Meta Platforms CEO Mark Zuckerberg (pictured) outlined his high-stakes vision for AI across consumer and enterprise markets during a Q2 investor call, casting the technological transition as a massive commercial opportunity despite heavy infrastructure outlays and operational charges weighing on profitability.
Zuckerberg detailed three primary expansion pillars driving Meta’s long-term strategy. He noted AI investments are actively boosting performance across the main portfolio by improving user experiences, optimising return on investment for advertisers and enabling internal product teams to ship software faster.
Looking ahead, Zuckerberg stated that Meta is “developing new personal agents that will be the foundation for our next wave of products and revenue lines in the months and years ahead”.
Expanding beyond consumer applications, he highlighted a growing commercial footprint, pointing to “a large enterprise opportunity to sell to businesses, including APIs, business agents, potentially selling compute directly, and other services that we’re building for large customers”.
Q2 financial performance
Meta delivered strong Q2 top-line performance, driven by continuous gains across its AI-enhanced advertising suite, though rapid infrastructure spending and operational charges squeezed overall profitability below Wall Street expectations.
Meta generated $60.8 billion in revenue, representing a 28% increase compared to $47.5 billion in the same period last year. However, net income dropped 14% to $15.8 billion.
Advertising revenue accounted for $59.8 billion of total sales, up 28% year-over-year. This growth was supported by high adoption of AI automated ad features, with ad impressions growing 14% year-over-year across its Family of Apps and the average price per ad climbing 12%.
Family Daily Active People reached an average of 3.6 billion in June, reflecting a 3% increase year-over-year.
Total costs and expenses surged 55% to $42 billion, heavily weighed down by $2.4 billion in legal proceeding charges as well as $1.2 billion in severance expenses following restructuring in May.
Driven by the aggressive capex ramp and operational charges, free cash flow dropped 91% year-over-year to $784 million, compared to $8.5 billion in the prior-year period.
Capital expenditures jumped to $31 billion from $17 billion, including principal payments on finance leases, as Meta continued to scale its computing infrastructure, servers, and data centres to expand generative AI capabilities.
Looking ahead, the social media giant issued a Q3 revenue forecast of $61 billion to $64 billion.
For the full year, Meta maintained its capital expenditure guidance at $130 billion to $145 billion and anticipates total expenses between $165 billion and $169 billion, while reiterating full-year operating income is expected to exceed prior-year levels.
Highlighting engagement growth across its app suite, Zuckerberg noted Threads crossed 500 million monthly active users, “making it the fastest-growing conversation app ever,” while Facebook reached more than 2 billion daily active users a while ago.
“WhatsApp just hit an all-time messaging record, peaking at 30 million messages sent per second during the World Cup final,” he said.
Meta’s Reality Labs division, which houses the company’s VR and AR hardware efforts including Quest headsets and smart glasses, continued to weigh on overall profitability.
The unit posted an operating loss of $4.6 billion, widening slightly from a year earlier, on revenue of just $431 million, up from $370 million in the same period last year.
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