I'm Buying $10,000 More of META - Here's Why

Hello everyone and welcome back to another video. So Meta stock is up 9% in

another video. So Meta stock is up 9% in after hours trading after the company just announced its fourth quarter 2025 earnings results. Initially the stock

earnings results. Initially the stock was actually down roughly 3% and I took advantage of that dip and I bought a few more shares in after hours trading and I let my Patreon members know that I thought the stock should not be down

after this earnings report. So, in

today's video, I want to go through Meta's Q4 earnings results, explain why the stock is up 9%, and also why I decided to buy some more shares in after hours trading. However, I do not have

hours trading. However, I do not have time to go through the earnings call because the call actually hasn't happened yet at the time of recording this video, and I have dinner plans tonight. So, I'm going to have to go

tonight. So, I'm going to have to go through the call another time and let you know if there are any highlights worth sharing from Mark Zuckerberg in the call. But with that being said,

the call. But with that being said, let's now hop into my screenshots from this earnings report. So, right away we can see that revenue came in at $59.9 billion for the fourth quarter, which

was an increase of 24% year-over-year.

However, costs and expenses came in at 35.1 billion, which were up 40%, which means that income from operations only increased by 6% year-over-year. However,

its net income did still manage to grow by 9% and its earnings per share grew by 11% year-over-year for the fourth quarter. So Meta is seeing continued

quarter. So Meta is seeing continued strong revenue growth at over 20% year-over-year. Now for the full year of

year-over-year. Now for the full year of 2025, they produced $20 billion in revenue. And Meta has officially crossed

revenue. And Meta has officially crossed the $200 billion revenue mark. This was

revenue growth of 22% for the fullear numbers, which also suggests that the revenue growth rates are accelerating heading in to the end of the year, which I think is a great thing to see.

However, on the fullear results, Meta's GAP earnings per share did decline by 2%, which was mostly impacted by that large one-time non-cash tax expense that they took last quarter. Without that,

the earnings per share would have grown by double digits as well. Moving on to the next screenshot, we can see that the family daily active people was 3.58 billion on average for December 2025,

which was an increase of 7% year-over-year. And I think that this is

year-over-year. And I think that this is just insane. Meta has roughly 3.6 6

just insane. Meta has roughly 3.6 6 billion daily active users on their apps and they're still growing by 7%. But

moving on, ad impressions delivered across the family of apps increased by 18% in the fourth quarter and 12% for the full year. So the number of ad impressions happening across Meta's

family of apps is accelerating into the end of the year as well. However, the

average price per ad only increased by 6% in the fourth quarter and 9% for the full year. So Meta's average price per

full year. So Meta's average price per ad growth rate was decelerating into the end of the year. But moving on, capital expenditures for the quarter were 22.1

billion and for the full year they were 72.2 billion. So Meta's capital

72.2 billion. So Meta's capital expenditures are definitely ramping up.

Then they show us that cash flow from operating activities was 36.2 billion for the fourth quarter and 115.8 billion for the full year. This means that

operating cash flows were up 28.6% 6% for the fourth quarter and 26.8% for the full year. Now, operating cash flow is the main profitability metric that I am currently focusing on because

Meta is spending so much money on capital expenditures. So, their free

capital expenditures. So, their free cash flows are being subdued massively right now while they are building out all of their data infrastructure. This

is the same story for companies like Amazon, Google, and Microsoft. All of

these hyperscalers are investing so much money into capex right now that I don't think that free cash flow is an accurate reflection of the profit potential of these businesses. So for the time being,

these businesses. So for the time being, I am focusing on operating cash flow for all of them. And Meta's operating cash flow just grew by 28% year-over-year. So

the amount of cash that Meta's operations are producing is growing and at an accelerated pace. And this is the same story with their top line. So I

think that this is a clear indicator that Meta's investments into capex and into growth is actually paying off and it is materially growing the business.

Now moving on to the next screenshot.

