Meta is growing earnings much faster than its Magnificent Seven peers – except Nvidia.
In fact, it last reported a strong quarter for 2Q2025. And will be releasing its upcoming third quarter financial results later this month.
Given the strong quarterly results, Meta’s stock rose ~11% following its last earnings announcement.
As the parent company of our favourite social media platforms – Facebook, Whatsapp and Instagram – Meta sees more than 3.4 billion users daily.
Like the other tech giants, Meta focuses heavily on the AI stack. During its last 2Q2025, the company showed its commitment.
This was via acquisitions, the hiring of top tech talents and infrastructure investments.
Here’s why Meta is growing much faster than its peers.
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1. Meta’s Strong Revenue Growth and Expanding Margins
Earlier in 2Q2025 results, Meta reported $47.5 billion revenue during the quarter. This was up 22% y/y. Notably, it is also above the company’s expectations, which were between $42.5 billion to $45.5 billion.
Its revenues were largely cyclical for Meta, rising through the quarters of the year. 2Q2025’s jump from Q1 was 12%. This is bigger than the 7% q/q jump in 2Q2024.
Total expenses were $27.1 billion, a 12% increase y/y. Operating income therefore landed at $20.5 billion, which is up 37% versus 2Q2024 income.
This raised Meta’s operating margin to 43% during the same period, which was up form 38% compared to last year. This showed strong operating leverage. Overall, the company has raised profitability this quarter.
2. Advertising remains Meta’s Revenue Powerhouse
Advertising continues to drive Meta’s business – bringing in ~US$46 billion, or 98% of its total revenue in its last quarter. This was 21% higher as compared to the year before.
Meta’s AI investments have improved its advertising performance efficiency. The new AI-powered recommendation model has increased ad conversions on Instagram and Facebook.
What’s more, AI is also contributing via its creative Ad generation. Ad revenue has also stemmed from campaigns, which uses one of Meta’s Generative AI features.
Meta divides its ad revenue by geographical region. This is 2Q2025’s ad revenue split across the four markets.
In all four markets, ad revenue grew by at least 18% y/y.
This was strongest in Europe, at 24%. Advertiser demand has also increased, given improved ad performance. Meta saw the average price per ad increase by 9%.
3. Meta’s Family of Apps Expanding its Global Reach
Meta’s Family of Apps – including Facebook, Messenger, Whatsapp, Instagram and Threads – continues to be the backbone of its ad ecosystem.
During 2Q2025, Meta reported 3.48 billion daily active users on average. This is a 6% y/y growth. Meanwhile, Ad impressions were also reported to increase by 11% y/y.
Overall, its Family of Apps revenue was $47.1 billion, up 22% y/y. Its Family of Apps expenses were $22.2 billion. This was up 14% y/y, due to increases in employee compensation and infrastructure costs. Even so, Meta’s Family of Apps segment maintained an impressive 53% operating margins.
Beyond advertising, the Family of Apps also generates revenue via other channels.
This segment had a standout performance. Family of Apps other revenue grew by 50% in 2Q2025. This is driven by WhatsApp paid messaging and Meta Verified subscriptions.
4. Reality Labs still losing money – But Meta is playing the long game
Meta’s Reality Lab, which focuses on producing augmented reality and virtual reality products, has been losing money.
This includes its AI glasses, along with the virtual headset line, Quest, and games such as Horizon Worlds.
Even though it produced ~US$370 million in revenues, it continued to rack losses of US$4.5 billion. This was despite sales of its AI glasses growing – especially its Ray-Ban glasses.
Meta said it will continue to invest in this segment. CEO Mark Zuckerberg said the team is “several years ahead on building out glasses”.
He believes this line of products will be an important part of the future.
This was further seen during Meta’s annual Connect conference on Sep 19. It is an annual conference which Meta holds to unveil its latest innovations.
More importantly, this is a showcase of the fruits of the company’s Reality Labs investments.
This year’s conference saw Meta introduce three new smart glasses. This included the Meta Ray-Ban Display that comes with a new wristband controller.
5. Meta’s AI bets
Along with its fellow big tech counterparts, Meta’s AI investments are accelerating. This is clear from both hiring and digital infrastructure perspectives.
So far, Meta has built a team of AI researchers to run its Meta Superintelligence labs. The company reports good progress towards their AI models Llama 4.1 and 4.2.
And this is alongside their work on the next generation of models that they are looking to release.
To back these efforts, Meta has also made headlines for its investments in its multi-GW data centre clusters.
These include the Prometheus cluster, which according to Meta will be “the world’s first 1GW+ cluster” and is scheduled to come online in 2026.
In parallel, they are also building out Hyperion, which is said to be able to scale up to five times the size of Prometheus, at 5GW over the coming years. Both projects are underway in the US.
These investments are expected to be worth hundreds of billions of dollars.
My final thoughts
So far, Meta shares continued to climb higher. And it’s not hard to see why. Meta’s revenue and operating income growth with ad revenue growth and expanding AI adoption leading the way.
Meanwhile, its Reality Labs will continue to weigh on earnings. However, revenue from engagement and advertising will provide a strong foundation for this expenditure.
In all, Meta’s investments show it is positioning itself not just as a social media giant, but as a leader in consumer-facing AI.
Over the long run, Meta’s integration of AI across its platforms could open up new revenue streams and deeper user engagement.
With that, Meta expects its third quarter 2025 total revenue to be in the range of $47.5 billion to $50.5 billion. In other words, 2Q2025’s revenue is the baseline expected number for next quarter.
