US president Donald Trump’s One Big Beautiful Bill Act could see Meta, one of the world’s most valuable companies, have an effective tax rate of 14%, compared with its reported effective tax rate of 87%. It will mean its reported net income of $2.7bn would effectively be $19bn.
The company, which posted third-quarter revenue of $51bn, grew its business by 26%. Total expenses increased to $31bn, up 32% compared with last year.
Capital expenditure, including principal payments on finance leases, were $19.4bn, driven by investments in servers, datacentres and network infrastructure.
Discussing the expenditure, chief financial officer Susan Li said: “Our primary focus is deploying capital to support the company’s highest order priorities, including developing leading AI products, models and business solutions.
“As we make significant investments in infrastructure to support this work, we are focused on preserving maximum long-term flexibility to ensure we can meet our future capacity needs while also being able to respond to how the market develops in the years ahead. We’re doing so in several ways, including staging datacentre sites so we can spring up capacity quickly in future years as we need it, as well as establishing strategic partnerships that give us option value for future compute needs.”
Li said she anticipates total expenses will grow at a significantly faster percentage rate in 2026 than 2025, with growth driven primarily by infrastructure costs, including incremental cloud expenses and depreciation.
“Employee compensation costs will be the second largest contributor to growth, as we recognise a full year of compensation for employees hired throughout 2025, particularly AI talent, and add technical talent in priority areas,” she added.
Beyond the growth in artificial intelligence (AI) and datacentre capital expenditure, Li reported lower revenue in Meta’s Reality Labs business. She put the reduction down to demand for the company’s new headsets.
“The anticipated reduction in Reality Labs revenue is due to us lapping the introduction of Quest 3S in the fourth quarter of last year as well as retail partners procuring Quest headsets during the third quarter of this year to prepare for the holiday season, which were recorded as revenue in the third quarter.”
Discussing the popularity of Meta’s Ray-Bans and Oakley AI glasses, Mark Zuckerberg, Meta founder and CEO, said: “We continue to lead the industry in AI glasses. we’re going to have to invest in increasing manufacturing and selling more of those. This is an area where we’re clearly leading and have a huge opportunity ahead. Taking a step back, if we deliver even a fraction of the opportunity ahead for our existing apps and the new experiences that are possible, then I think that the next few years will be the most exciting period in our history.”
Commenting on Meta’s results, Forrester’s vice-president research director Mike Proulx said: “Unfortunately, Meta’s strong revenue and user growth in Q3 is tainted by significantly increased costs across the board. True to form, Meta’s Reality Labs continued its streak of losses with no signs of slowing down.
“It’s no surprise that Meta’s Ray-Ban Display glasses are generating buzz,” he continued. “This new computing platform piques the curiosity of early adopters. When it comes to hardware devices, Meta has found its niche with AI-powered glasses, while other companies remain fast followers unlikely to catch up in the near term.”
