January 29, 2026

Meta Is Training Its Apps to Sell, Serve, and Convert

By Sandra Radlovacki

Meta’s latest earnings call pointed to a business regaining momentum in advertising while steadily expanding monetisation across messaging and newer platforms. Strong ad performance, rising engagement across its apps, and deeper use of AI across recommendations and marketing tools helped drive year-over-year growth, even as the company prepares for a sharp increase in infrastructure and talent spending in 2026.

Advertising remains Meta’s main growth engine, but the company cited recent gains as a product story rather than a pricing one. Improvements to recommendation systems lifted engagement across core surfaces, which in turn created more valuable ad inventory. On Facebook, changes to feed and video ranking drove a 7% increase in views of organic posts in Q4. The company also pushed freshness harder, surfacing more same-day Reels than in the previous quarter.

Instagram followed a similar path, with Meta increasing the share of original content in recommendations. Threads also benefited from recommendation upgrades, with Meta reporting a 20% increase in time spent. Ads are now being expanded to remaining markets, including the UK, the EU, and Brazil, marking a shift from experimentation to broader monetisation.

WhatsApp as a Business Channel Makes Waves

Messaging featured prominently as Meta outlined how WhatsApp is becoming both an ad surface and a business channel. Paid messaging on WhatsApp crossed a $2 billion annual run rate in Q4, underlining Meta’s belief that messaging can generate revenue without relying solely on ads. At the same time, ads in WhatsApp Status are being rolled out globally throughout 2026, with Meta saying ad load will remain low initially while formats and performance are optimised.

AI sat behind nearly every product update discussed on the call. Meta said it is increasingly integrating large language models into both recommendation systems and ad delivery. In Q4, a new runtime model rolled out across Instagram feed, Stories, and Reels delivered a 3% increase in conversion rates. Model consolidation efforts also improved ad quality, supporting Meta’s strategy of running fewer, more capable models across its platforms.

The company said daily active users generating media with Meta AI tripled year over year in Q4. AI video dubbing now supports nine languages, with hundreds of millions of users watching AI-translated videos daily, a feature Meta said is already increasing time spent on Instagram.

Business AI is starting to show early signs of scale, with more than one million weekly conversations between people and business AIs on Meta’s messaging platforms in markets such as Mexico and the Philippines. In 2026, the company plans to expand these tools to more regions and move beyond basic Q&A, allowing business AIs to help users complete tasks directly within WhatsApp.

Metaverse Ambitions, Awaiting Payoff

However, not all parts of the portfolio are pulling their weight. It was the “worst quarter ever” for Reality Labs, Meta’s VR and augmented reality business unit, with losses hitting $6 billion, pushing the total to $80 billion since 2020. While sales of Meta’s AI-enabled glasses more than tripled last year, the company said losses in the segment are expected to remain similar in 2026 as investment continues.

Meta also acknowledged ongoing regulatory pressure, particularly in the EU, where changes to less personalised ads will begin rolling out this quarter. Legal scrutiny around youth safety and upcoming US trials were flagged as potential risks.

Overall, Meta is doubling down on AI to drive engagement, sharpen ad performance, and turn messaging into a more commercial channel, while accepting that some bets, particularly in immersive hardware, will take longer to pay off.