Meta Platforms after earnings: growth in the numbers, risks in the details

Investors purchasing Meta shares are taking on risk in the hope that the company will successfully execute its ambitious strategy, despite the current share price already reflecting elevated expectations.

Meta Platforms, Inc. (NASDAQ: META) has published its Q2 2025 results, reporting revenue of 47.52 billion USD, up 22% year-on-year, and earnings per share of 7.14 USD, with the operating margin rising to 43%.

Advertisers drove an 11% increase in ad impressions and a 9% rise in cost per impression, highlighting that new AI-powered targeting tools are enhancing monetisation.

The number of daily active users reached 3.48 billion, up 6% from a year earlier, underlining strong user engagement.

Free cash flow fell to 8.55 billion USD amid a rise in capital expenditure to 17.01 billion USD. Meta’s management has raised its CapEx forecast for 2025 to 66–72 billion USD and warned of a further substantial increase in 2026 to scale its AI infrastructure.

Reality Labs continues to weigh on results, posting an operating loss of 4.53 billion USD on revenue of 370 million USD, with management cautioning that losses are expected to widen next year.

Investors responded very positively to the report. Immediately after publication, Meta shares jumped by around 12%, adding approximately 80 USD – strong financial results and the AI focus outweighed concerns over rising costs.

This article provides an overview of Meta Platforms’ business model and revenue structure, reviews the company’s quarterly results, and presents a fundamental analysis of META. It also includes expert forecasts for Meta stock in 2025 and examines Meta’s share price performance as the basis for the 2025 outlook.

About Meta Platforms, Inc.

Meta Platforms, formerly known as Facebook, was founded in 2004 by Mark Zuckerberg and his Harvard classmates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes. It was initially a social network created for Harvard students but soon expanded rapidly, becoming one of the world’s largest communication platforms. Meta’s core operations include the development of social networks such as Facebook, Instagram, and WhatsApp, as well as advancing virtual and augmented reality technologies through its Reality Labs division. The company focuses significantly on developing the metaverse, as reflected in its rebranding in 2021. Meta went public on 18 May 2012, and its IPO ranked among the most prominent tech IPOs in history.

Meta Platforms, Inc.’s main financial flows

Meta Platforms revenue mainly comes from the following sources:

• Advertising: this segment accounts for approximately 98.5% of the company’s total revenue. Meta generates advertising revenue through its platforms (Facebook, Instagram, Messenger, and WhatsApp), allowing advertisers to target audiences based on various criteria, including demographic data, user interests, and behaviour
• Reality Labs: this division generates a smaller portion of the company’s revenue through hardware sales under the Meta Quest (previously Oculus VR) brand and related software products, including content
• Other revenue: this comprises fees charged for using Meta’s payment systems (for example, on Marketplace platforms or apps), paid subscriptions for special features or products, and income from other services. While these sources are less significant than advertising, they still contribute to the company’s financial performance

Thus, Meta Platforms’ primary source of revenue is advertising on its social platforms, followed by income from virtual reality sales and services and additional proceeds from other sources.

Meta Platforms, Inc. Q2 2024 report

Meta announced solid financial Q2 2024 results. Below are the figures compared to the same period in 2023:

• Revenue: 39.74 billion USD (+22%)
• Net income: 13.46 billion USD (+73%)
• Earnings per share: 5.16 USD (+73%)
• Operating margin: 38%​ (+900 basis points)
• Advertising revenue: 38.20 billion USD (+21%)
• Revenue from Reality Labs: 353 million USD (+27%)
• Loss from Reality Labs: 4.50 billion USD (+21%)
• Number of daily active users: 3.27 billion (+7%)
• Costs and expenses: 24.22 billion USD (+7%)

Advertising remains the primary revenue stream, contributing 96% of the company’s total revenue. The Reality Labs division, which specialises in developing virtual and augmented reality (VR and AR) technologies, has only generated losses so far. By the end of Q2 2024 results, Reality Labs’ loss reached 4.50 billion USD, a 21% increase.

