META 3Q25: Aggressive CapEx Fuels Next‑Year Valuation Debate

We flagged CapEx and EPS risks extensively in our Preview|META 3Q25:What Happens When META Doubles Down on AI Compute, noting that CY2026 EPS growth could be only around 10% and that off–balance sheet CapEx could drive additional opex. META indeed sold off sharply after hours on concerns around its aggressive CapEx stance.

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Results Summary

• Revenue +26% YoY, exactly in line with our model, 3% above Street and 1% above our bogey

• 4Q25 revenue guide: +16% to +22% YoY; at constant currency, the high end implies a ~2pt deceleration vs the 4Q25 guide given at 3Q time (~24%)

• EPS $1.05 reported, driven by a one-off “One Big Beautiful Bill” charge; ex one-time, EPS $7.25, +20% YoY, below our +31% but ~8% above Street

• Ad impressions +14% YoY; CPM +10% YoY — both in line with our estimates

• CapEx $19.37B in the quarter; full‑year CapEx floor raised from $66–72B to $70–72B

• For next year, management noted “capital expenditures dollar growth will be notably larger in 2026 than 2025.” If 2026 CapEx growth matches 2025’s step‑up, CY2026 CapEx would be ~$105B; applying “notably larger” adds ~$10B, implying guidance risk toward ~$115B

• Reality Labs expected to decline YoY in 4Q24 on seasonality

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Call Highlights