For the quarter ended June, the Facebook and Instagram parent posted revenue of $60.8 billion, up 28% from $47.5 billion a year ago, surpassing analysts’ estimate of $60.22 billion.
However, net profit declined 14% year-on-year to $15.85 billion, or $6.18 per share, compared with $18.34 billion, or $7.14 per share, in the corresponding quarter last year. Analysts had expected earnings of $7.19 per share, according to FactSet.
Meta’s quarterly expenses surged 55% to $42.03 billion, largely due to $2.4 billion in legal charges and $1.18 billion in severance costs linked to layoffs announced earlier this year.
Looking ahead, the company projected third-quarter revenue between $61 billion and $64 billion. The midpoint of that range falls short of analysts’ consensus estimate of $63.14 billion, dampening investor sentiment.
Meta also revised its full-year expense guidance, raising the lower end of the range to account for the legal costs. The company now expects 2026 expenses of $165 billion to $169 billion.
The social media giant also narrowed its capital expenditure guidance to $130 billion-$145 billion, compared with its earlier forecast of $125 billion-$145 billion, as it continues to invest aggressively in AI infrastructure.
Heavy spending on AI also weighed on cash generation. Free cash flow plunged to $784 million during the quarter from $8.55 billion a year earlier, reflecting increased investments in data centres and computing capacity.
Despite the higher spending, Chief Executive Officer Mark Zuckerberg remained upbeat on the company’s AI strategy.
“AI is accelerating our core business, driving the next generation of products and creating new enterprise opportunities,” Zuckerberg said, adding that the company is already seeing tangible results from its investments.
Meta continued to expand its user base during the quarter. Daily active users across its family of apps – including Facebook, Instagram, Messenger, WhatsApp and Threads – increased 3% from a year earlier to 3.6 billion.
Zuckerberg also revealed that Instagram has crossed 2 billion daily active users, while Threads now has 500 million monthly active users, highlighting continued engagement across the company’s platforms.
As of June 30, Meta employed 75,472 people, down 1% from a year earlier. The company said the figure still includes employees affected by the workforce reduction announced in May, with updated headcount expected in its next earnings report.
Analysts said the earnings come as Meta intensifies efforts to position itself as a leading AI company through product launches and public messaging. However, they noted that the company’s AI ambitions continue to coexist with increasing regulatory scrutiny and criticism over the impact of social media on younger users.
Meta shares had declined 11% so far this year, underperforming the broader Nasdaq, which has gained around 5% over the same period.
With agency inputs
