Meta Platforms, Inc. Q3 FY2025 earnings call

• User growth: Over 3.5 billion daily active users across apps, Instagram reached 3 billion monthly actives, Threads has 150 million daily actives. • AI initiatives: Meta Superintelligence Labs building next-gen models; AI recommendation systems driving more time spent on apps; Meta AI has over 1 billion monthly users. • Ad performance: Annual run rate of ad tools over $60 billion; Lattice model rollout driving conversions; Advantage+ automation reaching $60 billion ARR. • Reality Labs products: Ray-Ban and Oakley Meta glasses selling well, with Ray-Ban display glasses selling out quickly. • Infrastructure: Investing heavily in compute infrastructure for AI and core business.

Family of Apps: Q3 total revenue was $50.8 billion, with ad revenue $50.1 billion (up 26% Y/Y) and other revenue $690 million (up 59% Y/Y). Reality Labs: Q3 revenue was $470 million, up 74% Y/Y due to retail stocking of Quest headsets and AI glasses revenue.

• Q4 2025 revenue: Expected $56 billion to $59 billion, with Reality Labs revenue down due to lap of Quest 3S launch. • 2025 expenses: $116 billion to $118 billion (up 22%-24% Y/Y). • 2025 CapEx: $70 billion to $72 billion. • 2026 plans: Aggressive CapEx and expense growth due to infrastructure needs for AI, with focus on compute and talent. • Tax rate: Q4 2025 expected 12%-15% absent changes.

• Legal/regulatory: EU could impose changes to less personalized ads affecting revenue; US youth-related trials in 2026 may result in material loss.

Q: Brian Nowak asks about early quantifiable signals from AB tests and Reality Labs revenue headwind in Q4.

A: Susan Li mentions core AI pipeline driving conversions and value-weighted growth, and Reality Labs headwind due to lapping Quest 3S launch and retail stocking in Q3.

Q: Doug Anmuth asks about CapEx growth, expense growth, and cash targets.

A: Susan and Mark discuss ongoing budget planning for 2026, focus on compute for AI, and no specific cash targets yet.

Q: Eric Sheridan asks about Meta AI usage and scaling.

A: Mark Zuckerberg notes over 1 billion monthly users of Meta AI, growth with improved models, and large latent opportunity.

Q: Mark Shmulik asks about ad improvement visibility and MSL timing.

A: Susan Li talks about model architectures and inference model advancements, and Mark Zuckerberg says no specific MSL timing announced.

Q: Justin Post asks about AI cycle tools and margins.

A: Mark Zuckerberg says early to determine margins, focus on value maximization.

Q: Ross Sandler asks about MSL goals vs revenue products.

A: Mark Zuckerberg explains research enabling new products and capabilities across various areas.

Q: Mark Mahaney asks about Meta AI adoption and monetization.

A: Mark Zuckerberg talks about user growth with model improvements and monetization potential through AI services.

Q: Ronald Josey asks about advertiser adoption and automation ROI.

A: Susan Li discusses Advantage+ adoption and performance gains like lower cost per lead.

Q: Youssef Squali asks about wearables recouping investment and AI funding.

A: Mark Zuckerberg talks about wearables potential and Susan Li explains JV with Blue Owl and CapEx treatment.

Q: Kenneth Gawrelski asks about value accrual with frontier model.

A: Mark Zuckerberg talks about overall AI opportunity and Meta's ability to scale products to billions.