Meta Platforms, Inc. (hereafter Meta), the parent company of Facebook, announced second-quarter (April to June) results that exceeded market expectations, leading to a nearly 10% surge in its stock price during after-hours transactions. Both sales and net income saw significant increases, attributed to rising advertising revenue and expense adjustments, and the annual capital expenditure outlook was also revised upward.
Meta reported on the 30th (local time) that its second-quarter revenue reached $47.52 billion, with earnings per share of $7.14. This significantly surpassed Wall Street's estimates, compiled by market research firm LSGE, which were $44.8 billion in revenue and $5.92 in earnings per share.
Compared to the same period last year, revenue increased by 21.6%, and net income rose to $18.34 billion, an 18% increase. Advertising revenue, which accounts for most of the total revenue, was $46.56 billion, exceeding the estimated $43.97 billion.
The Reality Labs institutional sector, which develops virtual reality (VR) and augmented reality (AR) technologies, reported second-quarter revenue of $370 million, with an operating loss of $4.53 billion. This sector is developing the 'Quest' series of VR headsets and Ray-Ban smart glasses, and is also working on new AR smart glasses called 'Oryon'. Since the end of 2020, the cumulative losses of the Reality Labs sector have reached approximately $70 billion.
Meta projected third-quarter revenue in the range of $47.5 billion to $50.5 billion, which is above the Wall Street estimate of $46.14 billion. However, it forecasted that the growth rate for the fourth quarter of this year would slow compared to the third quarter due to base effects from strong growth during the same period last year.
Total expenses and expenditures in the second quarter amounted to $27.07 billion, a 12% increase compared to the same period last year. The annual total expense outlook for this year is projected at $114 billion to $118 billion, with the lower end adjusted upward from the previous estimate of $113 billion to $118 billion. Capital expenditure was also raised from the previous range of $64 billion to $72 billion to $66 billion to $72 billion.
Meta explained that hiring and other labor costs are among the primary factors for the increase in expenses and projected that the annual expense growth rate for 2026 will be higher than in 2025.
As of the second quarter, the daily active user count of Meta's apps, including Facebook and Instagram, reached 3.48 billion, an increase of 50 million compared to the previous quarter. This exceeded the market expectation of 3.45 billion.
CEO Mark Zuckerberg noted in a statement, "This quarter, we achieved strong results in both business and community aspects," and added, "I am very excited about building personal superintelligence for everyone around the world."