Meta has revealed its newest efficiency replace, displaying regular will increase in income and utilization, because it continues to take a position large on the AI and VR future.
First off, on customers. Meta added 60 million extra customers throughout its suite of apps in Q3, taking it to three.54 billion general.
Which is regular progress, particularly contemplating that each Fb and IG could be reaching saturation level in lots of markets. However Meta continues to realize customers in growing areas, whereas the progress of Threads would even be contributing to general utilization progress.
We don’t have platform-specific information, solely this cumulative counter for all distinctive customers throughout Fb, Instagram, Messenger, WhatsApp and Threads. However the top-line determine exhibits that Meta continues to steadily add extra customers over time, regardless of its already huge scale.
By way of income, Meta introduced in $51.24 billion in Q3, a rise of 26% year-over-year.
Meta nonetheless generates the overwhelming majority of its revenue from its advert enterprise (97%), and from its viewers within the U.S., although it’s diversifying over time, with gross sales of its AI glasses persevering with to rise, and different choices, like Meta Verified, feeding into that general outcome.
Although this graph in all probability would not make advertising and marketing folks particularly giddy:
On AI and AR glasses, Meta has simply launched its ‘Show’ mannequin, which features a heads-up show and wrist controller, whereas it’s additionally introduced plans to ship its totally AR-enabled glasses out to builders subsequent yr, with a view to a 2027 retail launch.
Finally, Meta’s hoping that AI-powered glasses will substitute smartphones as our key connective gadget, and if that occurs, that might see them change into a a lot larger contributor to Meta’s income pie.
However proper now, bills in its Actuality Labs division stay excessive, offsetting higher gross sales numbers.
Actuality Labs posted a $4.4 billion loss in Q3:
Oh, additionally this:
Meta’s investing billions upon billions into AI, with Zuckerberg predicting again in January that it’ll seemingly make investments round $65 billion into AI infrastructure this yr alone. That’ll largely go in direction of constructing huge new information facilities to energy its superintelligence push. And it now appears like its outlay may truly get even larger than Zuck’s preliminary forecast.
As per Meta:
“As we’ve got begun to plan for subsequent yr, it has change into clear that our compute wants have continued to increase meaningfully, together with versus our expectations final quarter. We’re nonetheless working by way of our capability plans for subsequent yr, however we anticipate to take a position aggressively to fulfill these wants each by constructing our personal infrastructure and contracting with third celebration cloud suppliers. Because of this, our present expectation is that capital expenditures greenback progress will likely be notably bigger in 2026 than 2025.”
That’s some huge cash flowing into AI tasks. Certainly, earlier this month, Meta broke floor on a brand new $1.5 billion information facility in El Paso, Texas, which can change into Meta’s twenty ninth information infrastructure improvement within the U.S.
The necessity for a lot funding will value many smaller gamers out of the AI race fully, and certain, a few of the larger ones as effectively, with analysts already projecting robust instances forward for OpenAI and xAI, as extra questions are raised about how that funding will finally lead to consumption.
Meta, Google and Apple all have much more assets to expend on this respect, and that could be the defining issue that dictates the eventual “winner” of the AI race.
However these tasks may even have to provide actual outcomes, and exhibit why they’re definitely worth the cumulative trillions in funding. AI instruments, up to now, have confirmed fascinating, and useful in some respects, however not as transformational because the hype would counsel.
Can they get to that stage? Zuck and Co. are clearly betting that they are going to, and until there’s a main repay, these bets will proceed to weigh on Meta’s earnings.
On one other entrance, Meta’s additionally warned of the dangers of impending regulation, within the U.S. and EU particularly.
“For instance, within the EU, we proceed to interact constructively with the European Fee on our Much less Personalised Adverts providing. Nevertheless, we can not rule out the Fee imposing additional adjustments to that providing that might have a big unfavourable affect on our European income, as early as this quarter. Within the U.S., a variety of youth-related trials are scheduled for 2026, and will in the end lead to a fabric loss.”
As extra areas take into account teen social media bans and restrictions, social apps might find yourself shedding out, which can additionally affect Meta’s longer-term income numbers.
However general, the enterprise itself stays strong, and actually, a marvel within the fashionable panorama. And whereas there’s danger in over-investing in AI and VR, applied sciences which haven’t but confirmed vital market use case (relative to funding), Meta can also be seeking to place itself to dominate these areas, and set the muse for ongoing enterprise success.
