METANASDAQ

Meta Platforms

What it does

Meta reports 2 businesses. In FY2025, Family of apps brought in 99% and Reality Labs brought in 1% of revenue.

By region, US and Canada made up 39%, then Asia Pacific at 27%.

From Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2025.

Our coverage

Read it through a lens

How we rate moatsThe numbers, the five lenses and how they add upLearn more ›Insider buysWhat the disclosures show, and how lateLearn more ›Add to The BoardKeep it on your watchlist, saved in your browserLearn more ›

How it makes money

Where Meta's FY2025 revenue came from, what it cost to earn, and what was left for shareholders.

RevenueUS$201.0B

Operating incomeUS$83.3B

Net profitUS$60.5B

Net profit as % of revenue30.1%

▸ Meta Platforms, FY2025: from revenue to profitMETA

Revenue by

Income
Costs and tax
Profit
% = share of revenue

Source: Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2025 (29 Jan 2026), statement of income, Notes 2 and 15. FY2025 is the year to 31 Dec 2025. Figures as reported, in US$ millions in the tooltips and table.

Technical: gross margin was 82.0%, operating margin 41.4% and net margin 30.1%. Operating costs and cost of revenue together took 58.6% of revenue.

Plain: of every dollar of sales, about 18 cents paid for making or delivering what was sold, about 41 cents went on running and growing the business, and about 30 cents ended up as profit for shareholders.

Revenue by business

Family of appsUS$198.8B · 99%Operating income US$102.5B
Reality LabsUS$2.2B · 1%Operating income −US$19.2B

Revenue by region

US and CanadaUS$78.9B · 39%
Asia PacificUS$53.8B · 27%
EuropeUS$46.6B · 23%
Rest of worldUS$21.7B · 11%

See the numbers

FY2025	US$M	% of revenue
Revenue	200,966	100.0%
Cost of revenue	−36,175	18.0%
Gross profit	164,791	82.0%
Research and development	−57,372	28.5%
Marketing and sales	−11,991	6.0%
General and administrative	−12,152	6.0%
Operating income	83,276	41.4%
Other income (expense), net	2,656	1.3%
Profit before tax	85,932	42.8%
Income tax	−25,474	12.7%
Net profit to shareholders	60,458	30.1%

Gross profit is revenue less cost of revenue. Meta doesn't report the subtotal itself.
Tax rose US$17.17B on FY2024, mostly because of a 2025 US tax law (OBBBA), Meta says. The effective tax rate was 29.6%.
Family of Apps revenue is US$196,175M of advertising and US$2,584M of other revenue.
Meta assigns revenue by the customer's address. United States revenue alone was US$74.78B.

Moat rating

Wide moat

8.9 / 10

ROIC averaged 46.2% over FY2021 to FY2025, 35.6 percentage points above a 10.66% cost of capital, and beat it every year, including FY2022's 30.3%.

Meta earns several times what its capital costs, even while spending heavily on the metaverse and AI.

The numbers

10.0 / 10

Return on invested capital against cost of capital, internet software

Average ROIC: 46.2%
Average excess return: +35.6 pp
Years above the hurdle: 5 of 5

Spread 10 × 60% + durability 10 × 40% = 10.0

The sources

7.8 / 10

Where Meta's advantage comes from

1. Brand and pricing power7 / 10
In 2025 the average price per ad rose 9% while ad impressions grew 12%.
Meta showed more ads and charged more for each one at the same time.
2. Barriers to entry7 / 10
Family of Apps made US$102.5B of operating income in 2025, which funds US$57.4B of research and development a year.
A newcomer would need to match tens of billions a year in spending just to keep up.
3. Switching costs6 / 10
Friends, photos, groups and business pages live on Facebook, Instagram and WhatsApp. People can and do spend time on other apps as well.
Leaving means leaving your friends and memories behind, though nothing stops you using TikTok too.
4. Network effects10 / 10
Family daily active people averaged 3.58 billion in December 2025, up 7%.
You're on WhatsApp because your family is. Each new user makes the apps more useful to everyone else.
5. Economies of scale9 / 10
Operating margin of 41.4% in 2025, and 51.6% for Family of Apps, even after Reality Labs lost US$19.2B.
Serving one more user costs Meta very little, so most new ad money turns into profit.

Return on invested capital: Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2021; Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2022; Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2023; Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2024; Meta Platforms, Inc. (SEC EDGAR), Form 10-K for the fiscal year ended 31 Dec 2025. Hurdle: Aswath Damodaran, NYU Stern, Cost of capital by sector (US), data as of January 2026. Our choice of industry. Damodaran's advertising group has a lower 7.81%, so this is the tougher test.

How we worked out ROIC: operating income after tax, divided by the capital invested at the start of the year. Tax is at the year's effective rate, or the 21% US federal rate where a pre-tax loss or a tax credit makes the effective rate meaningless. Invested capital is shareholders' equity plus borrowings, less cash and short-term investments, from the opening balance sheet in the same 10-K; lease liabilities are left out. This follows Damodaran's definition. The ratios are our calculation from the filed figures, not numbers the company reports.

Lens scores are rasinbunlover's judgment, reviewed 19 Oct 2026. A wide moat is a reason to dig deeper, not a verdict on the price. For education only. Not financial advice.

How we rate moats ›

Price data: TradingView, may be delayed according to exchange rules. A ticker on this site is not a recommendation. For education only. Not financial advice.