Where the Spending Shows Up

In its results for the fourth quarter of 2025, released in January 2026, Meta reported full-year capital expenditures, including principal payments on finance leases, of roughly 72 billion dollars, and it guided to between 115 and 135 billion dollars for 2026. Those two numbers travelled widely. Fewer readers noticed the qualifying phrase attached to them, and that phrase is where this lesson begins. A capital spending figure is only meaningful once you know where it came from and what it contains.

Capital expenditure, usually shortened to capex, is money a company spends on long-lived assets rather than on day-to-day operations. For the hyperscalers, the large items are land, buildings, electrical and cooling equipment, servers, networking gear and the chips inside the servers. Unlike salaries or electricity bills, capex is not deducted from profit all at once. It is recorded as an asset and depreciated, meaning its cost is spread across the years the asset is expected to be useful.

The most reliable place to find it is the statement of cash flows, one of the three primary financial statements in every annual report on Form 10-K and every quarterly report on Form 10-Q. Under the heading for investing activities, the hyperscalers report a line usually titled purchases of property and equipment, sometimes with slight variations in wording. That line records cash that actually left the company during the period to buy long-lived assets. It is audited in the annual report, and it is the closest thing to a common measure across the five companies.

The earnings release and the earnings call come first in time and usually get the headlines. Companies publish a press release with summary financials on the day they report, and executives then take questions from analysts on a conference call. This is where guidance appears: statements about what the company expects to spend next quarter or next year. Guidance is not a filing, it is a forecast, and companies revise it. Meta's own 2025 guidance moved upward several times during the year before the final figure was reported.

Here is the first complication. Several of the companies report a capital spending figure in their releases that is not the same as the cash flow line. Meta's headline figure adds principal payments on finance leases to its purchases of property and equipment. Microsoft, on its earnings calls, has described capital expenditures including finance leases, and separately reported cash paid for property and equipment. The two figures can differ by billions of dollars in a single quarter. Neither is wrong. They answer different questions, and the next lesson explains what finance leases are and why they create the gap.

The second complication is that capex is a company-wide number. None of the five reports a line that says spending on artificial intelligence data centers. Alphabet's capex includes offices. Amazon's includes its retail fulfillment network, its logistics fleet and its satellite internet project, as well as Amazon Web Services. Meta's includes its Reality Labs hardware work. Executives often characterize the mix on calls, telling analysts that most of the spending went to technical infrastructure, and those characterizations are useful. They are also unaudited descriptions, and they should be cited as such.

The third complication is timing. Cash leaves when invoices are paid, which can lag the moment a building is started or a server is ordered. A company can have signed enormous commitments that have not yet appeared as capex, and it can report heavy capex in a quarter when little new capacity came online, because it is paying for projects that will open a year or two later. Capex is therefore a record of past payments and a rough signal of future capacity, not a measure of capacity itself.

So what should a reader actually do with these numbers? Start with the audited cash flow line, from the annual report, and note the period. Then read the headline figure the company prefers, and write down exactly what it includes, in the company's own words. Then read the guidance, and date it. When you compare companies, compare like with like, and when you cannot, say so. Faraday's read is that most public arguments about who is spending more are really arguments about definitions, and they dissolve once the definitions are written down.

It is also worth reading the text around the numbers. The management discussion section of a 10-K often explains why spending rose, and the risk factors section sometimes describes constraints on power, equipment or construction. These passages are dry, but they are written under legal liability, and they tend to be more careful than anything said on a stage.