MetaPlatforms just posted record results while generating massive free cash flow, setting the stage for potential dividend growth as the company balances aggressive AI investments with returning cash to investors.
In Q4, Meta (META) posted earnings of $8.88 per share on revenue of $59.9 billion, handily beating analyst expectations of $8.23 per share and $58.59 billion in sales.
Revenue jumped 24% year-over-year, with advertising accounting for nearly 97% of the total haul at $58.1 billion.
But here’s what really matters:
Meta generated$14.1 billion in free cash flow during the quarter while sitting on $81.6 billion in cash and marketable securities against $58.7 billion in debt.
That’s a fortress balance sheet by any measure, and with the company expecting operating income growth in 2026 despite massive infrastructure spending, there’s room for Meta to reward shareholders through dividend increases.
Getty Images COM &; O 02102026
A focus on dividend growth
Meta’s free cash flow is forecast to narrow from $52.1 billion in 2024 to $10.45 billion in 2026, as the social media heavyweight continues to spend heavily on AI.
However, analysts forecast Meta’s free cash flow to increase to $111.7 billion in 2030.
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This FCF expansion should enable Meta to raise the annual dividend from $2.1 per share in 2025 to $3.81 per share in 2030.
In this period, its payout ratio should improve from 54% to just 8.6%.
Meta’s dividend metrics at a glance
- Dividend Yield: 0.3%
- Payout Ratio 2026 (e): 54%
- Quarterly Dividend: $0.525 per share
- Annual Dividend: $2.1 per share
- Expected 5-Year Dividend Growth Rate: Approximately 12.7% annually
Meta’s AI spending spree
CEO Mark Zuckerberg dropped a bombshell during the earnings call, revealing that Meta plans to spend between $115 billion and $135 billion on capital expenditures in 2026.
That’s significantly higher than the $72.2 billionMeta allocated towards infrastructure in 2025.
CFO Susan Li explained that Meta remains “capacity constrained,” meaning the company needs more computing power to improve its ad business while giving its AI team the resources to build more advanced models.
Li said:
The bet on “personal super intelligence”
Zuckerberg spent much of the call discussing Meta’s vision for “personal super intelligence,” a concept that extends beyond chatbots to AI systems that understand individual users’ histories, interests, and relationships.
The company plans to merge large language models with the recommendation systems that power Facebook, Instagram, and its ad platform. In theory, this should make both the organic experience and advertising more effective.
Related: Meta makes major bet on AI secret weapon
Meta’s big swing last year was the $14.3 billioninvestment in Scale AI, bringing founder Alexandr Wang and his top engineers to Meta.
Wang now leads Meta’s TBD unit, which has been testing a new frontier model code-named “Avocado” that’s intended to succeed the company’s Llama family of models.
The numbers that matter to dividend investors
Meta’s advertising business continues to print money. The number of ad impressions served across its services increased 18% year-over-year in Q4, while the average price per ad jumped 6%.
More importantly, the company is seeing real results from its AI investments. Finance chief Li said Meta’s GEM model for ads ranking, combined with a new sequence learning architecture, drove a 3.5% lift in ad clicks on Facebook and more than 1% gain in conversions on Instagram in Q4.
The company also doubled the number of GPUs used to train its GEM model and expects to scale that up significantly in 2026.
For the first quarter, Meta expects revenue between $53.5 billion and $56.5 billion, well ahead of analyst estimates of $51.41 billion.
Li said the forecast is “really underpinned by the strong demand that we saw through the end of Q4 and continuing into the start of 2026.”
Reality Labs keeps bleeding money
Not everything is rosy.
- Meta’s Reality Labs unit, which houses its virtual reality and augmented reality efforts, logged a $6.02 billionoperating loss on just $955 million in sales for the quarter.
- That brings Reality Labs’ total losses to nearly $80 billion since late 2020.
- Earlier this month, Meta laid off more than 1,000 Reality Labs employees working on VR initiatives as part of a shift toward AI and wearable devices like the Ray-Ban Meta smart glasses.
Zuckerberg said he expects Reality Labs’ losses in 2026 to remain similar to 2025 levels, but added that this will likely be the peak as the company gradually reduces losses going forward.
What it means for dividend investors
Despite the massive AI spending ramp, Meta expects to deliver operating income above 2025 levels in absolute dollars.
That’s a critical point. The company isn’t sacrificing profitability to chase AI. It’s using the strength of its advertising business to fund long-term bets while still growing earnings.
Meta ended Q4 with more than 78,800 employees, up 6% year-over-year. The company continues to prioritize hiring in areas such as monetization, infrastructure, and AI, while also expanding its regulatory and compliance teams.
As long as Meta’s core advertising business continues to dominate mobile and throw off billions in cash each quarter, Zuckerberg will have plenty of runway to pursue his AI ambitions and increase its dividend payout.
And if the company can pull off even a fraction of what it’s promising with personalized AI and improved recommendation systems, the next few years could be transformative.
Related: Bank of America resets Meta stock price target after earnings
