Meta Platforms Q4 Performance Strong, Outlook Optimistic Despite Losses February 9, 2026
Company Overview
Meta Platforms Inc. operates as a leading social media and technology company, managing a family of applications including Facebook, Instagram, WhatsApp, and Threads. The company generates revenue primarily through digital advertising across its platforms while investing heavily in virtual and augmented reality technologies through its Reality Labs division.
Exceptional Q4 Results Exceed Expectations
Meta delivered impressive fourth quarter 2025 results that surpassed analyst expectations, with revenue climbing 24% year-over-year to US$59.9 billion. Adjusted profit after tax and minority interest increased 9% annually to US$22.7 billion, driven by robust advertising revenue growth. Full-year 2025 revenue and profit metrics reached 100% and 110% of forecasts respectively, though earnings were impacted by Reality Labs losses totalling US$19 billion.
Strong Monetisation Across Video Platforms
Video content and Threads demonstrated compelling monetisation and engagement opportunities during the quarter. Instagram Reels watch time surged 30% year-over-year in the United States, while Facebook video watch time grew by double digits. These improvements reflect enhanced recommendation quality and product enhancements across feed and video surfaces.
AI-Driven Advertising Performance
Meta’s advertising segment delivered exceptional performance with ad revenue reaching US$58.1 billion, up 24% year-over-year. The growth was supported by higher user engagement and strong advertiser demand, enhanced by improved ad efficiency through AI integration. Continued model optimisation lifted organic feed and video views by 7%, generating the largest quarterly revenue impact from Facebook product launches in two years.
WhatsApp Business Growth
The Family of Apps “other” revenue segment grew 54% year-over-year to US$8.1 billion, supported by WhatsApp paid messaging and Meta verified subscriptions. Business messaging maintained strong momentum, with click-to-message ads in the US rising more than 50% year-over-year. Paid messaging reached an annual run-rate exceeding US$2 billion in Q4 2025.
Investment Recommendation and Outlook
Phillip Securities Research maintains an ACCUMULATE rating while raising the DCF target price to US$825 from the previous US$770. The firm upgraded FY26 revenue and profit forecasts by 7% and 8% respectively, reflecting expected continued benefits from integrating large language models with Meta’s recommendation systems to enhance ad efficiency and pricing.
Frequently Asked Questions
Q: What were Meta’s key financial results for Q4 2025?
A: Meta reported revenue of US$59.9 billion (up 24% YoY) and adjusted profit of US$22.7 billion (up 9% YoY), with full-year results meeting 100% of revenue forecasts and 110% of profit forecasts.
Q: How did video content perform across Meta’s platforms?
A: Instagram Reels watch time increased 30% year-over-year in the US, while Facebook video watch time grew double digits, supported by improved recommendation quality and product enhancements.
Q: What is Phillip Securities Research’s recommendation for Meta stock?
A: The firm maintains an ACCUMULATE rating and raised the target price to US$825 from US$770, with upgraded FY26 forecasts reflecting expected AI benefits.
Q: How did Reality Labs perform in Q4 2025?
A: Reality Labs remained unprofitable with operating losses widening 21% year-over-year to US$6 billion, though revenue declined 12% due to high comparison base from Quest 3S launch.
Q: What drove Meta’s advertising revenue growth?
A: Ad revenue of US$58.1 billion (up 24% YoY) was driven by higher user engagement, strong advertiser demand, and improved ad efficiency through AI integration and model optimisation.
Q: How is WhatsApp’s business messaging performing?
A: WhatsApp business messaging showed strong momentum with click-to-message ads in the US rising over 50% year-over-year, and paid messaging reaching an annual run-rate exceeding US$2 billion.
Q: What are Meta’s capital expenditure plans for FY26?
A: Meta has guided CAPEX to $115-135 billion for FY26 to support core advertising business and Meta Superintelligent Lab expansion, potentially implying 87% year-over-year growth at the high end.
Q: What is the outlook for Reality Labs losses?
A: Meta expects Reality Labs operating losses to have peaked, with FY26 losses broadly in line with FY25 levels (US$19.2 billion) before gradually narrowing thereafter.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Serena Lim Yi Qi
Serena is a Research Analyst covering the U.S. Technology sector at PSR. Prior to joining the firm, she worked as an Equity Dealer and held various roles across the insurance and banking industries. Serena holds a Bachelor's degree in Economics and a Postgraduate Diploma in Applied Finance from the University of Adelaide.
