Meta, 2026 Q2 Earnings Results

01 Revenue, operating income and results versus expectations

Year over year · Revenue 47.516 → 60.801 B$ (+28.0% · +13.285 B$), Operating income 20.441 → 18.775 B$ (−8.2% · −1.666 B$).

Quarter over quarter · Revenue 56.311 → 60.801 B$ (+8.0% · +4.490 B$), Operating income 22.872 → 18.775 B$ (−17.9% · −4.097 B$), Operating margin 40.6% → 30.9% (−9.7%p).

Ad impressions increased 14% year over year, and the average price per ad increased 12%. Simultaneous growth in volume and price was central to the revenue increase.

02 Earnings sustainability · From operating income to net income

Total expenses were 42.026 B$, up approximately 55% year over year. Although they included legal costs of 2.400 B$ and workforce restructuring costs of 1.180 B$, R&D expenses also increased from 12.942 → 21.656 B$, so the margin decline cannot be explained solely by one-time costs.

Family of Apps operating income was 24.971 → 23.394 B$, and Reality Labs' operating loss was −4.530 → −4.619 B$. The decline in core-segment earnings despite advertising revenue growth is significant.

Operating income

18.775 B$

Net non-operating income/loss

−0.019 B$

Income tax expense

−2.908 B$

Consolidated net income

15.848 B$

Net income of 15.848 B$ in the existing quarterly data is on a consolidated basis.

03 Cash flow quality · Net income → OCF → FCF

OCF includes non-cash adjustments such as stock-based compensation of 7.658 B$ and depreciation and amortization of 6.356 B$. Stock-based compensation is not a current-period cash outlay, but it is an expense that may dilute shareholders.

Company FCF equals OCF 31.862 − cash CapEx 30.116 − finance lease principal 0.962 = 0.784 B$. This is below the simple OCF−CapEx figure of 1.746 B$; the two figures should not be used interchangeably.

Consolidated net income

15.848 B$

Total net adjustments, including non-cash items and working capital¹

16.014 B$

Operating cash flow

31.862 B$

Cash CapEx

−30.116 B$

Additional company-defined adjustments and disclosure rounding²

−0.962 B$

Company-defined FCF

0.784 B$

¹ Total net adjustments calculated as OCF minus net income. This is not a single disclosed line item; it combines non-cash items, working capital, classification differences and other adjustments.

² Difference between company FCF and OCF minus cash CapEx. The detailed scope follows the explanation above and the original definition.

FCF versus the previous quarter · 12.386 → 0.784 B$, a 11.602 B$ deterioration.

04 Financial capacity · Net debt and payment obligations

Net cash decreased by 15.836 B$ from the previous quarter. The carrying amount of current borrowings is 0.000 B$. This may differ from the principal maturity schedule.

Uncommenced lease commitments at the end of June were 278.990 B$, with expected commencement in 2026~2036 and contractual terms of more than 1 year to 30 years. These are not treated as cash outlays due within the next 1 year.

Additional lease commitments of 68.0 B$ entered into in July were described as commencing in 2027~2028 with terms of 18~20 years. This is a subsequent event, considered separately from June-end borrowings and lease liabilities.

Common definitions · Cash and liquid assets = cash equivalents + current investments and deposits. Borrowings = carrying amount of interest-bearing debt (current + non-current), excluding separate lease liabilities. This differs from total liabilities of 188.735 B$. Restricted cash, non-current securities and non-current deposits are excluded from cash and liquid assets.

05 Investment, capital allocation and cash recovery

Company-defined CapEx includes finance lease principal. Directly comparing cash CapEx that excludes this principal with the annual plan distorts the investment execution rate. As revenue and costs are rising together, the pace of cash recovery from AI investment still requires separate assessment.

This quarter, cash CapEx/revenue was 49.5% and FCF/revenue was 1.3%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.

06 Next-quarter and full-year outlook and implications

YoY +19.0%~+24.9% · QoQ +0.3%~+5.3%. Comparison revenue was 51.242 B$ in the corresponding prior-year quarter and 60.801 B$ in the current quarter. Growth rates were calculated from the underlying amounts.

The low ends of annual guidance were raised: total expenses from 162~169 → 165~169 B$, and CapEx including lease principal from 125~145 → 130~145 B$. The outlook for annual operating income to exceed 2025 was maintained.

Based on first-half total expenses of 75.464 B$, the remaining second-half spending range implied by annual expense guidance is 89.536~93.536 B$. This is derived from the annual range, rather than a company forecast for individual quarters.

The company expected an approximately 1% foreign-exchange headwind to next-quarter revenue. The tax-rate range for the rest of the year rose to 15~17%, from the previous 13~16%.

Quarterly results · CY-aligned view

Amounts in B$. The table shows all 4 quarters of the prior year and the current year's reported quarters, based on the report's CY-aligned year. Each fiscal quarter is assigned to the calendar quarter with the greatest overlap in its actual reporting period; the original FY/CY label and start and end dates are also shown. Amounts have not been recalculated into actual calendar quarters.

Indented rows are components of, or reference items for, the parent metric. Net cash = cash and liquid assets − borrowings. Depending on company definitions, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.