Meta's 3Q25 report showed solid user engagement but prompted an 8% drop in stock price after hours. Daily Active Users (DAUs) hit 3.5 billion, an 8% increase from last year, with Instagram surpassing 3 billion Monthly Active Users (MAUs) for the first time. Threads is also gaining traction, reporting 150 million DAUs. Mark Zuckerberg pointed out that AI has significantly boosted engagement, with time spent on Facebook up by 5% and on Threads by 10%. Video consumption on Instagram rose over 30% compared to last year, reflecting the impact of AI on user experience. Revenue growth accelerated to 26%, driven by a 14% increase in ad impressions and a 10% rise in ad prices. The Reels feature generated a run rate of $50 billion in ad revenue, while AI tools contributed over $60 billion. However, total costs and expenses surged by 32% year-over-year, mainly due to a 36% jump in R&D spending, pushing operating margins down to 40%. A notable tax charge of $15.9 billion, linked to a recent legislative adjustment, affected earnings per share, which would have been $7.25 without it. Despite ongoing losses in the Reality Labs division, which lost about $4.4 billion this quarter, the outlook for their AR/VR efforts appears less bleak. With competitors like Apple’s Vision Pro not dominating the market, Meta's Ray-Bans could maintain a competitive edge in augmented reality. The overall sentiment from the earnings call suggests confidence in their AI developments, improving ad efficiency and lowering costs for advertisers.