Company Overview
Meta Platforms reports its highly anticipated Q4 2025 earnings today after market close, with analysts expecting revenue of $46.9 billion (up 16% year-over-year) and earnings per share of $6.78. The stock has been on a remarkable run, up over 60% in the past year, driven by the company’s successful AI integration into advertising products and surprising resilience in user engagement across Facebook, Instagram, and WhatsApp despite increasing competition from TikTok.
What makes today’s earnings particularly compelling is the convergence of multiple positive trends. Meta’s AI-powered advertising platform has driven significant improvements in ad targeting and conversion rates, allowing the company to command premium pricing. Family of Apps revenue (Facebook, Instagram, WhatsApp, Threads) is expected to show 18% growth, while Reality Labs—the metaverse division that’s been a massive cash drain—is projected to narrow losses significantly as Quest 3 headset sales accelerate and enterprise AR applications gain traction.
Key Technical and Fundamental Drivers
Earnings Catalyst → Today After Close
Meta reports Q4 2025 earnings today (February 5th) after market close, with analysts expecting $46.9B revenue (up 16%) and $6.78 EPS, providing immediate catalyst for stock movement.
AI Advertising Revolution → 20%+ ROAS Improvement
Meta’s AI-powered advertising tools (Advantage+ campaigns) are delivering 20%+ improvements in return on ad spend, driving advertiser demand and pricing power despite macro headwinds.
User Engagement Strength → 3.3B Daily Users
Daily active people across Meta’s family of apps reached 3.3 billion in Q3, with engagement time actually increasing as Reels competes effectively against TikTok.
Reality Labs Inflection → Quest 3 Momentum
The Reality Labs division is expected to show narrowing losses as Quest 3 mixed reality headsets gain traction, with some analysts projecting the division could break even by 2027.
Margin Expansion → Operating Leverage
Despite massive AI infrastructure investments, Meta is expected to show operating margin expansion to 42%+ as advertising revenue growth outpaces expense growth.
Market Takeaway
Meta’s earnings today after the close represent one of the most significant tech catalysts this week. The company has successfully navigated multiple existential threats over the past few years—Apple’s privacy changes, TikTok competition, metaverse skepticism—and emerged stronger with AI-powered advertising delivering tangible results. The 20%+ improvements in return on ad spend from Advantage+ campaigns aren’t marketing hype; they’re showing up in advertiser budgets and Meta’s revenue growth.
The key questions traders will focus on today: Can Meta maintain 15%+ revenue growth despite tough comparisons? Is Reality Labs loss narrowing on schedule? What’s the 2026 capex guidance for AI infrastructure? Most importantly, how is AI monetization progressing beyond advertising into new products like Meta AI assistant? With the stock up 60% over the past year, expectations are high, but Meta has consistently beaten estimates for six straight quarters. The company’s 3.3 billion daily active users represent an irreplaceable asset, and the AI advertising improvements are still in early innings as more features roll out. Volatility is likely in after-hours trading as investors digest the results, but the fundamental story of an advertising giant successfully pivoting to AI leadership remains compelling. Traders should watch for management commentary on AI product roadmap and 2026 investment plans during the earnings call.