Meta Platforms, Inc. Q3 2024 report

On 30 October, Meta released its Q3 2023 report. Below are the key figures compared to the same period in 2023:

• Revenue: 40.58 billion USD (+19%)
• Net income: 15.68 billion USD (+35%)
• Earnings per share: 6.03 USD (+37%)
• Operating margin: 43%​ (+300 basis points)
• Advertising revenue: 39.88 billion USD (+18%)
• Reality Labs revenue: 270 million USD (+28%)
• Reality Labs loss: 4.40 billion USD (+20%)
• Number of daily active users: 3.279 billion (+5%)
• Costs and expenses: 23.24 billion USD (+14%)

CEO Mark Zuckerberg explained that revenue growth was driven by advancements in artificial intelligence (AI), which are actively integrated into the company’s applications and business processes. He highlighted the notable success of Meta AI, the rollout of the Llama AI model, and the development of AI-powered smart glasses.

CFO Susan Li shared the company’s forecast, expecting Q4 2024 revenue to range between 45.00 billion and 48.00 billion USD. She also revised the company’s total expense forecast for 2024, lowering it to the 96.00-98.00 billion USD range, down from the previous estimate of 96.00-99.00 billion USD. Li emphasised that the operating losses of the Reality Labs division, which focuses on virtual and augmented reality (VR and AR), would significantly increase year-over-year due to ongoing development and investments aimed at scaling the ecosystem. Additionally, Li mentioned that Meta expects substantial growth in capital expenditures in 2025, including increased spending on infrastructure.

Both Zuckerberg and Li also noted the growing number of legal and regulatory challenges, particularly in the European Union and the US, which could significantly affect Meta’s business and financial results.

Overall, Meta’s management expressed optimism about the company’s current performance, which is driven by progress in AI technologies and strategic investments. However, they also pointed out that external factors could influence future results.

Meta Platforms, Inc. Q4 2024 earnings report

On 29 January 2025, Meta published its earnings report for Q4 2024. Below are the key figures compared to the same period in 2023:

• Revenue: 48.38 billion USD (+21%)
• Net income: 20.83 billion USD (+49%)
• Earnings per share: 8.02 USD (+50%)
• Operating margin: 48%​ (+700 basis points)
• Advertising revenue: 46.78 billion USD (+20%)
• Reality Labs revenue: 1.08 billion USD (+1%)
• Reality Labs loss: 4.96 billion USD (+6%)
• Number of daily active users: 3.35 billion (+5%)
• Costs and expenses: 25.02 billion USD (+5%)

In his comments on the report, Zuckerberg highlighted advancements in Artificial Intelligence (AI) and expressed optimism about scaling these technologies in 2025, including the introduction of personalised AI assistants. He emphasised the company’s commitment to building an “extensive computing infrastructure,” which implies significant investments in AI. His vision includes creating AI that can write and deploy code, unlocking new opportunities for business and the market.

Zuckerberg also pointed to progress in the development of computerised smart glasses, suggesting that 2025 could be a key year for understanding the market potential of AI-powered glasses.

Regarding DeepSeek, he acknowledged the “groundbreaking” developments that Meta is still trying to comprehend, with plans to integrate some of these innovations into its products. Despite DeepSeek’s achievements, Zuckerberg stated that “it is too early to form a definitive opinion” on how these developments may impact Meta’s infrastructure and capital investment plans. He stressed that the company’s strategy of large-scale AI infrastructure investments will remain unchanged, viewing this as a long-term strategic advantage.

Zuckerberg noted that DeepSeek is a new competitor in this market. At the same time, the decline in demand for computing resources (GPUs) is by no means certain, as running AI models still requires substantial computing power, especially given the scale of Meta’s operations.

