Meta Platforms, Inc.

Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the META third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, again, press star one. We ask that you limit yourself to one question. And this call will be recorded. Thank you very much. Kenneth Dorrell, Meta's Director of Investor Relations. You may begin.

Thank you. Good afternoon and welcome to Meta's third quarter 2025 earnings conference call. Joining me today are Mark Zuckerberg, CEO, and Susan Lee, CFO. Our remarks today will include forward-looking statements which are based on assumptions as of today. Actual results may differ materially as a result of various factors, including those set forth in today's earnings press release and in our quarterly report on Form 10-Q filed with the SEC. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our website at investor.appmeta.com. And now I'd like to turn the call over to Mark.

All right. Thanks, Ken. Thanks, everyone, for joining today. We had another strong quarter with 3.5 billion people using at least one of our apps every day. Instagram hit a major milestone with 3 billion monthly actives. And we're seeing good momentum across our other apps as well, including Threads, which recently passed 150 million daily actives and remains on track to become the leader in its category. I am very focused on establishing Meta as the leading frontier AI lab, building personal superintelligence for everyone and delivering the app experiences and computing devices that will improve the lives of billions of people around the world. Our approach of advancing open source AI means that when Meta innovates, everyone benefits. Meta superintelligence labs is off to a strong start. I think that we've already built the lab with the highest talent density in the industry. We're heads down developing our next generation of models and products. And I'm looking forward to sharing more on that front over the coming months. We're also building what we expect to be an industry leading amount of compute. Now, there's a range of timelines for when people think that we're going to get superintelligence. Some people think that we'll get there in a few years. Others think it will be five, seven years or longer. I think that it's the right strategy to aggressively frontload building capacity so that way we're prepared for the most optimistic cases. That way, if superintelligence arrives sooner, we will be ideally positioned for a generational paradigm shift and many large opportunities. If it takes longer, then we'll use the extra compute to accelerate our core business, which continues to be able to profitably use much more compute than we've been able to throw at it. And we're seeing very high demand for additional compute, both internally and externally. And in the worst case, we would just slow building new infrastructure for some period while we grow into what we build. The upside is extremely high for both our existing apps and new products and businesses that are becoming possible to build. Across Facebook, Instagram, and threads, our AI recommendation systems are delivering higher quality and more relevant content, which led to 5% more time spent on Facebook in Q3 and 10% on threads. Video is a particular bright spot. with video time spent on Instagram up more than 30% since last year. And as video continues to grow across our apps, Reels now has an annual run rate of over $50 billion. Improvements in our recommendation systems will also become even more leveraged as the volume of AI-created content grows. Social media has gone through two eras so far. First was when all content was from friends, family, and accounts that you followed directly. The second was when we added all of the creator content. Now, as AI makes it easier to create and remix content, we're going to add yet another huge corpus of content on top of those. Recommendation systems that understand all this content more deeply and can show you the right content to help you achieve your goals are going to be increasingly valuable. Our ads business continues to perform very well, largely due to improvements in our AI ranking systems as well. This quarter, we saw meaningful advances from unifying different models into simpler, more general models, which drive both better performance and efficiency. And now, the annual run rate going through our completely end-to-end AI-powered ad tools has passed $60 billion. And one way that I think about our company overall is that there are three giant transformers that run Facebook, Instagram, and ads recommendations. We have a very strong pipeline of lots of ways to improve these models by incorporating new AI advances and capabilities. And at the same time, we are also working on combining these three major AI systems into a single unified AI system that will effectively run our family of apps and business using increasing intelligence to improve the trillions of recommendations that we'll make for people every day. I'm also very excited about the new products that we're going to be able to build. More than a billion monthly actives already use Meta AI, and we see usage increase as we improve our underlying models. I'm very excited to get a frontier model into Meta AI, and I think that the opportunity there is very large. The same goes for our business AI. Every day, people have more than 1 billion active threads with business accounts across our messaging platforms, ranging from product questions to customer support. Our business AIs will enable tens of millions of businesses to scale these conversations and improve their sales at low cost. And the better our models get, the better this is going to work for all businesses. This quarter, we also launched Vibes, which is the next generation of our AI creation tools and content experiences. Retention is looking good so far, and its usage keeps growing quickly week over week. I'm looking forward to ramping up the growth of Vibes over the coming months. More broadly, I think that Vibes is an example of a new content type enabled by AI, and I think that there are more opportunities to build many more novel types of content ahead as well. As our new models become ready, I'm looking forward to starting to show everyone some of the new kinds of products that we're working on. At Connect, we announced our 2025 line of AI glasses, and the response so far has been great. The new Ray-Ban metaglasses and Oakley meta vanguards are both selling well, as people love the improved battery life, camera resolution, new AI capabilities, and the great design. There's our new meta Ray-Ban display glasses, our first glasses with a high resolution display and the meta neural band to interact with them. They sold out in almost every store within 48 hours with demo slots fully booked through the end of next month. So we're gonna have to invest in increasing manufacturing and selling more of those. This is an area where we are clearly leading and have a huge opportunity ahead. Taking a step back, If we deliver even a fraction of the opportunity ahead for our existing apps and the new experiences that are possible, then I think that the next few years will be the most exciting period in our history. We've got a lot to do, but we're making real progress, delivering strong business results, building the talent density and infrastructure needed for the next era, and leading the way on AI devices that will define the next computing platform. I'm proud of how our teams are rising to the challenge and I'm grateful for their dedication, hard work and creativity. As always, thank you all for being a part of this journey with us. And now here's Susan.