{"id":342836,"date":"2025-10-30T09:47:20","date_gmt":"2025-10-30T09:47:20","guid":{"rendered":"https:\/\/www.europesays.com\/us\/342836\/"},"modified":"2025-10-30T09:47:20","modified_gmt":"2025-10-30T09:47:20","slug":"reality-labs-taxes-hit-meta-hard-in-q3-2025-earnings-as-zuckerberg-explains-when-ai-glasses-will-become-profitable","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/342836\/","title":{"rendered":"Reality Labs, taxes hit Meta hard in Q3 2025 earnings as Zuckerberg explains when AI glasses will become &#8216;profitable&#8217;"},"content":{"rendered":"<p><a id=\"elk-4c074b86-fa88-467c-a7f0-d2a111706911\" href=\"\" data-url=\"\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" data-hl-processed=\"none\"\/>What you need to know<\/p>\n<ul id=\"27f365cb-a83c-47f1-8368-6c2bfa677dc0\">\n<li>Meta earned $51.2 billion in revenue, mainly advertising, but just $2.7 billion in net income thanks to a One Beautiful Bill income tax and AI infrastructure CapEx.<\/li>\n<li>Reality Labs lost $4.4 billion this quarter, and is expected to do worse next quarter without a new Meta Quest launch.<\/li>\n<li>Instagram and Threads user count rose to 3 billion and 150 million, respectively.<\/li>\n<li>The company will continue to invest tens of billions in Meta Superintelligence Labs in 2026, and may lose money on lawsuits related to child safety.<\/li>\n<\/ul>\n<p id=\"65f91529-116c-4686-9d2c-21addcd33703\">Meta is earning more advertising revenue than ever, and keeping people on its apps for longer, using AI, Mark Zuckerberg boasted during Meta&#8217;s Q3 2025 earnings call. But it&#8217;s also spending tens of billions on AI infrastructure to &#8220;front-load&#8221; computing capabilities for an AI Superintelligence, to the point that investors are spooked.<\/p>\n<p>Zuckerberg and CFO Susan Li outlined the company&#8217;s highest-ever $51.2 billion revenue this quarter, but Meta&#8217;s net income fell 83% YoY, thanks to major AI CapEx spending and a one-time $15.9 billion income tax from Trump&#8217;s 2025 tax bill.<\/p>\n<p><a id=\"elk-seasonal\" class=\"paywall\" aria-hidden=\"true\" href=\"\" data-url=\"\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" data-hl-processed=\"none\"\/><\/p>\n<p id=\"65f91529-116c-4686-9d2c-21addcd33703-2\">Tax one-off aside, Meta is promising that spending $19.4 billion this quarter on AI servers, data centers, and network infrastructure is &#8220;very likely to be a profitable thing&#8221; by accelerating their AI research on Superintelligence and producing better ads. It&#8217;s a familiar strategy for Meta, which spends heavily on big-picture ideas like the &#8220;Metaverse&#8221; with the hypothetical promise of future ROI.<\/p>\n<p>You may like<\/p>\n<p><a id=\"elk-8bfddd35-35a5-4a5e-8330-46a8617b33af\" class=\"paywall\" aria-hidden=\"true\" href=\"\" data-url=\"\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" data-hl-processed=\"none\"\/>Promising a &#8216;profitable&#8217; future for Reality Labs (eventually) after years of losses<\/p>\n<p class=\"vanilla-image-block\" style=\"padding-top:56.25%;\">\n<p><img decoding=\"async\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/QjHJZhW3arj9DJ3fRndTsX.jpg\" alt=\"Meta CEO Mark Zuckerberg in front of a large visual showcasing the company's range of smart glasses\"   loading=\"lazy\" data-new-v2-image=\"true\" data-original-mos=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/QjHJZhW3arj9DJ3fRndTsX.jpg\" data-pin-media=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/QjHJZhW3arj9DJ3fRndTsX.jpg\"\/>\n<\/p>\n<p>(Image credit: Jitesh Ubrani \/ IDC)<\/p>\n<p id=\"cad2b45b-a2ec-47db-ae44-d54b83f809fa\">Meta boasted in the Q3 earnings call about the success of their recent AI glasses, including selling out most <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.androidcentral.com\/wearables\/meta-ray-ban-display-glasses\" data-before-rewrite-localise=\"https:\/\/www.androidcentral.com\/wearables\/meta-ray-ban-display-glasses\" target=\"_blank\" rel=\"noopener\">Meta Ray-Ban Display<\/a> store stock within &#8220;48 hours.&#8221; But Reality Labs R&amp;D remained predictably expensive, costing them $4.4 billion in net losses this quarter after $470 million in revenue.