Meta reports strong second-quarter results with robust revenue growth and sustained AI infrastructure investment momentum.
Meta shares plummeted almost 10% in extended trading on Wednesday after the company issued a weaker-than-expected revenue forecast and took a significant hit to its cash position.
For the current quarter, Meta expects revenue between $61 billion and $64 billion—$62.5 billion at the midpoint—compared with analyst expectations of $63.15 billion, according to LSEG. The company noted that the guidance "assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth, based on current exchange rates."
Daily active people across Meta's family of apps reached 3.6 billion, slightly short of Wall Street's estimate of 3.61 billion, according to StreetAccount.
Meta narrowed its full-year capital expenditure guidance to a range of $130 billion to $145 billion, up from the prior range of $125 billion to $145 billion. The company's aggressive investment in AI infrastructure has pressured cash generation dramatically: free cash flow fell to $784 million in the quarter from $8.55 billion in the same period a year earlier.
Investors are closely monitoring Meta's efforts to monetize its AI initiatives. Earlier this month, the company introduced the Muse Spark 1.1 model, which AI chief Alexandr Wang described as the "strongest model for agentic and coding work yet" at a lower price than comparable offerings from OpenAI and Anthropic. Meta intensified its AI strategy after hiring Wang in June 2025 as part of a $14.3 billion investment in his startup, Scale AI.
"Overall, we expect that a significant portion of our compute is going to go towards training our models, growing our core business, and delivering personal agents and new products," CEO Mark Zuckerberg said on Wednesday's earnings call. "But we also expect to grow a large business serving large customers as well."
Last week, Alphabet reported that free cash flow turned negative for the first time on record due to its substantial AI spending. Unlike Alphabet and fellow hyperscalers Amazon and Microsoft, Meta lacks a major cloud-computing business—though that may change as Meta considers leasing excess capacity to third parties. "We're getting a lot of offers for compute at a significant premium over what we paid for it," Zuckerberg said.
On Tuesday, Meta announced a venture with BlackRock to develop a $14 billion data center project in El Paso, Texas, following the recent announcement of its Hyperion data center project in rural Louisiana, which will exceed $50 billion. In July, Meta also revealed plans to build a $9 billion data center in Alberta, Canada.
Second-quarter total costs and expenses reached $42.03 billion, a 55% increase year-over-year. This figure includes $2.4 billion in legal charges and $1.18 billion in severance related to the company's layoffs beginning in May. CFO Susan Li noted on the call that excluding these charges, operating income would have increased 9% year-over-year.
Net income for the quarter declined to $15.85 billion, or $7.14 per share, from $18.34 billion in the prior-year period.
Meta's Reality Labs unit recorded $4.6 billion in operating losses on $431 million in revenue, outperforming Wall Street's expectations of a $5.07 billion loss on $423.4 million in sales.