Meta's Q2 revenue surges 28% to $60.8B, but soaring AI costs squeeze margins
META is trading near its 52-week low of $520.26 (6.3% above the low).
Summary
Meta's Q2 revenue rose 28% to $60.8 billion, but a 55% jump in costs—including $2.4 billion in legal charges and surging AI infrastructure spending—pushed net income down 14%. Free cash flow nearly evaporated, and the company raised its full-year expense guidance while slashing its 2026 capex forecast from the $145 billion plan announced in June. Shares fell 5-10% after hours.
Updated with a Wiseek News report · What changed
Updates
· Wiseek News — Operating margin compressed to 31% and 2026 capex forecast was slashed from the $145B plan announced in June. Shares fell 5-10% after hours.
· SEC 10-Q — 10-Q shows Q2 revenue $60.80B, net income $15.85B, diluted EPS $6.18, and cash and equivalents $15.46B at June 30.
Key Events · Earnings and Guidance · META
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New · · Wiseek News
Shares Fall After Hours
Shares fell 5-10% after hours.
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Updated · · Wiseek News
AI Spending Crushes Margins
Operating margin contracted to 31% from 43% a year ago, driven by a $2.40 billion legal charge, $1.18 billion in severance, and a massive ramp in infrastructure spending—capex hit $31.08 billion in the quarter.
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Updated · · Wiseek News
Full-Year Guidance Raised, Capex Slashed
Meta raised its 2026 expense outlook to $165-169 billion and slashed its 2026 capex forecast from the $145 billion plan announced in June, narrowing capex guidance to $130-145 billion. Q3 revenue is guided to $61-64 billion.
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Revenue Beats, Profit Misses
Q2 revenue of $60.80 billion grew 28% year-over-year, but net income fell 14% to $15.85 billion as costs and expenses surged 55% to $42.03 billion.
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Free Cash Flow Nearly Vanishes
Free cash flow plummeted to $784 million from $8.55 billion a year ago, as heavy capex consumed almost all operating cash flow.
Analysis · META · Technology
Top-line momentum was unmistakable, with revenue climbing 28% to $60.8 billion, yet the price of Meta's AI ambitions is becoming harder to ignore. Expenses ballooned 55% to $42 billion, weighed down by a $2.4 billion legal charge, severance tied to layoffs, and heavy infrastructure outlays. As a result, operating income contracted 8% and net income fell 14%, even as the company funnels cash into data centers and GPUs—capital expenditures alone reached $31 billion for the quarter. Free cash flow collapsed to just $784 million from $8.5 billion a year ago, raising legitimate questions about the sustainability of this spending trajectory. Management raised its full-year expense outlook but slashed its 2026 capex forecast from the $145 billion plan announced in June, signaling that the pressure is unlikely to ease soon. Set against a backdrop of regulatory headwinds and a recent security breach, the results paint a picture of a company making an aggressive AI bet at the expense of near-term profitability, and investors reacted by sending shares down 5-10% after hours.
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In the 30 days to Oct 5, 2026, 36.9% of the 966 measured filings Wiseek scored 8 moved their stock by 5% or more by the next session's close. The median move was -0.66%. These are measured outcomes after filings of this importance, not a forecast for this one.
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At the time of this filing, META was trading at $553.00 on NASDAQ in the Technology sector, with a market capitalization of approximately $1.5T. The 52-week trading range was $520.26 to $796.25. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.