How will AI investments and Reality Labs shape Meta’s Q4 performance?

When will Meta report its latest earnings?

Meta Platforms is scheduled to report its fourth quarter (Q4) earnings after the market closes on Wednesday, 28 January 2026.

Highlights from the previous quarter

For the third quarter (Q3) 2025, Meta delivered a strong revenue beat of $51.24 billion versus $49.41 billion expected, alongside a normalised earnings per share (EPS) beat of $7.25 per share compared to $6.67 expected, adjusted for a one-time, non-cash tax charge. Note that generally accepted accounting principles (GAAP) EPS was heavily impacted at $1.05 due to a $15.93 billion non-recurring tax provision related to new United States (US) tax law changes (the One Big Beautiful Bill Act).

The company reported the following Q3 2025 operational highlights:

• Revenue: was $51.24 billion, an increase of 26% year-on-year (YoY)
• Family daily active people (DAP): averaged 3.54 billion in September 2025, up 8% YoY
• Ad impressions: delivered across the family of apps increased by 14% YoY
• Average price per ad: rose 10% YoY
• Headcount: stood at 78,450 as of 30 September 2025, an increase of 8% YoY

Meta founder and chief executive officer (CEO) Mark Zuckerberg highlighted the robust performance, stating, 'We had a strong quarter for our business and our community. Meta Superintelligence Labs is off to a great start and we continue to lead the industry in AI glasses. If we deliver even a fraction of the opportunity ahead, then the next few years will be the most exciting period in our history.'

Despite the solid underlying results and continued momentum in artificial intelligence (AI)-driven engagement, advertising efficiency, and user growth, Meta’s Q3 report received a mixed-to-negative reception. Its share price tumbled 11.33% to $666.47 the next session, primarily due to the one-time tax hit distorting GAAP figures, raised full-year capital expenditures (capex) guidance to $70 - 72 billion (driven by AI infrastructure), and expectations for even faster expense growth in 2026 to support ongoing AI investments.

Summary of Meta’s Q3 earnings results 

Q4 2025 earning expectations

• Revenue: $56.59 billion
• EPS: $8.21

During its Q3 earnings report, Meta said it expected Q4 2025 revenues to be in the range of $56 billion - $59 billion, with the consensus forecast on London Stock Exchange Group (LSEG) standing at $56.59 billion. This would represent approximately 21% YoY growth.

The company also said that it expected full-year 2025 expenses to be in the $116 billion - $118 billion range, updated from previous guidance of $114 billion - $118 billion and reflecting a growth rate of 22% - 24% YoY.

As mentioned above, 2025 capex, including principal payments on finance leases, are expected to be in the range of $70 billion - $72 billion, increased from prior guidance of $66 billion - $72 billion.

Meta sales revenue by user geography chart

Reality Labs challenges

Meta’s Q3 earnings report and call clearly spotlighted the ongoing challenges facing its Reality Labs. The division posted an operating loss of $4.43 billion for the quarter, consistent with prior periods and contributing to cumulative losses well over $70 billion since 2021.

While revenue grew 74% YoY to $470 million, driven by Quest headset pre-stocking and strong early demand for AI-enhanced Ray-Ban Meta smart glasses, management explicitly guided for a YoY revenue decline in Q4. This headwind stems from lapping the prior year’s Quest 3S launch and the absence of new virtual reality (VR) headset releases in 2025.

Key areas to watch

In addition to the headline revenue and EPS figures, investors will zero in on several key areas during Meta's Q4 2025 earnings report. These build on the momentum from Q3's strong ad-driven performance while grappling with the company's massive AI infrastructure buildout and ongoing Reality Labs challenges.

Advertising performance

Advertising remains the core engine, with family of apps ad revenue surging 26% YoY in Q3 to around $50.1 billion. The market will watch closely for sustained momentum in Q4, especially given holiday-season tailwinds and AI-powered enhancements to ad targeting, ranking, and conversions.

User engagement metrics

Family DAP averaged 3.54 billion in Q3, up 8% YoY, fuelled by video strength (particularly Reels) and healthy non-video growth. Investors will look for further expansion in user time spent, especially in the US, where time on Facebook and Instagram grew double digits, and updates on how AI-driven recommendations continue boosting engagement across apps.

AI integration and impact

AI is now front and centre, with Meta Superintelligence Labs off to a strong start and heavy emphasis on next-generation models, compute infrastructure, and multimodal capabilities - including augmented reality (AR) glasses as data-capture tools. The market will seek concrete evidence of monetisation progress, such as AI improving ad performance, user retention, and features like Reels watch time, while assessing whether these investments are translating into measurable return on investment (ROI) amid the aggressive spending ramp.

Expenses, capex and profitability

Meta raised full-year 2025 capex guidance to $70 billion - $72 billion (up from prior ranges), driven primarily by AI infrastructure (data centres, hardware, and cloud). Q4 will include scrutiny of any hints about 2026 spending, which management has flagged as 'notably larger' in dollar growth terms, plus total expenses projected at $116 billion -$118 billion for 2025 (22% - 24% YoY growth).

Reality Labs performance

This division continues to be a cash burn story as mentioned above. Guidance already flags a YoY revenue headwind in Q4 (due to lapping the Quest 3S launch and holiday stocking shifts), so expect details on losses, progress with AR glasses (strong early sell-outs), and any strategic pivots or budget adjustments for 2026, as AI increasingly takes priority over pure metaverse bets.

Forward guidance

Beyond the numbers, the real market mover will be updated outlooks for 2026, covering revenue trends, expense acceleration, capex trajectory, AI ROI signals, and any shifts in Reality Labs strategy. With consensus already baking in solid growth, any surprises on spending intensity or AI payoff could drive volatility.

Is Meta a buy or a sell?

Meta has a TipRanks Smart Score of 8 'outperform' and is rated as a 'strong buy' by analysts, with 37 'buy', 6 'hold', and 1 'sell' recommendations as of 20 January 2026.

Meta TipRanks Smart Score 

Meta technical analysis

Meta shares closed out 2025 with a 12.74% gain, finishing the year at $660.09. This performance lagged the Nasdaq 100, which delivered a stronger 21% total return.

The year was highly volatile for tech stocks in general and for Meta, as it dipped to a low of $479.80 in April before mounting an impressive rally of more than 67% to reach an all-time high of $796.25 in August.

Since peaking, Meta has faced steady pressure, declining in four of the past five months. The pullback has brought the price back toward a vital long-term uptrend support zone near $595, anchored by the extended trendline from the October 2022 low of $88.09 and reinforced by the November 2025 low at $581.25.

Meta needs to remain above support at $595 - $580 to preserve the multi-year bullish structure and open the door for a potential rebound toward the $796.25 record high. However, a decisive break below this support zone could trigger a deeper correction, first targeting the $479.80 low, then the rising 200-week moving average around $415.

Meta weekly candlestick chart

• _{Source: TradingView. The figures stated are as of 20 January 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}