Meta’s fourth quarter delivered results ahead of Wall Street expectations, with management attributing the upside to robust advertiser demand, continued improvements in AI-powered ad targeting, and engagement gains across the company’s core social platforms. CEO Mark Zuckerberg emphasized that Meta’s AI-driven recommendation systems and new ad products were key contributors, noting a “major AI acceleration” that is beginning to unlock new user and business experiences. CFO Susan Li added that optimizations in both feed and video surfaces on Facebook and Instagram drove meaningful increases in engagement and monetization.
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Meta (META) Q4 CY2025 Highlights:
- Revenue: $59.89 billion vs analyst estimates of $58.45 billion (23.8% year-on-year growth, 2.5% beat)
- Adjusted EPS: $8.88 vs analyst estimates of $8.18 (8.6% beat)
- Adjusted EBITDA: $36.05 billion vs analyst estimates of $35.09 billion (60.2% margin, 2.7% beat)
- Revenue Guidance for Q1 CY2026 is $55 billion at the midpoint, above analyst estimates of $51.34 billion
- Operating Margin: 41.3%, down from 48.3% in the same quarter last year
- Daily Active People: 3.58 billion, up 230 million year on year
- Market Capitalization: $1.75 trillion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Meta’s Q4 Earnings Call
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Brian Thomas Nowak (Morgan Stanley) asked about the long-term revenue opportunities from AI and MetaCompute. CEO Mark Zuckerberg replied that initial models and products will be released soon, with monetization likely via subscriptions and advertising, but specifics will become clearer as products launch.
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Eric James Sheridan (Goldman Sachs) inquired about compute capacity and its effect on monetization. CFO Susan Li said Meta remains capacity constrained, but efficiency improvements and scaling up compute for larger models should yield ongoing performance gains in ads and recommendations.
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Douglas Till Anmuth (JPMorgan) pressed for details on Meta Superintelligence Labs’ progress and future cash flow given infrastructure investments. Zuckerberg reiterated that model launches will show progress over time, while Li stated that strong business cash flow supports current investments and flexibility is maintained for future needs.
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Ronald Victor Josey (Citi) asked about the roadmap for ranking and recommendation model improvements. Li explained that ongoing model scaling, data expansion, and deeper LLM (large language model) integration will drive further gains in both engagement and ad relevance.
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Kenneth Gawrelski (Wells Fargo) questioned the need for Meta to develop general-purpose AI models and the visibility into returns from these investments. Zuckerberg emphasized the strategic necessity of owning core technology for competitive and creative control, while Li noted continued attractive ROI from model and infrastructure expansion.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace and impact of new AI product launches and their effect on user engagement, (2) execution on infrastructure investments and improvements in cost efficiency, and (3) regulatory developments in key markets, particularly around privacy and ad personalization in the EU and U.S. Progress in scaling business messaging and monetization of new content formats will also be critical signposts.
Meta currently trades at $691, up from $668.73 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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