Meta Platforms, Inc. Q1 2025 earnings report

On 30 April, Meta published its Q1 2025 report for the period ended 31 March. Key figures compared to the same period in 2024 are as follows:

• Revenue: 42.31 billion USD (+16%)
• Net income: 16.64 billion USD (+35%)
• Earnings per share: 6.43 USD (+37%)
• Operating margin: 41%​ (+300 basis points)
• Advertising revenue: 41.39 billion USD (+16%)
• Reality Labs revenue: 0.41 billion USD (-9%)
• Reality Labs loss: 4.21 billion USD (+16%)
• Family daily active people (DAP): 3.43 billion (+6%)
• Costs and expenses: 24.76 billion USD (+9%)

Meta made a confident start to 2025, delivering strong results and beating analysts’ expectations. Revenue rose by 16%, while earnings per share increased by 35%, well ahead of market forecasts. Advertising remains the primary growth driver/ Ad revenue increased by 16.2%, driven by higher prices and an increase in impressions. Meanwhile, the user base for Meta’s products continues to expand – daily active users reached 3.43 billion, up 6% year-on-year.

The company is also placed a major focus on artificial intelligence. Meta raised its capital expenditure forecast for 2025 to a range of 64-72 billion USD (up from a previous estimate of 60-65 billion USD), allocating investment towards developing data centres and acquiring infrastructure to support its AI initiatives.

For Q2 2025, Meta expected revenue in the range of 42.5 to 45.5 billion USD, which was in line with analysts’ expectations. However, management highlighted potential short-term risks, including a decline in advertising activity from Asian companies and broader economic uncertainty.

For investors, Meta remains one of the most promising companies in the technology sector. Its strong operational base, growing user base and significant investments in AI make the stock an attractive option for those seeking exposure to innovation and long-term growth.

Meta Platforms, Inc. Q2 2025 earnings report

On 30 July, Meta released its results for Q2 2025, ended 30 June. Below are the key figures compared with the same period in 2024:

• Revenue: 47.52 billion USD (+22%)
• Net income: 18.34 billion USD (+36%)
• Earnings per share: 7.14 USD (+38%)
• Operating margin: 43% (+500 basis points)
• Advertising revenue: 46.56 billion USD (+16%)
• Revenue from Reality Labs: 0.37 billion USD (+5%)
• Loss from Reality Labs: 4.53 billion USD (–1%)
• Family daily active people (DAP): 3.48 billion (+6%)
• Costs and expenses: 27.07 billion USD (+12%)

Meta Platforms reported revenue of 47.52 billion USD in Q2 2025, up 22% year on year, while adjusted earnings per share came in at 7.14 USD – 38% higher than the same period last year and well above analyst expectations of 5.85–5.89 USD. Operating profit rose to 20.44 billion USD, with an operating margin of approximately 43%, up five percentage points from 38% a year earlier.

Meta issued revenue guidance for Q3 2025 in the range of 47.5–50.5 billion USD, with the company anticipating a slowdown in growth rates in Q4 due to a high base of comparison.At the same time, it raised its full-year capital expenditure forecast to between 66–72 billion USD and hinted at even higher spending in 2026 to support the expansion of its AI infrastructure and the recruitment of specialised talent.

Analysis of key growth drivers and risks for Meta Platforms, Inc.

The most alarming signal immediately following the earnings release was a sharp surge in capital expenditure. In Q2 2025 alone, Meta spent 17 billion USD on servers and data centres and raised its full-year capex forecast to 66–72 billion USD – nearly 30 billion USD more than the previous year – warning of another comparable increase in 2026. Free cash flow dropped to 8.55 billion USD in Q2, down from 10.9 billion USD a year earlier, pulling the FCF margin down to 18%, highlighting how rapidly growing investment is diluting cash reserves, even in the face of record profits.