<\/p>\n<p>According to Li, even though they expect &#8220;significant YoY growth in AI glasses revenue&#8221; next quarter, thanks to the <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.androidcentral.com\/wearables\/ray-ban-meta-gen-2-review\" data-before-rewrite-localise=\"https:\/\/www.androidcentral.com\/wearables\/ray-ban-meta-gen-2-review\" target=\"_blank\" rel=\"noopener\">Ray-Ban Meta Gen 2<\/a> and <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.androidcentral.com\/wearables\/oakley-meta-vanguard-hands-on\" data-before-rewrite-localise=\"https:\/\/www.androidcentral.com\/wearables\/oakley-meta-vanguard-hands-on\" target=\"_blank\" rel=\"noopener\">Oakley Meta Vanguard<\/a> glasses, profits will be &#8220;more than offset by the headwinds of Quest headsets,&#8221; because there&#8217;s no <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.androidcentral.com\/gaming\/virtual-reality\/meta-quest-3s-review\" data-before-rewrite-localise=\"https:\/\/www.androidcentral.com\/gaming\/virtual-reality\/meta-quest-3s-review\" target=\"_blank\" rel=\"noopener\">Quest 3S<\/a> launch this year.<\/p>\n<p>It&#8217;s a bit surprising that Ray-Ban sales aren&#8217;t expected to cut into Reality Labs&#8217; losses, or at least match past Quest headsets&#8217; success during the holidays. Despite this, Zuckerberg assured investors that &#8220;it will be a very profitable investment&#8221; eventually, starting with revenue from selling the glasses and then building &#8220;services&#8221; on the hardware.<\/p>\n<p class=\"vanilla-image-block\" style=\"padding-top:56.27%;\">\n<p><img decoding=\"async\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/WfJwTcTyjYj89WX4AsjAHg.jpg\" alt=\"Three Oakley Meta HSTN, three Oakley Meta Vanguard, and three Ray-Ban Meta (Gen 2), along with cases, sitting atop a table in various styles, along with the Meta Ray-Ban Display glasses in front of them all.\"   loading=\"lazy\" data-new-v2-image=\"true\" data-original-mos=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/WfJwTcTyjYj89WX4AsjAHg.jpg\" data-pin-media=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/WfJwTcTyjYj89WX4AsjAHg.jpg\"\/>\n<\/p>\n<p>Meta&#8217;s 2025 AI glasses lineup (Image credit: Michael Hicks \/ Android Central)<\/p>\n<p id=\"07790a8f-0fef-4e80-ab0b-89f695315802\">Zuckerberg continued on by explaining that R&amp;D costs will continue for future devices like <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.androidcentral.com\/gaming\/virtual-reality\/meta-orion-hands-on\" data-before-rewrite-localise=\"https:\/\/www.androidcentral.com\/gaming\/virtual-reality\/meta-orion-hands-on\" target=\"_blank\" rel=\"noopener\">Meta Orion<\/a>, their full-FoV AR glasses, and that smart glasses are still &#8220;earlier in their curve&#8221; before it can become a &#8220;sustained business.&#8221;<\/p>\n<p class=\"newsletter-form__strapline\">Get the latest news from Android Central, your trusted companion in the world of Android<\/p>\n<p>Eventually, however, they plan to reach &#8220;many hundreds of millions or billions of people, and that&#8217;s the point at which we think this is going to be an extremely profitable business,&#8221; Zuckerberg concluded.<\/p>\n<p>The Meta CEO first brought up the idea of <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.androidcentral.com\/gaming\/virtual-reality\/zuckerberg-wants-billions-of-ai-glasses-worldwide-is-that-possible\" data-before-rewrite-localise=\"https:\/\/www.androidcentral.com\/gaming\/virtual-reality\/zuckerberg-wants-billions-of-ai-glasses-worldwide-is-that-possible\" target=\"_blank\" rel=\"noopener\">billions of smart glasses<\/a> in an earlier earnings call; current estimates suggest it&#8217;s still well short of ten million, but EssilorLuxottica plans to sell 10 million pairs of AI glasses per year starting in 2026, with Meta as its primary partner.