Meta's AI Capex Doubles to US$135bn as Profit Surge

Meta Platforms delivered robust financial results for the fourth quarter and full year of 2025, supported by a rebound in advertising demand and early gains from AI-driven performance across its platforms.

The Facebook and Instagram owner reported that revenue for the three months to the end of December rose 24% year-on-year to US$59.9bn, comfortably ahead of market expectations.

Net income increased 9% to about US$22.8bn, while full-year revenue advanced 22% to US$201bn.

Mark Zuckerberg, Meta’s Founder and CEO, said during the 28 January earnings call: "We had a strong business performance in 2025. Our business also platformed very well thanks to record-breaking holiday demand and AI-driven performance gains."

The results helped lift Meta’s share price by roughly 6–10% in extended trading following the announcement.

Ads remain the engine of growth

Advertising continues to underpin Meta's performance, generating US$58.1bn in quarterly revenue, an increase of 24% from the prior year.

The company said this momentum was fuelled by an 18% rise in ad impressions alongside a 6% increase in the average price per advert.

Meta’s platforms now touch vast audiences each day, with family daily active people averaging 3.58bn in December, a 7% year-on-year gain, and Facebook, Instagram and WhatsApp each approaching or surpassing two billion daily users.

Despite the strong top-line expansion, profitability came under some pressure as spending ramped up, with quarterly costs and expenses climbing 40% to US$35.1bn and the operating margin narrowing to 41% from 48% a year earlier.

Susan Li, Meta’s Chief Financial Officer, said the increase reflected intentional investment decisions: "Year-over-year growth was driven primarily by employee compensation expenses, legal expenses and infrastructure costs."

She noted that higher compensation was tied to “the technical hires we’ve added this year, particularly AI talent.”

Spending surge signals AI ambition 

Meta also set out plans for a dramatic escalation in investment during 2026, particularly in AI transformation.

The company expects capital expenditure to range between US$115bn and US$135bn this year, almost double the US$72.2bn spent in 2025.

The earnings call outlined that the majority of that funding will be directed towards data centres, servers and networking equipment required to train and deploy increasingly sophisticated AI models.

Mark said: "We are now seeing a major AI acceleration. I expect 2026 to be a year where this wave accelerates even further."

Over the past three years, Meta has spent roughly US$140bn on AI-related projects as it seeks to compete with rivals such as Google and OpenAI.

"As we plan for the future, we will continue to invest very significantly in infrastructure to train leading models and deliver personal superintelligence to billions of people and businesses around the world," the CEO added.

Productivity gains reshaping the workforce

Meta said AI is transforming not just its products but also internal operations.

Susan pointed to significant efficiency improvements from AI-assisted development tools, noting: "Since the beginning of 2025, we've seen a 30% increase in output per engineer."

Mark noted these shifts could reshape workforce dynamics: "We're starting to see projects that used to require big teams now be accomplished by a single very talented person."

The remarks came after recent job reductions, including several hundred positions cut from Meta's Reality Labs division, home to its virtual reality and metaverse initiatives.

Financial position and outlook

Meta affirmed confidence in its financial position. The company closed 2025 with US$81.6bn in cash and marketable securities, anticipating that operating cash flow will largely fund its expansion.

"Despite the meaningful step up in infrastructure investment," Susan said, "in 2026 we expect to deliver operating income that is above 2025 operating income."