This one is the CFO's outlook for the next quarter. And here they say we

next quarter. And here they say we expect the first quarter of 2026 total revenue to be in the range of 53.5 to 56.5 billion. Now the middle of this

56.5 billion. Now the middle of this range is $55 billion in revenue for the first quarter which would be year-over-year growth of 30%. So, Meta

is expecting the revenue growth rates to continue accelerating into 2026 and I think that this is the main reason why the stock is up. Analysts were also

estimating 51.3 billion in revenue for the first quarter. So, Meta's Guide is beating analyst expectations by quite a wide margin. And again, I think that

wide margin. And again, I think that this is the main reason why the stock is up. However, Meta is expecting their

up. However, Meta is expecting their full year 2026 total expenses to be in the range of $162 to $169 billion. They

then said that the majority of this expense growth will be driven by infrastructure costs. They're also

infrastructure costs. They're also anticipating that full year 2026 capital expenditures, including principal payments on finance leases, will be in

the range of 115 to $135 billion in 2026. So Meta is expecting their

2026. So Meta is expecting their expenses and their capital expenditures to grow significantly next year.

However, they say that despite the meaningful step up in infrastructure investments in 2026, they expect to deliver operating income that was above 2025. So they are expecting overall

2025. So they are expecting overall operating income to grow despite their investments increasing significantly next year. And I think that the initial

next year. And I think that the initial selloff to Meta Stock after they reported their earnings was due to this capex guidance right here. Because think

about it, they just did $72 billion of capex for 2025, which means that on the high end, they're projecting to nearly double their capital expenditures in 2026. But again, I think the

2026. But again, I think the acceleration to Meta's topline and its operating cash flow numbers are suggesting that these investments in infrastructure are paying off and

materially impacting the business in a positive way. So if Meta can continue to

positive way. So if Meta can continue to see its business accelerate with all of this increased capital expenditures, then I think it will be a good thing for the business and for its shareholders over the long term. However, in the

short term, earnings and margins and free cash flows are going to be impacted. So this is very much so a

impacted. So this is very much so a long-term investment and that is partly why I am investing in the business.

Moving on to the next screenshot, this one shows us their segment results and we can see that the family of apps produced operating income of $30.8 8 billion, which puts the operating margin

of this business at well over 50%.

However, the reality lab's operating loss came in at $6 billion for the quarter. So, the reality of Lab segment

quarter. So, the reality of Lab segment is still a massive hindrance on the company's margins and profitability. But

despite that, total income from operations still came in at 24.7 billion, and the operating margin came in at 41%. So Meta's business is still printing a ridiculous amount of cash and

its profit margins are very high, even including the reality lab segment. This

next screenshot shows us the family average revenue per person, or basically the average revenue per person on their family of apps. And we can see that it was at an all-time high of $16.56

in the most recent quarter, which is great to see. This next screenshot shows us the ad impressions delivered year-over-year. And as we saw earlier,

year-over-year. And as we saw earlier, the total number of ad impressions increased by 18% year-over-year. But

what is interesting is the growth rate to the number of ad impressions delivered is accelerating. And we can clearly see that. So Meta is showing people a record amount of ads. And the

amount of ads that are on Meta's platform is accelerating. This is also happening across all geographies, the US and Canada, Europe, the rest of the world, and the Asia-Pacific region. So,

across every geography, Meta's ad impressions are accelerating. However,

Meta's average price per ad has been decelerating consistently over the past year. Last year, in the fourth quarter,

year. Last year, in the fourth quarter, the average price per ad grew by 14% and this year, it only grew by 6%. And

across every single geography, the price per ad has been declining. And I think that Meta is doing this so that they can get more and more ads on their platform.

So, they're doing a little bit of a trade-off right now to price their ads a little bit cheaper to get more people on their advertising platform. And if we go and take a look at the previous screenshot, I would say that this is

definitely working because the number of ads on their platform has been accelerating. So, let's go and take a

accelerating. So, let's go and take a look at some of Meta's KPIs now. And the

first one is advertising revenue. So, we

can see that Meta produced $196 billion in advertising revenue in the trailing 12 months. But if we switch this to a

12 months. But if we switch this to a quarterly view, then just look at how quickly Meta's advertising revenue is growing and accelerating. Now, this was a monster quarter for their advertising

business. And it looks like they're

business. And it looks like they're going to have another very strong quarter in the first quarter of 2026.

And if Meta can continue that momentum for the full year of 2026, then they're setting up to have a monster year for revenue growth next year. However, if we take a look at the reality lab segment,

we can see that this revenue has now not grown since about 2021. And so far, this entire business segment has just been a cash burner and has produced nothing for shareholders. So, I'm wondering if

shareholders. So, I'm wondering if they're going to stop investing so much money in the reality lab segment and if shareholders are going to start pushing for that because it really is just burning the company's cash and lowering

its profit margins. Now, as we learned earlier, Meta just produced $115.8 8 billion in operating cash flow for 2025.