<\/p>\n<p><a id=\"elk-c122e5db-d8d4-44c4-a96a-9c4c61a70cd2\" class=\"paywall\" aria-hidden=\"true\" href=\"\" data-url=\"\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" data-hl-processed=\"none\"\/><\/p>\n<p class=\"vanilla-image-block\" style=\"padding-top:56.27%;\">\n<p><img decoding=\"async\" src=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/zuwB8uGQSdre52kaVNFjSC.jpeg\" alt=\"The Meta sign at the company campus at 1 Hacker Way.\"   loading=\"lazy\" data-new-v2-image=\"true\" data-original-mos=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/zuwB8uGQSdre52kaVNFjSC.jpeg\" data-pin-media=\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/zuwB8uGQSdre52kaVNFjSC.jpeg\"\/>\n<\/p>\n<p>(Image credit: Michael Hicks \/ Android Central)<\/p>\n<p id=\"263683ed-44b8-493f-b11b-146f53719639\">Meta claims that after this one &#8220;Big Beautiful Bill&#8221; tax payoff, there will be a &#8220;significant reduction in our U.S. federal cash tax payments,&#8221; lowering operations costs moving forward. But Meta will likely reinvest that money in AI instead.<\/p>\n<p>After spending $70\u201372 billion total on CapEx in 2025, Li warns that &#8220;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.&#8221;<\/p>\n<p>This will help Meta build its <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.anrdoezrs.net\/click-100048248-15736996?sid=ac-us-1417378875037149236&amp;url=https:\/\/www.meta.com\/superintelligence\/?PID=100048248&amp;cjevent=1a95a986b52411f0817100260a1cb829&amp;utm_source=cj&amp;utm_medium=affiliate&amp;utm_campaign=creatoraffiliate&amp;utm_parent=frl\" data-url=\"https:\/\/www.meta.com\/superintelligence\/?PID=100048248&amp;cjevent=1a95a986b52411f0817100260a1cb829&amp;utm_source=cj&amp;utm_medium=affiliate&amp;utm_campaign=creatoraffiliate&amp;utm_parent=frl\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" rel=\"sponsored noopener\" data-hl-processed=\"hawklinks\" data-placeholder-url=\"https:\/\/www.anrdoezrs.net\/click-100048248-15736996?sid=hawk-custom-tracking&amp;url=https:\/\/www.meta.com\/superintelligence\/?PID=100048248&amp;cjevent=1a95a986b52411f0817100260a1cb829&amp;utm_source=cj&amp;utm_medium=affiliate&amp;utm_campaign=creatoraffiliate&amp;utm_parent=frl\" data-google-interstitial=\"false\" data-merchant-name=\"Meta\" data-merchant-id=\"543744\" data-merchant-network=\"CJ\" data-merchant-url=\"meta.com\">Superintelligence<\/a> that &#8220;knows us deeply, understands our goals, and can help us achieve them.&#8221; Zuckerberg suggested that they&#8217;re working on &#8220;truly frontier models with novel capabilities,&#8221; though he didn&#8217;t say when these advanced AI tools will arrive.<\/p>\n<p>Meta also warned investors that continued pressure from the European Union could lead to &#8220;significant negative impact on our European revenue,&#8221; while in the U.S., &#8220;a number of youth-related trials are scheduled for 2026&#8221; that could lead to losses. Meta has come under fire for allegedly <a data-analytics-id=\"inline-link\" href=\"https:\/\/www.bbc.com\/news\/articles\/c5y8x3md05no\" data-url=\"https:\/\/www.bbc.com\/news\/articles\/c5y8x3md05no\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" data-hl-processed=\"none\" rel=\"noopener\">covering up potential harms to children<\/a> from VR games.<\/p>\n","protected":false},"excerpt":{"rendered":"What you need to know Meta earned $51.2 billion in revenue, mainly advertising, but just $2.7 billion in&hellip;\n","protected":false},"author":3,"featured_media":342837,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[158,67,132,68,729,730],"class_list":{"0":"post-342836","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-virtual-reality","8":"tag-technology","9":"tag-united-states","10":"tag-unitedstates","11":"tag-us","12":"tag-virtual-reality","13":"tag-vr"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115462488149496695","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/342836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=342836"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/342836\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/342837"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=342836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=342836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=342836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}