Meta Q3: Ad engine fuels growth as tax hit drags profit down

Meta Platforms, Inc. reported robust third-quarter results for the period ending September 30, 2025, driven by a surge in its core advertising business across Facebook, Instagram, and WhatsApp. The company’s ad revenue climbed 26% year-on-year to $51.24 billion, sustaining strong top-line growth despite a significant one-time tax charge that dented profits.

Total revenue rose from $40.59 billion a year ago, marking a 25% rise on a constant-currency basis. Operating income increased 18% to $20.54 billion, with an operating margin of 40%, slightly below last year’s 43%. Meta’s “Family of Apps” segment remained the key driver, contributing $50.77 billion in revenue compared with $40.32 billion a year earlier. Ad impressions rose 14%, while the average price per ad climbed 10%, reflecting steady advertiser demand across global markets.

Meanwhile, the company’s “Reality Labs” division which is responsible for virtual and augmented reality initiatives generated $470 million in revenue, up from $270 million. However, it continues to represent a small portion of Meta’s overall earnings.

Net income dropped 83% to $2.71 billion from $15.69 billion in the same quarter last year, weighed down by a $15.93 billion non-cash tax charge stemming from new U.S. tax legislation. Excluding the tax impact, Meta’s adjusted net income stood at $18.64 billion, underscoring continued business strength.

Total costs and expenses increased 32% to $30.71 billion, with capital expenditures reaching $19.37 billion.

For the fourth quarter, Meta expects revenue between $56 billion and $59 billion, while projecting lower Reality Labs income due to product timing. With full-year expenses forecast at up to $118 billion, the company faces continued regulatory scrutiny and infrastructure costs tied to its expanding AI ambitions. Despite these pressures, Meta’s core advertising business remains its growth engine.