Even greater pressure is coming from the intensifying AI talent race. According to WIRED, Meta is willing to offer packages worth up to 300 million USD over four years for key researchers from Superintelligence Labs, including signing bonuses exceeding 100 million USD in the first year. Meta’s CFO has projected that after infrastructure, AI specialist salaries will become the second-largest driver of expenditure growth in 2026.

At the same time, Reality Labs continues to burn through cash. Despite generating just 370 million USD in revenue, the division posted a 4.5 billion USD loss for the quarter. Management has already warned of a new wave of investment in mixed reality hardware.

Regulatory risks have intensified on two fronts. Italy’s antitrust authority, AGCM, is investigating whether Meta has violated competition rules by embedding Meta AI into the WhatsApp search bar without explicit user consent – a move that could lead to a fine of up to 10% of the company’s global turnover. Meanwhile, the European Commission has warned that retaining the “pay or consent” model in targeted advertising could result in daily fines of up to 5% of global revenue if the April DMA ruling is not fully implemented.

Among the more positive signals following the report were five specific areas that Mark Zuckerberg himself highlighted as pillars of future growth:

The first is advertising technology. Through a series of upgrades to Andromeda, GEM and Lattice, Meta’s algorithms can now process longer action sequences and more surfaces, delivering an additional 5% in conversions on Instagram and 3% on Facebook. Nearly 2 million advertisers are already using Advantage+ video and text generation tools, which automatically expand banners and translate captions into ten languages, lowering the entry barrier for new clients.

The second area is business messaging. Click-to-message revenue in the US jumped by over 40% year on year, while the broader Family of Apps “other” category grew by 50%, driven by paid chats in WhatsApp and the Meta Verified subscription.

The third area is Threads. The platform’s active user base surpassed 350 million, and May’s update launched video and image ads globally. Although inventory is still limited and doesn’t yet impact total revenue, Meta notes that LLM-based recommendations are already boosting engagement, and as the audience expands, monetisation will scale accordingly.

The fourth area is wearables. Sales of Ray-Ban Meta smart glasses surged during the quarter, with the most popular model still in short supply. Partner EssilorLuxottica reported a more than threefold increase in revenue compared to the same period last year.

The fifth area is Meta AI. The assistant now has over one billion monthly users across WhatsApp, Instagram, and Facebook. In April, it was released as a standalone app, capable of remembering preferences, conducting voice dialogues and synchronising with smart glasses. The company sees this as the foundation of future personal assistants that could eventually accompany users across all devices.

Fundamental analysis of Meta Platforms, Inc.

Operational trends:

• Revenue: 47.5 billion USD (+22%) – growth driven by advertising; impressions +11%, cost per impression +9%
• DAP (Family audience): 3.48 billion (+6%) – steady user growth across all regions

ARPP: 13.65 USD (+15%) – user monetisation continues to strengthen

Profitability and earnings quality:

• Operating income: 20.4 billion USD (+38%) – operating margin rose to 43% (up 38% from a year earlier)
• Net income: 18.3 billion USD (+36%) – net margin of 39%; effective tax rate was just 11%

Cash flows and liquidity (H1 2025 vs H1 2024):

• Operating cash flow: 49.6 billion USD (+28%) – strong inflows supported by advertising receipts
• CapEx: 29.5 billion USD (+102%) – substantial investment in AI infrastructure and data centres
• Free cash flow: 20.1 billion USD (–17%) – FCF compressed by accelerated CapEx (FCF margin: 22%)

Balance sheet resilience:

• Cash and marketable securities: 47.1 billion USD – liquid assets exceed total debt
• Long-term debt: 28.8 billion USD – Net cash position of 18 billion USD (Net debt/EBITDA: –0.2)
• Equity cushion: 106 billion USD – significant capital buffer

Key takeaways from the analysis:

Advertising continues to drive revenue expansion. User numbers are still rising, and an increasing ARPP suggests effective monetisation, even amid a shift towards lower-yield regions.

