Meta Platforms saw its stock plunge more than 10% in after-hours trading on Wednesday after reporting second-quarter results that missed Wall Street expectations on earnings per share and issued a weaker-than-expected revenue forecast for the current quarter.
Here's how Meta performed against analyst estimates: - Earnings per share: $6.18 vs. $7.22 expected - Revenue: $60.80 billion vs. $60.17 billion expected - Daily active people: 3.6 billion vs. 3.61 billion expected
Meta guided for Q3 revenue of $61 billion to $64 billion, with a midpoint of $62.5 billion — below the $63.15 billion analysts had expected. The company narrowed its full-year capital expenditure guidance to $130 billion–$145 billion, up from a prior range of $125 billion–$145 billion.
The most striking figure was the collapse of free cash flow, which plummeted to just $784 million in the quarter from $8.55 billion a year earlier. The sharp decline underscores the enormous cash burn from Meta's aggressive AI infrastructure buildout, which includes a $50 billion data center project in Louisiana, a $14 billion venture with BlackRock in El Paso, Texas, and a planned $9 billion facility in Alberta, Canada.
"Overall, we expect that a significant portion of our compute is going to go towards training our models, growing our core business, and delivering personal agents and new products," CEO Mark Zuckerberg said on the earnings call. "But we also expect to grow a large business serving large customers as well."
Net income fell to $15.85 billion from $18.34 billion in the same quarter last year. Total costs and expenses surged 55% year-over-year to $42.03 billion, including $2.4 billion in legal charges and $1.18 billion in severance from layoffs that began in May.
Meta's Reality Labs unit, which develops VR and AI wearables, posted $4.6 billion in operating losses on $431 million in revenue.
The earnings miss comes at a delicate time for Meta, which has been aggressively investing in AI since hiring Scale AI chief Alexandr Wang in June 2025 in a deal involving a $14.3 billion investment. Earlier this month, Meta debuted the Muse Spark 1.1 model, which Wang called the "strongest model for agentic and coding work yet."
Unlike Alphabet, Amazon, and Microsoft, Meta lacks a major cloud computing business — though Zuckerberg noted the company is getting "a lot of offers for compute at a significant premium over what we paid for it."
