Meta Platforms Reports Earnings Miss Amid Rising Costs
Meta Platforms reported second-quarter earnings results below expectations despite strong revenue growth of 28% year-over-year to $60.8 billion. However, net income fell by 14%, coming in at $15.8 billion or $6.18 per share—well short of the consensus forecast of $7.17 and marking a significant decline from previous performance levels. The drop was attributed primarily to rising costs and expenses that surged by nearly $15 billion, driven largely by investments in artificial intelligence (AI) development, legal proceedings, severance for layoffs, and increased capital expenditures. Meta's management highlighted the need for higher employee compensation and third-party AI token costs as key contributors. Capital expenditures rose 83% to over $31 billion this quarter, with projections now set at $130–$145 billion in total capex for 2026—up from earlier forecasts. The company is betting heavily on internal AI development and infrastructure under CEO Mark Zuckerberg’s leadership as a long-term growth strategy. The stock dropped nearly 9% after hours following the earnings report, reflecting investor concerns over profitability and spending pressures.
Tickers: $META
Topics: Earnings Report Meta Stock Performance