Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) missed second-quarter profit estimates on Wednesday, weighed down by a jump in costs including legal charges, even as revenue grew faster than expected.
The social media giant reported earnings per share of $6.18, down 13% year-over-year and well below the $7.22 analysts had expected. Revenue came in at $60.8 billion, up 28% from a year earlier and ahead of the $60.17 billion consensus estimate.
Operating income fell 8% to $18.8 billion, missing the $21.5 billion estimate, as costs and expenses jumped 55% to $42 billion. Operating margin contracted 1,200 basis points to 31%. Net income dropped 14% to $15.8 billion. The results included $2.40 billion of legal proceeding charges recognized in the quarter.
Daily active people came in at 3.6 billion, up 3% year-over-year but just shy of the 3.61 billion estimate.
Advertising revenue rose 27% to $59.4 billion, topping the $59.01 billion estimate, driven by a 14% increase in ad impressions and a 12% rise in average price per ad. Family of Apps revenue climbed 28% to $60.4 billion, with operating income of $23.4 billion for the segment.
Reality Labs revenue was $431 million, below the $441.5 million estimate, while the unit posted an operating loss of $4.62 billion, narrower than the roughly $5 billion loss analysts had forecast.
Meta raised its full-year 2026 capital expenditure guidance to a range of $130 billion to $145 billion, up from a prior forecast of $125 billion to $145 billion. Capital expenditure in the quarter totaled $31.08 billion, below the roughly $33.7 billion estimate.
For the third quarter, Meta guided revenue of $61 billion to $64 billion, versus a $63.15 billion estimate. Full-year 2026 expenses are now expected to be $165 billion to $169 billion, raised to account for the second-quarter legal charges. The company said full-year operating income would remain above the 2025 level, and raised its expected remaining tax rate for the year to a range of 15% to 17%, from a prior 13% to 16%.
Headcount stood at 75,472, down 1% year-over-year.
Operating cash flow was $31.9 billion and free cash flow was $784 million. The company paid $1.35 billion in dividends and equivalents during the quarter and held $90.26 billion in cash, equivalents and marketable securities. Long-term debt stood at $83.66 billion.
"AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities," said Meta CEO Mark Zuckerberg. "The results are already showing, and I'm optimistic about the potential ahead."
Shares of Meta fell around 6.7% in after-hours trading following the results.
