Meta Platforms (NASDAQ:META) delivered a blowout Q2, beating revenue expectations by nearly $3 billion and EPS by 21%. User growth remains impressive given their global scale, with Family Daily Active People now reaching 3.48 billion — about 40% of the world’s population. Forward guidance came in well above the expectations of $46.2 billion in Q3.
Meta’s heavy AI investments are translating into tangible business results. On-platform engagement is up — Instagram and Facebook video watch time increased 20%, driven by improved AI-powered content recommendations. Within advertising, AI tools provide generative tools for advertisers and are showing measurable improvements in conversion rates. Meta AI now reaches over 1 billion users monthly. Ads have also been introduced to Threads and WhatsApp. While not expected to contribute meaningfully in the near term, it’s a sign that monetization is underway.
Reality Labs remains a drag, posting a $4.5 billion operating loss in Q2. Sales of Ray-Ban smart glasses are encouraging, but segment revenue remains flat overall. There’s still no clear path to profitability here — for now, the strong performance in advertising and AI buys management time, but a $4 billion quarterly burn is not insignificant. Spending tied to SuperIntelligence hasn’t fully hit the expense line yet; while 2025 expense guidance was maintained, management indicated costs could rise in 2026.
For more details, key highlights, and commentary, check out the high-level earnings summary.