Now, before the market closed today, they had a market cap of $1.69 trillion.

So, if we divide that by 115.8 billion, then the stock was trading for a price to operating cash flow of roughly 14.6.

And as I said earlier, the number one metric that I am focusing on for Meta right now is their operating cash flow.

So, while I was going through their earnings release right after they reported it, I went straight to take a look at what the operating cash flow numbers were doing, and I saw that 28% year-over-year growth rate. And then I

took a look at the stock and it was down roughly 3% in after hours. And as soon as I saw that, I thought the stock did not deserve to be down. So, I bought a few more shares in after hours trading.

And it was also centered in the fact that in after hours, Meta stock was trading for roughly 14 times operating cash flows. So, let's go and take a look

cash flows. So, let's go and take a look at their historical averages now all the way back to 2019. And we can see that the median price to operating cash flow for this business has been roughly 16.

And even right now in after hours, including the bump that the share price just had, it's still trading for about 16 times operating cash flows, which is the company's historical median all the way back to 2019. And this is at the

same time as the business's fundamentals, in my opinion, are accelerating and seeing very strong growth. Like 30% year-over-year revenue

growth. Like 30% year-over-year revenue growth for the first quarter for a company worth trillions of dollars, I think is wild. And Meta is setting up to have one of the best revenue growth

rates out of all of the Magnificent 7 for the fourth quarter. Now, one last thing that I will mention is that this 16 price to operating cash flow median includes when Meta was significantly

undervalued in 2022 and it was trading for only five times operating cash flows. So, I think that this median

flows. So, I think that this median number right here could actually be skewed to the downside because again, it is factoring in when Meta was obviously undervalued in 2022. And in hindsight,

in 2022, Meta looks like it was it was just ridiculously cheap and an obvious buy. Now, the last thing that I want to

buy. Now, the last thing that I want to do in this video is a quick discounted cash flow calculation of Meta Stock today. And we're going to be using its

today. And we're going to be using its operating cash flow and projecting it over the next 5 years. And I'm saying that operating cash flow will continue to grow by 12% annually over this time frame. I am also saying that Meta will

frame. I am also saying that Meta will continue to trade for 15 times operating cash flows and buy back roughly 2% of its shares on an annual basis going forward. And with these inputs, we get a

forward. And with these inputs, we get a fair value for MetaT $837 per share and a future share price of $1,337

by the year of 2031. And lastly, this would be a compounded annual growth rate to the share price of 15%, which ultimately suggests that Meta stock is undervalued after this earnings report.

Now, another thing that I want to say about this DCF is I think that Meta will actually grow its operating cash flows by more than 12% annually over the next 5 years. I mean, this is a business that

5 years. I mean, this is a business that is seeing its topline accelerate, and it's projecting 30% year-over-year growth in the next quarter. And it also just saw its operating cash flows grow

by 26% year-over-year. So, if we bump this number up to 15% and also expand the price to operating cash flow to maybe 17 to reflect the accelerated

growth to the business, then we get a compounded annual growth rate of 21% and a fair value of roughly $1,100 per share. And I still think that these

share. And I still think that these numbers right here are pretty dang realistic for Meta over the next 5 years. So, to put it simply, I think

years. So, to put it simply, I think this earnings report for Meta was phenomenal. They saw 24% year-over-year

phenomenal. They saw 24% year-over-year revenue growth. They're projecting 30%

revenue growth. They're projecting 30% revenue growth next quarter, and they just grew operating cash flow by 28% in the fourth quarter. All of these things are the main metrics that I care about,

and Meta knocked it out of the park. I

also think the stock is still not looking expensive today even with that 9% boost in after hours trading and that is the main reason why I nibbled on some more shares right after they reported earnings and I saw that the stock was

down. So as a shareholder of Meta, I am

down. So as a shareholder of Meta, I am very happy with this earnings report and I cannot wait to continue following the business and what it produces in 2026.

And with all that being said, that is my earning summary for Meta's Q4 2025 earnings results. If you enjoyed this

earnings results. If you enjoyed this video, then please remember to leave a like on it. And if you want to stick around and see more content like this, then please consider subscribing to my channel if you haven't already. And

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But with all that being said, thank you so much for tuning in. As always, I truly do appreciate it and I really hope to see you again in my next