Meta Platforms, Inc. (META) Business Profile

What it does

Meta Platforms is a technology company founded in 2004 and headquartered in Menlo Park. Mark Zuckerberg is its chief executive. Its purpose is to build products that let people communicate, share content, find communities, discover information and connect with businesses.

Its Family of Apps includes Facebook, Instagram, Messenger, WhatsApp, Meta AI and Threads. Facebook offers Feed, Reels, Stories, Groups and Marketplace. Instagram combines photos, video, messaging and shopping. Messenger and WhatsApp provide text, audio and video communication; WhatsApp also supports business communication and transactions. Threads is a service for text-based updates and public conversations. Meta AI is an assistant available in Meta’s apps, as a stand-alone app, on AI glasses and on the web.

The company also operates Reality Labs, which develops virtual- and augmented-reality hardware, software and content. Its current products include Meta Quest devices and the Meta Horizon Store, plus Ray-Ban Meta and Oakley Meta AI glasses. Meta Ray-Ban Display combines AI glasses with a display integrated into the lens and a wrist-worn Meta Neural Band controller.

Meta uses AI across content ranking, recommendations, advertising tools, generative-AI experiences and product development. It also trains AI models and develops a combination of open and closed models. In Q3 2026, its Family of Apps was used by 3.64 billion people each day.

How it makes money

Meta reports two segments: Family of Apps and Reality Labs. Family of Apps includes Facebook, Instagram, Messenger, WhatsApp and other services. Reality Labs includes virtual- and augmented-reality consumer hardware, software and content.

Family of Apps generates substantially all of Meta’s revenue by selling advertising placements to marketers. Ads can appear on Facebook, Instagram, Messenger, Threads, WhatsApp, third-party applications and websites. Marketers use the ads for objectives including awareness and lead generation. Most advertisers use the self-service ad platform to launch and manage campaigns, while a global sales force also works directly with advertisers, agencies and resellers through planning, campaign optimization and analytics.

Advertising revenue is linked to the number of ads delivered and the price per ad. Meta’s systems use data signals and AI to deliver, target and measure ads, while advertisers can use creative and campaign-management tools. In Q3 2026, nearly 10 million advertisers used at least one generative-AI ad-creative tool. Partnership ads, which let advertisers run ads with creators, brands and other businesses, surpassed a $15 billion annual revenue run rate in Q3 2026.

Other Family of Apps revenue includes paid messaging on WhatsApp, Meta Verified subscriptions, fees from developers using payments infrastructure and other sources. Meta 1 is a subscription service across Facebook and WhatsApp with more than 50 features, including Meta Business Agent and Meta AI; it surpassed 15 million subscriptions and trials.

Reality Labs earns revenue from consumer hardware, software and content. Meta’s revenue totaled $200.97 billion in 2025 and $64.6 billion in Q3 2026.

Customers and how it sells

Meta serves people using its social, messaging, video, AI and hardware products; marketers buying advertising; businesses using messaging, advertising and business tools; developers; and consumer and enterprise buyers of Reality Labs products. Family daily active people are registered and logged-in users of Facebook, Instagram, Messenger or WhatsApp who visit at least one of those products on a given day.

Worldwide Family daily active people averaged 3.58 billion during December 2025. Meta said 3.64 billion people used its Family of Apps each day in Q3 2026. The company estimates that at least 500 million self-identified small businesses use its Family of Apps to reach customers and generate revenue. More than 1 million businesses were using Meta Business Agents on WhatsApp and Messenger weekly in Q2 2026.

Meta sells ads through self-service tools, a global sales force, advertising agencies and resellers. It has offices in more than 90 cities, most with a sales presence. Reality Labs uses retailers, resellers, distribution partners, Meta.com and Meta stores.

Meta calculates revenue by user geography based on where ads are delivered, virtual and digital goods are purchased, or hardware is shipped. United States & Canada and Europe generate relatively higher revenue because their online and mobile advertising markets are larger and more mature. Ad-impression growth is concentrated in lower-monetizing regions such as Asia-Pacific.

Suppliers and costs

Meta designs and builds its own data centers and key parts of its technical infrastructure, while third parties provide a substantial portion of that infrastructure. Its ability to operate and develop products depends on components, power and network capacity. The company expects its computing needs to expand as it develops frontier AI models.

Its main cost base includes employee compensation, data centers, technical infrastructure, technology development, content and hardware efforts, legal costs, and third-party AI token costs. Meta had 78,865 employees at December 31, 2025. In 2025, 82% of total costs and expenses were recognized in Family of Apps and 18% in Reality Labs. Family of Apps investments were $96.29 billion and Reality Labs investments were $21.40 billion.

