for the upcoming holiday season.
While these investments continue to strain profits, Meta maintains that they are crucial to its long-term vision of building immersive computing environments that will complement its AI initiatives.
Expanding Reach Across Apps
Meta’s ecosystem continues to grow at an impressive scale. As of September 30, 2025, the company employed 78,450 workers, an 8% year-over-year increase, signaling renewed hiring momentum after earlier restructuring.
Its major platforms saw strong engagement:
- Instagram now has 3 billion monthly active users, maintaining its dominance in global social networking.
- Threads, Meta’s text-based platform launched to compete with X (formerly Twitter), has grown to 150 million daily active users.
The company also highlighted rapid adoption of Vibes, its AI-driven creative platform launched in September. Users have generated over 20 billion images through the app, marking a tenfold increase in creative media output across Meta’s products.
Executives noted that more than one billion users now interact with Meta’s AI tools monthly, illustrating how deeply generative AI has been embedded into its suite of services.
