Meta released its Q2 2026 financial report, showing revenue growth but a decline in net profit

Sina Finance
2026.07.30 07:35

Meta released its Q2 2026 financial report, with revenue of $60.8 billion, a year-on-year increase of 28%. However, due to high operating costs, litigation fees, and severance costs, net profit fell 14% year-on-year to $15.85 billion. Reality Labs reported a loss of $4.62 billion. Zuckerberg stated that AI is driving the development of core business and expressed optimism about the outlook. The company raised its full-year capital expenditure forecast to $130 billion to $145 billion and warned of facing regulatory scrutiny regarding youth protection

On July 29, local time, the American company Meta released its second-quarter earnings report for the fiscal year 2026. The data shows that the company achieved operating revenue of $60.8 billion in the quarter, a year-on-year increase of 28%; however, due to high operating costs and legal litigation expenses, net profit for the quarter fell 14% year-on-year to $15.85 billion, with diluted earnings per share dropping to $6.18.

In terms of core business data, the daily active users of the Family of Apps, which includes Facebook, Instagram, and WhatsApp, increased to 3.6 billion, with ad impressions growing 14% year-on-year and average ad prices rising 12%. However, the Reality Labs, responsible for virtual reality and metaverse-related businesses, continued to face significant losses, with an operating loss of $4.62 billion for the quarter.

Regarding the decline in net profit for the quarter, the financial report indicates that the surge in costs and expenses is the main reason. Meta's total costs and expenses for the second quarter reached $42.03 billion, a staggering increase of 55% year-on-year. This includes $2.4 billion in legal litigation-related expenses and $1.18 billion in severance pay due to layoffs the company conducted in May this year. Additionally, influenced by the expansion of investments in artificial intelligence infrastructure, the company's capital expenditures for the quarter reached $31.08 billion, leading to a significant shrinkage of free cash flow to $784 million.

Meta's founder and CEO Mark Zuckerberg pointed out that artificial intelligence is accelerating the development of the company's core business, powering the next generation of products and opening up new opportunities for enterprise-level services. He emphasized that the relevant strategic layout has begun to show initial results in performance, and the company holds an optimistic outlook on future development potential.

Looking ahead to the third quarter, Meta expects operating revenue to be between $61 billion and $64 billion. To support ongoing investments in areas such as artificial intelligence, the company has raised the lower limit of its full-year capital expenditure forecast for 2026, expecting total capital expenditures for the year to reach between $130 billion and $145 billion. At the same time, Meta warned in its financial report that the company is currently facing strict regulatory scrutiny regarding youth protection issues in multiple markets, with several related lawsuits in the United States this year, and the potential adverse outcomes may significantly impact the company's future business and financial condition

Source: Sina Finance The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.