- Meta reported Q2 2026 revenue of $60.80 billion, beating estimates, but earnings per share of $6.18 missed the $7.22 forecast.
- Free cash flow collapsed to $784 million from $8.55 billion a year ago, driven by $31.1 billion in capital expenditures on AI infrastructure.
- Shares dropped up to 7.45% after the report, extending the year-to-date decline to 11% as the Nasdaq gained 5%.
Meta shares tumbled after the company posted second quarter results that beat on revenue but showed free cash flow nearly disappearing. Revenue came in at $60.80 billion against a forecast of $60.17 billion, yet earnings per share of $6.18 missed the $7.22 analysts expected.
Consequently, net income slid to $15.85 billion from $18.34 billion a year earlier. The stock dropped as much as 7.45% immediately after the report, adding to an 11% decline for the year.
Operating cash flow held steady at $31.9 billion, nearly flat with the first quarter. However, capital expenditures surged to $31.1 billion, a jump of more than 50% from the prior quarter, leaving free cash flow at just $784 million.
Meta AI spending on data centers drove the cost increase, with full-year capex guidance raised to $130 billion to $145 billion. Mark Zuckerberg said: “We also expect to grow a large business serving large customers as well.”
Meanwhile, ad impressions rose 14% year over year and average price per ad climbed 12%, though revenue growth decelerated from 33% to 28%. The company closed the quarter with $90.3 billion in cash and marketable securities.
The earnings report gave bulls advertising strength and skeptics the thin cash flow line. The Meta stock buy or sell question now boils down to whether advertising can grow fast enough to justify the spending spree.
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