The numbers
$60.8 billion: Meta’s Q2 revenue, up 28% year over year (YoY).
$59.36 billion: Quarterly ad revenue, above analyst estimates of $59.07 billion. Meanwhile, the average price per ad across Meta platforms spiked 12% from last year, while the number of total ad impressions jumped 14%.
3.6 billion: Total daily active users across Meta platforms.
31%: Meta’s operating margin, compared to 43% during the same quarter last year, as rising costs from AI infrastructure and legal charges undercut its profitability.
$2.4 billion: Charges from activities “related to legal proceedings.” CFO Susan Li hinted there may be more costs during the investor call Wednesday, saying: “We continue to see scrutiny on youth-related issues in several markets, and have a number of youth-related trials scheduled for this year in the U.S. which may ultimately result in a material loss.”
The watercooler talk
Meta claimed its multibillion-dollar AI infrastructure investments are already creating measurable gains in its advertising business, and it is adding new agentic and cloud businesses to further monetize.
The company has aggressively hired top engineering and research talent to build its Superintelligence Labs. Meta is trying to undercut rivals by offering high-quality models for free. It is betting that this will drive developer adoption, spreading its models across the AI ecosystem.
The company’s projected capex for the year is $130 billion to $145 billion, which will be used to rent capacity from cloud providers, invest in AI chips, and expand its data center footprint, among other initiatives.
Meta is also developing personal AI agents to integrate into various products, as well as business agents for Facebook, WhatsApp, and Messenger. Meta boss Mark Zuckerberg said these agents will help Meta offer a “business-in-a-box service,” adding that they have already been adopted by more than a million businesses to communicate with customers and make sales.
In terms of its ad business, Meta’s proprietary AI tools promise to do everything from generating creative on demand to improving ad targeting and automating campaign execution and management.
Nine million small businesses are now using at least one of Meta’s AI creative tools, while the company’s AI-powered campaign management system Advantage+ hit a $75 billion annual revenue run rate in Q2, Zuckerberg said.
Meta also said the AI it uses to pair ads to users has resulted in more than an 8% lift in ad clicks and 15.7% more Facebook conversions.
“We’ve expanded the context that we can take into account around a person’s organic and ads activity to determine an ad’s relevance, driving significant increases in relevance and conversions on both Facebook and Instagram,” Zuckerberg said.
But Wall Street is no longer blindly rewarding AI investments. Company shares slipped Wednesday in after-hours trading in response to Meta’s lower-than-expected earnings and lackluster Q3 revenue guidance.
The key quote
Zuckerberg doubled down on Meta’s push into enterprise AI, saying “there’s an opportunity to extend” the agentic approach the company is taking with consumer-facing businesses—integrating “agents across messaging apps and other surfaces to continue to interact with customers.” In theory, this push will eventually translate to outcomes-based pricing—“Just like the ads system,” Zuckerberg said. “Effectively we will get paid when we deliver results for those businesses.”