Capital expenditures, including principal payments on finance leases, were $72.22 billion in 2025. In Q3 2026, total expenses were $51.6 billion, including a $9.9 billion charge related to an agreement with multistate attorneys general. Meta expects 2026 capital expenditures, including principal payments on finance leases, to be in the range of $135 billion to $145 billion.

Competitive position

Meta competes for people’s attention and engagement, advertisers’ budgets, businesses using advertising and paid services, and developers building products that integrate with its services. It faces competition from companies that offer online connection, sharing, discovery and communication services; sell advertising to businesses; provide advertising-management tools; develop frontier AI models; and sell consumer hardware and augmented- and virtual-reality products. No individual competitor is named in the available company information.

Meta identifies competition from other products and services as a factor that has reduced engagement for some users. It also identifies particular competition for younger users. Reels is growing in usage but monetizes at a lower rate than Feed and Stories, and the company expects that relationship to continue for the foreseeable future.

Meta’s potential defenses include its multi-product Family of Apps, advertising systems, self-service tools, sales organization, technical infrastructure, AI research and broad business relationships. It can use AI to improve recommendations, ad delivery, targeting and measurement, and it has developed both open and closed models. The company also has consumer hardware and software efforts through Reality Labs.

Our reading: Meta’s user scale and advertiser tools are meaningful moat sources because its ads reach people across several services and are supported by self-service systems, sales support and AI-based delivery. Our reading: The moat is constrained by dependence on continued engagement, especially among younger users, and by the need to keep recommendation and advertising systems effective as competing products and technologies evolve.

Growth opportunities

Meta’s core growth avenues are increasing engagement, expanding ad impressions, improving ad performance and pricing, developing paid messaging and subscriptions, and adding AI-based products and business services. In 2025, total revenue increased 22% to $200.97 billion, as ad impressions across Family of Apps increased 12% and average price per ad increased 9%.

The company is investing in AI-powered recommendations and advertising systems. In Q3 2026, Meta said its relevance launches increased Instagram Reels time spent by more than 4%. It also said a new retrieval architecture increased Reels watch time by 1% where deployed. The company said its first-party Muse content-understanding models reduced per-unit content-processing costs by more than 80% in offline evaluations across Instagram, Threads, Facebook and ads.

Meta is building consumer, business and enterprise AI products. Muse is a personal agent, initially available in the United States and Canada, that can help with shopping, productivity and other tasks. More than 10 million people in the United States and Canada had set up Muse in about a month and a half. Meta expects Muse revenue to come from business-paid commerce transaction fees, subscriptions for advanced models or extra token use, and subscriptions for business features and workplace use. The company expects to improve Muse compute-cost efficiency by more than 10x over the next year.

Meta also plans to extend Muse to Meta Glasses. It expects Reality Labs operating losses to decline compared with 2025 to a range of $18 billion to $19 billion in 2026.

Structural risks

• Meta’s revenue depends substantially on advertising, so lower marketer spending, weaker engagement, reduced ability to target or measure ads, and changes in advertising formats can adversely affect revenue.

• User growth and engagement can decline if competing products gain attention, new features fail to attract users, products are harder to access on mobile devices, content quality falls, or users have privacy, safety, security or well-being concerns.

• Privacy laws, data-use rules, court decisions, mobile operating-system changes and browser changes can limit data signals used in advertising. Meta expects these developments to continue affecting advertising revenue for the foreseeable future.

• The company depends on technical infrastructure, third-party infrastructure, components, power and network capacity. AI-model development has materially increased computing needs, while capacity availability and future usage needs are difficult to predict.

• Reality Labs is a long-term research and development effort whose products may only be fully realized in the next decade. Meta expects the segment to continue operating at a loss for the foreseeable future, supported by profits generated elsewhere.

• Meta is subject to government investigations, enforcement actions, litigation and evolving regulation involving privacy, competition, content, younger users, AI, consumer protection and other matters. It continues to face scrutiny and trials related to youth issues in several markets and the United States.

Leadership

Meta has a dual-class common-stock structure, and its founder, chairman and chief executive officer controls a majority of the voting power of its outstanding capital stock. This limits the ability of Class A common-stock holders to influence corporate matters.

Bottom line

Our reading

Our reading: Meta is a large digital advertising business whose Family of Apps funds investment in AI infrastructure, new AI services and Reality Labs. Its operating model depends on sustaining engagement across its apps and converting that attention into effective advertising for marketers. Our reading: The company is broadening revenue sources through subscriptions, paid messaging, commerce and business AI, while its capital requirements, long-dated Reality Labs losses, regulatory exposure and reliance on ad targeting remain material constraints.