• by Colin Kirkland , Today

In its third-quarter report, Meta showed significant increases in video consumption and active social media users and strong results for its ad business -- but took a massive 83% net profit drop due to a tax imposed by the Trump White House, while also estimating huge long-term expenditures on the development of “superintelligence.”

Following the passage of President Donald Trump’s One Big Beautiful Bill Act, Meta’s third-quarter net profit dropped 83% year-over-year due to the “one-time, non-cash income tax charge of $15.93 billion,” according to a statement from the company.

Expecting a major reduction in U.S. federal cash tax charges in the future, Meta brought in $51.2 billion in Q3, showing a 26% year-over-year increase -- but the compan's net profit dropped from $18.64 billion -- up 19% year-over-year -- to $2.7 billion due to the federal tax.

Meta's expenses also rose to $30.7 billion, up 32% compared to last year.

In its quarterly report, the company lists several reasons for the spending increase.

In addition to the federal tax, Meta says its legal-related expenses rose, along with employee compensation growth due to unprecedented hires in its AI department including Andrew Tulloch, co-founder of AI research and product company Thinking Machine.

Infrastructure costs also skyrocketed this quarter due to investments in Meta's Superintelligence Labs initiative, which requires massive datacenters and costly technology partnerships to run.

Over Q3, the company spent $14.3 billion to acquire a 49% stake in Scale AI -- a startup that operates a global workforce of contractors who label images, text and video for machine learning applications – and hired its CEO Alexandr Wang as Meta's new Chief of AI.

Meta also signed a $27 billion financing deal with Blue Owl Capital to pay for its multi-gigawatt data center Hyperion and $1.5 billion on a data center in El Paso, Texas.

Capital expenditure estimates for 2025 as a whole have risen from $70 billion to $72 billion compared to Meta's previous estimate of $66 billion to $72 billion.

“Our current expectation is that capital expenditures dollar growth will be notably larger in 2026 than 2025,” Meta CFO Susan Li added in the report. “We also anticipate total expenses will grow at a significantly faster percentage rate in 2026 than 2025, with growth driven primarily by infrastructure costs, including incremental cloud expenses and depreciation.”

Aside from its spending, Meta reported 3.54 billion people using at least one of its apps every day across the globe -- marking an 8% year-over-year increase -- while time spent on Facebook and Instagram in the U.S. grew by double digits as a result of increased focus on video-first features.

With the company beginning to test a video-centric feed on Instagram, it shows video consumption rising 30% on the platform since last year.

The tech giant’s ad business is also performing well, with the integration of more AI-driven tools. The number of advertisers now using at least one of Meta's video-generation features inside its Advantage+ Creative suite is up 20% compared to Q2 2025.

In its report, Meta said its unified model architecture Lattice, which rolled out to app ads this quarter, has driven a nearly 3% gain in conversions, while improvements made to its AI-powered ad-delivery system Andromeda drove a 14% increase in advertising quality on Facebook surfaces.

The annual run rate going through Meta's end-to-end AI-powered ad tools has now passed $60 billion.