Focus: Q3 2025 U.S. Earnings Season Highlights

Meta Platforms, Inc. announced that it expects a substantial increase in total expenditures for 2026 and plans to maintain historically high levels of investment in artificial intelligence (AI).

In its earnings release, Meta reported a Q3 net profit of $2.71 billion, which includes a one-time, non-cash income tax expense of $15.9 billion due to tax reform legislation enacted in July. Excluding this accounting adjustment, net profit would have risen 19% to $18.6 billion.

Looking beyond Q3, the company stated that the new tax law is expected to result in "significantly lower" U.S. federal cash tax payments in 2025 and subsequent years.

Meta's Q3 revenue reached $51.2 billion, surpassing analysts' average estimate of $49.6 billion.

The company has been leveraging profits from its advertising business to fund its AI ambitions, unsettling some investors who are awaiting holiday season sales data to gauge how much they might offset AI spending. While Meta argues that its AI investments are already yielding results—improving ad targeting and content delivery—a significant slowdown in ad sales could dampen investor enthusiasm for CEO Mark Zuckerberg's long-term AI vision.

Meta shares fell approximately 6.5% in after-hours trading on Wednesday, following a regular-session close at $751.67. Year-to-date, the stock has gained 28% based on the closing price.