Meta still making a motza, but ‘legal and regulatory headwinds’ will impact 2026
Meta’s full-year revenue jumped by 22% to move past the US$200b mark for 2025, but a combination of costly lawsuits, regulations about targeted advertising, and social media bans for teenagers will impact its bottom line in 2026.
The company issued both its Q4 and full-year results overnight, with a number of warnings about the current year’s expenses.
Revenue for the calendar-year 2025 was US$200.97b (A$285b) with December quarter revenue at US$59.89b (A$85b, up 22% year-on-year).
Advertising impressions across Instagram, Whatsapp, and Facebook increased by 12% for the year, and were up 18% for the December quarter. Average price per ad increased by 6% and 9% year-over-year for the fourth quarter and full year 2025, respectively.
Active daily users reached 3.58b on average throughout December, a 7% year-on-year leap. This was not broken down into specific apps, however during the earnings call, CEO Mark Zuckerberg said that “includes more than two billion daily actives each on Facebook and Whatsapp — and just shy of that on Instagram.”
Total costs and expenses for 2025 were US$117.69b, a 24% increase from 2024, including US$72.22b for capital expenditures.
Expenses for 2026 are expected to balloon to US$162-$169b as the digital giant continues to spend big on AI infrastructure and talent.
Meta explained the majority of this “expense growth” will be driven by third-party cloud spend, higher depreciation, higher infrastructure operating expenses, and employee compensation which include “investments in technical talent … to support our priority areas, particularly AI.”
2026 capital expenditures are expected to be in the range of $115-135 billion (a 86.93% increase at the upper level) with this “driven by increased investment to support our Meta Superintelligence Labs efforts [read: its AI incubator] and core business.”
Meta didn’t provide a revenue estimate for 2026, but said it expects to deliver growth.
The forward-looking statements end with a number of sober warnings. Meta will introduce a low-priced, ad-free subscription tier across services in the current quarter, due to recent law charges in the EU regarding personalised advertising.
“However, we continue to monitor legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and financial results. For example, we continue to see scrutiny on youth-related issues and have a number of trials scheduled for this year in the U.S., which may ultimately result in a material loss.”
These trials include a landmark lawsuit over the addictive qualities of social media that commenced this week, one of thousands of similar suits being filed in the US by the Social Media Victims Law Centre.
This week, France has taken the first step in passing a law banning under-15s from social media, following the lead of Australia, while other governments around the world, including in the UK, Malaysia, Norway, and Spain are mulling a similar ban.
In the United States (which legislates at the state level), a number of states, including Georgia, Tennessee, Utah, and Louisiana, have introduced parental consent laws for users under 16, while Florida governor Ron DeSantis signed a bill last month banning under-14s from social media.
Despite the headwinds, Zuckerberg remained optimistic regarding the AI-driven future of his company.
The future will be bright, Zuckerberg says (Credit: Meta)
“I expect 2026 to be a year where this wave accelerates even further on several fronts,” he told investors during the earnings call.
“We’re starting to see agents really work. This will unlock the ability to build completely new products and transform how we work. In ’25 we rebuilt the foundations of our AI program. Over the coming months we’re going to start shipping our new models and products. I expect our first models will be good but, more importantly, will show the rapid trajectory that we’re on. And then I expect us to steadily push the frontier over the course of the year as we continue to release new models.”
He also revealed that Meta is “working on merging LLMs with the recommendation systems that power Facebook, Instagram, Threads, and our ads system”, calling current systems “primitive” compared to what will soon be rolled out.
Zuckerberg’s speech then struck an ominous tone that may not please lawmakers currently looking to legislate against the company’s algorithms.
“Today our systems help people stay in touch with friends, understand the world, and find interesting and entertaining content. But soon, we’ll be able to understand people’s unique personal goals, and tailor feeds to show each person content that helps them improve their lives in the ways that they want.
“This also has implications for commerce. Our ads today help businesses find just the right very specific people who are interested in their products. New agentic shopping tools will allow people to find just the right very specific set of products from the businesses in our catalogue. We’re focused on making these experiences work across both our feeds and across business messaging — significantly increasing the capabilities of Whatsapp over time.”
He noted that “new kinds of content”, driven by AI, will soon be possible.
“Today our apps feel like algorithms that recommend content. Soon, you’ll open our apps and you’ll have an AI that understands you, and also happens to be able to show you great content or even generate great personalised content for you.”
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