Meta Platforms Inc. has delivered a robust set of fourth-quarter financial results, comfortably surpassing analyst expectations and triggering a positive after-hours trading response. The social media giant's performance was primarily fuelled by a resilient advertising market, underscoring its continued dominance in the digital ad space.
Financial Performance Exceeds Predictions
The company reported earnings of $22.77 billion, equating to $8.88 per share, for the quarter spanning October to December. This represents a significant 9% increase compared to the $20.84 billion, or $8.02 per share, recorded in the same period the previous year. Perhaps more impressively, Meta's revenue witnessed a substantial jump, growing by 24% to $59.89 billion from $48.39 billion a year earlier.
Analyst Expectations Surpassed
These figures notably outperformed the consensus forecasts from Wall Street. According to data from FactSet, analysts had, on average, anticipated earnings of approximately $8.21 per share on revenue of around $58.5 billion. The stronger-than-anticipated results provided an immediate boost to investor sentiment.
Rising Costs Present a Challenge
However, the financial update was not without its concerns. Meta's expenses continued their upward trajectory, increasing by a substantial 40% to $35.15 billion for the quarter. This surge aligns with prior warnings from the company's leadership about significantly higher costs throughout the current fiscal year.
Forward-Looking Guidance
Looking ahead, Meta has issued guidance that suggests continued revenue strength. For the current quarter, the company is forecasting revenue in the range of $53.5 billion to $56.5 billion, which again sits above the analyst forecast of $51.4 billion. For the full year of 2026, the expense outlook remains elevated, with projections between $162 billion and $169 billion.
The company attributes these rising costs to significant investments in:
- Technical infrastructure and data centres
- Employee compensation and benefits
- Ambitious research and development projects
Workforce Growth and Market Reaction
Meta's headcount also expanded, with the company reporting 78,865 employees at the year's end, marking a 6% increase from the previous year. The market's initial reaction to the mixed news was positive, with shares of the Menlo Park, California-based firm rising by $27.28, or 4.1%, to reach $696.01 in after-hours trading following the announcement.
This financial report paints a picture of a company experiencing strong top-line growth driven by its core advertising business, yet simultaneously grappling with the substantial costs required to fund its future ambitions in areas like artificial intelligence and the metaverse.