Margins are at their highest level since 2021. The company easily funds 9.8 billion USD in quarterly buybacks and dividends while maintaining a Net debt/EBITDA ratio below zero. Aggressive cost optimisation during 2023–24 and a reduction in legal penalties have lifted operating profitability to 43%.

Free cash flow remains under pressure due to CapEX. Meta has doubled its investment in new AI data centres and Llama clusters, which is temporarily weighing on liquidity.

Current valuation of Meta Shares (at market price of approx. 760 USD):

• P/E (TTM): 27 – slightly above the Big Tech average, but not excessive
• EV/EBITDA (TTM): 19 – notable premium versus Apple (18) and Microsoft (17)
• FCF yield (TTM): 2% – investors receive just 2 cents of free cash for every dollar invested
• DCF fair value (optimistic ACA 60 billion USD): premium of +75–90% to fair value – no margin of safety. To justify a price of 760 USD, sustainable FCF would need to reach ≥95 billion USD by 2030, with an FCF margin of over 30%. The market is pricing in a supercharged growth scenario

Conclusion on Meta’s current share valuation:

At the current price of around 760 USD, Meta shares trade at a 75–90% premium even to an optimistic DCF scenario. This is no longer a value opportunity, but rather a bet that AI investments will deliver outsized returns and accelerated profitability. In essence, the current share price already reflects a very favourable outlook for growth and AI investment efficiency. Any delay in return on investment (ROI) or a further increase in capital expenditure (CapEX) could reduce Meta’s intrinsic value faster than the market can price it in.

Expert forecasts for Meta Platforms, Inc. stock for 2025

• Barchart: 45 out of 54 analysts rated Meta Platforms’ shares as a Strong Buy, 3 as a Buy, 5 as Hold, and 1 as a Strong Sell. The upper-end target is 1,086 USD; the lower-end target is 582 USD
• MarketBeat: 42 out of 46 experts assigned a Buy rating to the stock, with 4 recommending Hold. The upper-end target is 980 USD; the lower-end target is 600 USD
• TipRanks: 41 out of 46 analysts gave the shares a Buy rating, while 5 recommended Hold. The upper-end target price is 1,090 USD; the lower-end is 685 USD
• Stock Analysis: 22 out of 46 experts rated the shares as Strong Buy, 21 as Buy, and 3 as Hold. The upper-end target is 1,086 USD; the lower-end target is 600 USD

Meta Platforms, Inc. stock price forecast for 2025

On the weekly chart, Meta Platforms shares are trading within an ascending channel. The positive investor reaction to the earnings report triggered a sharp rise in META’s share price, resulting in a new all-time high of 748 USD. However, this increase was accompanied by a divergence on the MACD indicator, which raises the likelihood of a corrective price decline. Based on the current performance of Meta Platforms shares, the possible price movements in 2025 are as follows:

The primary forecast for Meta Platforms shares assumes continued optimistic market sentiment, enabling META to break through the upper boundary of the ascending channel and continue its upward trajectory. The target resistance level is around 1,060 USD.

The alternative stock forecast for Meta Platforms should be considered if support at 740 USD is breached. In this scenario, the MACD divergence may materialise, leading to a correction of META’s share price down to the trend line near 600 USD.

Summary

Meta Platforms is a highly profitable technology giant with a unique advertising ecosystem, a growing user base, and a net cash position of around 18 billion USD. Cost optimisation has lifted the operating margin to 43%, although free cash flow has temporarily declined due to record investments in AI infrastructure and continued losses from Reality Labs.

At a market price of around 760 USD, the share is trading at a significant premium to conservative valuations, meaning investors are effectively paying in advance for a scenario of rapid returns on AI investments and further revenue acceleration. If these ambitious projects succeed, the growth potential remains intact; if they fall short, the elevated valuation offers little protection against a decline in the share price.

Meta is therefore currently better suited to those willing to take on risk in pursuit of large-scale initiatives in AI and VR/AR, rather than investors who prefer to buy assets only when there is a significant margin of safety.

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