Full Breakdown
Meta’s Q2 Earnings Spotlight AI Push Amid Rising Legal Costs
7/31/2026, 7:51:46 AM
Financial Results and Outlook
Meta Platforms posted second-quarter earnings of $15.85 billion, a 14 % decline from the $18.34 billion earned in the comparable period a year earlier. Revenue rose 28 % to $60.8 billion, surpassing analyst expectations of $60.22 billion. Earnings per share fell to $6.18 from $7.14 a year prior, missing the consensus forecast of $7.19.
Operating expenses surged 55 % year-over-year to $42.03 billion, driven by $2.40 billion in legal charges and $1.18 billion in severance related to layoffs announced in May. Free cash flow collapsed 91 % to $784 million, down from $8.55 billion a year earlier.
For the current quarter, Meta forecasts revenue of $61 billion to $64 billion, a midpoint below the $63.14 billion analysts expect. The company also raised the lower bound of its 2026 expense outlook to $165 billion, up from prior guidance. Shares fell $24.76, or 4.2 %, to $560.85 in after-hours trading.
User Growth and Workforce Changes
Daily active users across Facebook, Messenger, Instagram, WhatsApp and Threads grew 3 % to 3.6 billion. Instagram reached 2 billion daily users, while Threads reported 500 million monthly active users.
The Menlo Park, California-based firm employed 75,472 people as of June 30, a 1 % year-over-year decrease that still includes roughly 8,000 workers laid off earlier in the year.
Official Statements & Responses
CEO Mark Zuckerberg framed the results as evidence that artificial-intelligence initiatives are beginning to pay off, describing AI as “accelerating our core business today” and opening “entirely new enterprise opportunities.” He expressed optimism about the company’s future trajectory despite the near-term financial headwinds.
Verbatim Quotes
- “AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” — CEO Mark Zuckerberg, said CEO
- “The results are already showing, and I’m optimistic about the potential ahead.” — Meta
- “Earnings come just as Meta pushes out an ad campaign and media blitz that aim to clarify Meta’s stance and goals regarding AI. It’s not surprising that Zuckerberg wants to come out with a more cohesive message around the company’s AI ambitions, especially as Meta tries to carve out its own lane,” — Emarketer
These statements underscore Meta’s strategic emphasis on AI as it navigates heightened legal expenses, a shrinking workforce, and a mixed financial outlook.
