Meta Revenue Accelerates as Capital Spending Weighs on Cash Flow

Companies

• META

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Meta Platforms (META), the social media conglomerate, reported second-quarter revenue that rose 28% year-over-year to $60.80 billion [1][2]. The growth rate accelerated from the 22% increase recorded in the same period last year [1][2].

While top-line growth strengthened, the company saw a significant contraction in profitability and liquidity. Operating margin compressed to 31% from 43% in the second quarter of 2025 [1][2]. Free cash flow plummeted to $784 million, down from $8.55 billion in the prior-year quarter [1][2].

Total costs and expenses rose 55% year-over-year to $42.03 billion, compared to a 12% increase in the second quarter of 2025 [1][2]. These expenses included $2.40 billion in legal charges and $1.18 billion in severance costs [1][2].

Advertising performance remained a primary driver of revenue. Ad impressions increased 14% year-over-year, while the average price per ad rose 12% [1]. However, user growth slowed; family daily active people grew 3% year-over-year to 3.60 billion in June 2026, a deceleration from the 6% growth reported in June 2025 [1][2].

Infrastructure investment drove a sharp increase in spending. Capital expenditures rose to $31.08 billion from $17.01 billion in the prior-year quarter [1][2]. To support these activities, long-term debt increased to $83.66 billion as of June 30, 2026, up from $58.74 billion at the end of 2025 [1][3].

Meta narrowed its full-year 2026 capital expenditure guidance to $130-145 billion from a previous range of $125-145 billion [4][5]. The company raised its total expense guidance for the year to $165-169 billion from $162-169 billion to account for the second-quarter legal charges [4][5].

The company also raised its expected tax rate for the remaining quarters of 2026 to 15-17% from a prior outlook of 13-16% [4][5]. Headcount decreased 1% year-over-year to 75,472 employees as of June 30, 2026, following a reduction in May 2026 that impacted approximately 8,000 workers [1][2].

Citations

citations[5]{marker,ticker,item,date,accession,source}:
  1,META,ex_99_1,2026-07-29,0001628280-26-050596,filing
  2,META,ex_99_1,2025-07-30,0001628280-25-036719,filing
  3,META,ex_99_1,2026-07-29,0001628280-26-050596,filing
  4,META,ex_99_1,2026-07-29,0001628280-26-050596,filing
  5,META,ex_99_1,2026-04-29,0001628280-26-028364,filing