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October 30, 2025 • 4 min read
Meta Platforms just released its latest quarterly report, giving us a fresh look under the hood of the social media and technology giant. In these filings, we get to move past the headlines and dig into the actual financial performance. So, what story do the numbers tell for the third quarter of 2025?
At first glance, it's a tale of contrasts. While revenue surged impressively, the bottom-line profit took a nosedive. Let's break down the key takeaways from Meta's latest 10-Q filing.
Meta's primary money-maker, the Family of Apps (FoA) segment—which includes Facebook, Instagram, Messenger, and WhatsApp—is performing exceptionally well. The segment pulled in $50.8 billion in revenue for the quarter, a robust 26% increase from the same period last year.
This growth was fueled by a healthy advertising business. The total number of ad impressions delivered grew by 14% year-over-year, and importantly, the average price per ad also increased by 10%. This two-pronged growth is a strong signal that marketer demand for Meta's ad space remains high. As a result, the FoA segment generated a massive $25 billion in operating income.
Meanwhile, the Reality Labs (RL) division, Meta's bet on the metaverse and AI hardware, saw its revenue jump 74% to $470 million. While the growth rate is impressive, this segment continues to be a major cost center, posting an operating loss of $4.4 billion for the quarter, roughly the same as last year.
Despite the strong revenue, Meta's net income for the quarter was just $2.7 billion, a staggering drop from $15.7 billion in Q3 2024. What happened? The answer lies in a single, massive line item: the provision for income taxes.
Meta recorded an $18.95 billion tax provision for the quarter, pushing its effective tax rate to an astronomical 87%. For comparison, the tax provision in the same quarter last year was just $2.1 billion on an effective rate of 12%. The filing attributes this dramatic increase to a one-time event related to "the implementation of OBBBA." While this is an unusual hit, the company expects its tax rate to return to a more normal 12-15% range in the fourth quarter.
The flow of revenue to profit for the quarter is visualized in the chart below. It clearly shows how the company's strong pre-tax income was almost entirely wiped out by the massive tax expense.
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Meta isn't just spending on its metaverse ambitions; it's also doubling down on the infrastructure needed for artificial intelligence. Total costs and expenses rose 32% to $30.7 billion, outpacing revenue growth.
A key driver was Research and Development (R&D), which soared 35% to $15.1 billion. This highlights the company's aggressive investment in new technologies.
Furthermore, Meta's spending on physical infrastructure—known as capital expenditures—is set to be between $70 billion and $72 billion for 2025. The company also expects "significant capital expenditures growth in 2026" to support its AI efforts. Underscoring this commitment, the filing reveals a new, massive expense: in October 2025, Meta entered into multi-year cloud computing arrangements totaling approximately $40 billion.
Meta's latest quarter paints a clear picture. Its core advertising business is not just stable; it's thriving. This profitable engine is funding enormous, long-term bets on the two technological frontiers Meta believes will define the future: the metaverse and artificial intelligence.
While a one-time tax event skewed the profit numbers this quarter, the more telling story is the sheer scale of investment. With tens of billions flowing into R&D, data centers, and now cloud capacity, Meta is signaling its intention to be a dominant player in the next era of computing, whatever the near-term cost.
Last updated: October 30, 2025