Meta’s Shares Take a 9% Hit Despite Surpassing Revenue Expectations, Owing to a Hefty $16B Tax Charge
Meta Platforms announced a record-breaking third-quarter revenue of $51.2 billion, surpassing analyst expectations of $49.5 billion. However, the company’s shares experienced a 9% drop in after-hours trading due to a substantial one-time tax charge. The earnings per share, at $1.05, fell significantly short of the $6.72 consensus estimate, a result of a $15.93 billion non-cash tax charge related to Trump’s “One Big Beautiful Bill Act“.
CEO Mark Zuckerberg emphasized the robust performance in AI-driven advertising, with ad revenue reaching a staggering $50.08 billion – a figure ahead of Wall Street’s $48.5 billion expectations. The company reported 3.54 billion daily active users across its platforms and raised fourth-quarter revenue guidance to $56-59 billion. Meta’s commitment to AI investments is evident, with the company raising its 2025 capital expenditure guidance to $70-72 billion, up from the previous $66-72 billion range.
Despite generating $470 million in revenue, Reality Labs posted a $4.4 billion loss. Meanwhile, the company’s new Ray-Ban Display glasses, priced at $799, are reportedly sold out through November. “We’re going to have to invest in increasing manufacturing,” Zuckerberg noted, as Meta continues to heavily invest in AI “superintelligence” capabilities.
Source: CNBC