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 fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be an opportunity to ask questions. 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 Platform's fourth quarter and full year 2025 earnings conference call. Joining me today to discuss our results 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. Hey, everyone. Thanks for joining us. We ended 2025 strong with more than 3.5 billion people now using at least one of our apps every day. That includes more than 2 billion daily actives each on Facebook and WhatsApp and just shy of that on Instagram. Our business also performed very well thanks to record-breaking holiday demand and AI-driven performance gains. We are now seeing a major AI acceleration. I expect 2026 to be a year where this wave accelerates even further on several fronts. We're starting to see agents really work. This will unlock the ability to build completely new products and transform how we work. In 25, we rebuilt the foundations of our AI program. Over the coming months, we're going to start shipping our new models and products. I expect our first models will be good, but more importantly, we'll show the rapid trajectory that we're on. And then I expect us to steadily push the frontier over the course of the year, as we continue to release new models. I'm very excited about the products that we're building our vision is building personal super intelligence. we're starting to see the promise of Ai that understands our personal context, including our history, our history, our interests, our content and our relationships. A lot of what makes agents valuable is the unique context that they can see, and we believe that meta will be able to provide a uniquely personal experience. We're also working on merging LLMs with the recommendation systems that power Facebook, Instagram threads, and our ad system. Our world-class recommendation systems are already driving meaningful growth across our apps and ads business, but we think that the current systems are primitive compared to what will be possible soon. Today, our systems help people stay in touch with friends, understand the world, and find interesting and entertaining content. But soon, we'll be able to understand people's unique personal goals and tailor feeds to show each person content that helps them improve their lives in the ways that they want. This also has implications for commerce. Our ads today help businesses find just the right, very specific people who are interested in their products. New agentic shopping tools will allow people to find just the right very specific set of products from the businesses in our catalog. We're focused on making these experiences work across both our feeds and across business messaging, significantly increasing the capabilities of WhatsApp over time. New kinds of content will soon be possible as well. People want to express themselves and experience the world in the most immersive and interactive way as possible. We started with text and then move to photos when we got phones with cameras and then move to video when mobile networks got fast enough. Soon we'll see an explosion of new media formats that are more immersive and interactive and only possible because of advances in AI. Our feeds will become more interactive overall. Today, our apps feel like algorithms that recommend content. Soon you'll open our apps and you'll have an AI that understands you and also happens to be able to show you great content or even generate great personalized content for you. Glasses are the ultimate incarnation of this vision. They're going to be able to see what you see, hear what you hear, talk to you and help you as you go about your day. and even show you information or generate custom UI right there in your vision. Sales of our glasses more than tripled last year. And we think that they're some of the fastest growing consumer electronics in history. Billions of people wear glasses or contacts for vision correction. And I think that we're at a moment similar to when smartphones arrived. And it was clearly only a matter of time until all those flip phones became smartphones. It's hard to imagine a world in several years where most glasses that people wear aren't AI glasses. For Reality Labs, we are directing most of our investment towards glasses and wearables going forward, while focusing on making Horizon a massive success on mobile and making VR a profitable ecosystem over the coming years. I expect reality labs losses this year to be similar to last year, and this will likely be the peak as we start to gradually reduce our losses going forward, while continuing to execute on our vision. As we plan for the future, we will continue to invest very significantly in infrastructure to train leading models and deliver personal super intelligence to billions of people and businesses around the world. I recently announced meta compute with the belief that being the most efficient at how we engineer invest and partner to build our infrastructure will become a strategic advantage. dina Powell mccormick also joined us as President and Vice Chairman and she will lead our efforts to partner with governments sovereigns and strategic capital partners to expand our long term capacity, including. Ensuring positive economic impact in the communities that we operate in around the world. An important part of metacompute will be making long-term investments in silicon and energy. We will continue working with key partners while advancing our own silicon program. We're architecting our systems that we can be flexible in the systems that we use, and we expect the cost per gigawatt to decrease significantly over time through optimizing both our technology and supply chain. The last thing that I want to mention is that I think that 2026 is going to be the year that AI starts to dramatically change the way that we work. As we navigate this our North star is building the best place for individuals to make a massive impact. So to do this we're investing in Ai native tooling so individuals that medic and get more done we're elevating individual contributors and flattening teams. we're starting to see projects that used to require big teams now be accomplished by a single very talented person. I want to make sure that as many of these very talented people as possible choose Meta as the place that they can make the greatest impact to deliver personalized products to billions of people around the world. And if we do this, then I think that we're going to get a lot more done. And I think it's going to be a lot more fun. All right, that's everything I wanted to cover. This is gonna be a big year for delivering personal super intelligence, accelerating our business, building infrastructure for the future and shaping how our company will work going forward. As always, I am grateful for all of the hard work of our teams and to all of you for being on this journey with us. And now here's Susan.