Meta Shares fell as much as 9% Wednesday after the company reported third-quarter earnings that beat sales, but it also reported a one-time tax charge of $15.93 billion.
Here are the company’s results, compared to the estimates of analysts surveyed by LSEG:
- Earnings per share: $7.25 adjusted. compared to $6.69 estimated
- Income: $51.24 billion versus $49.41 billion estimated
Meta said the implementation of President Donald Trump’s One Big Beautiful Bill Act resulted in a one-time, non-cash income tax burden. The company said it expects the Trump law to result in “a significant reduction” in its federal cash tax payments for the remainder of 2025 and future years.
The company’s third-quarter sales increased 26% year-over-year, marking its strongest revenue growth since the first quarter of 2024.
Meta said it expects fourth-quarter revenue to be between $56 billion and $59 billion. The midpoint of this range is higher than analysts expected, according to StreetAccount.
The company raised its minimum total spending for the year by $2 billion, saying spending will be between $116 billion and $118 billion. This figure was previously $114 billion to $118 billion.
CEO Mark Zuckerberg said Meta constantly needs more computing power for its artificial intelligence initiatives, leading to more spending on data centers and related cloud services.
“This suggests that being able to make a much larger investment here will most likely pay off over a period of time,” Zuckerberg added.
The company also raised its capital spending guidance for 2025, which will now be between $70 billion and $72 billion. Its previous outlook was between $66 billion and $72 billion.
Meta’s Reality Labs hardware unit posted a third-quarter loss of $4.4 billion on revenue of $470 million.
Reality Labs’ fourth-quarter revenue is expected to be lower than the same period in 2024, Susan Li, Meta’s chief financial officer, said on a call with analysts. Li said that was because the company hadn’t launched a new VR headset this year and because retailers who bought inventory of Meta’s previous headset for the holiday shopping season did so during the third quarter.
“We still expect significant year-over-year growth in AI glasses revenue in the fourth quarter as we benefit from strong demand for recent products we have introduced, but this is more than offset by headwinds on Quest headsets,” Li said.
The company in September unveiled the $799 Meta Ray-Ban Display Glasses, which are Meta’s first consumer AI glasses with a built-in display and associated wristband with neural technology. Zuckerberg said the product is sold out and demo slots are reserved until the end of November.
“We are going to have to invest in increasing production and selling more,” he said.
The company said it recorded 3.54 billion daily active people on its apps during the quarter, beating Wall Street expectations of 3.5 billion daily active people.
Meta’s advertising sales totaled $50.08 billion in the third quarter, beating Wall Street expectations of $48.5 billion.
The company spent the year investing heavily in AI and carried out a massive overhaul of the organization leading those efforts following the tepid debut of its open source Llama 4 software in April.
Meta announced last Wednesday that it would lay off about 600 workers at its AI unit Superintelligence Labs, but it left that group’s top-tier TBD Labs unscathed. The day before, Meta announced it had entered into a joint venture agreement with Blue Owl Capital in a deal worth $27 billion to help finance and build a massive data center in Richland Parish, Louisiana.
Meta said its headcount stood at 78,450 as of September 30, representing an 8% year-over-year increase.
The company added Vibes to its Meta AI app in September. This feature is a stream of AI-generated videos. Since Vibes’ release, Meta AI downloads on iOS and Android have increased 56% month-over-month to a total of 3.9 million downloads as of October 18, according to data provided to CNBC by mobile research firm Appfigures.
“Vibes is an example of a new type of AI-enabled content, and I think there are other opportunities to create many more new types of content in the future,” Zuckerberg said.
Correction: Analysts expected Meta’s revenue to be $49.41 billion. This number was incorrectly stated in the previous version of this story.
WATCH: Meta Reports Higher Third-Quarter Profit, Company Takes One-Time Tax Charge
