◆ Inside the Latest Quarter (Q2 2026)

Meta Platforms (META) — the variant view

Advertising still grew 27%, but AI spending, legal charges and severance took the margin from 43% to 31% and left $784 million of free cash flow.

📈 META valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Meta's second quarter of 2026, to the end of June, was the first in which the cost of its AI programme showed up plainly in the profit line. Revenue rose 28% to $60,801 million, advertising 27% to $59,363 million, with impressions up 14% and the price per ad up 12%. Operating income fell 8% to $18,775 million, the operating margin from 43% to 31%, and net income 14% to $15,848 million.1

Q2 2025 against Q2 2026 ($B)Q2 2025Q2 2026Revenue47.560.8FoA operating income25.023.4Capital expenditure17.031.1Free cash flow8.50.8Meta Q2 2026 results release (8-K exhibit 99.1) and Form 10-Q
Revenue up 28%, segment profit down, capex up 83% and free cash flow almost gone.

Some of the fall was one-off. Costs included $2.40 billion of charges related to legal proceedings and $1.18 billion of severance for the roughly 8,000 people cut in May.2 Some of it was not: research and development rose 67% to $21,656 million, driven by compensation, data centres, cloud services and third-party AI token costs, and total costs grew 55%.34 The Family of Apps, which had earned a 52% operating margin in 2025, made $23,394 million in the quarter against $24,971 million a year earlier.56

Cash told the same story more sharply. Operating cash flow was $31.86 billion and capital expenditure $31.08 billion, leaving free cash flow of $784 million against $8,549 million a year earlier; long-term debt stood at $83.66 billion.7 Meta narrowed its 2026 capital guidance to $130-145 billion from $125-145 billion and guided third-quarter revenue to $61-64 billion.8

The users kept coming, slowly. Daily active people averaged 3.60 billion in June, up 3%, after a dip in the first quarter that Meta attributed to internet disruptions in Iran and restricted WhatsApp access in Russia; revenue per person rose 24% to $16.86.9 Reality Labs lost $4,619 million on $431 million of revenue.10

So the quarter separates two questions the market had run together. The advertising engine is still growing by more than a quarter a year, which answers the moat question. Whether the money it throws off will earn a return once it has been poured into data centres is the open one, and a free-cash-flow line near zero is where that question now gets answered each quarter.

References
  1. ReportedOperating income fell 8% to $18,775 million, the operating margin from 43% to 31%, and net income 14% to $15,848 million.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
  2. ReportedCosts included $2.40 billion of charges related to legal proceedings and $1.18 billion of severance for the roughly 8,000 people cut in May.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
  3. ReportedSome of it was not: research and development rose 67% to $21,656 million, driven by compensation, data centres, cloud services and third-party AI token costs, and total costs grew 55%.
    Meta Form 10-Q, quarter ended 30 June 2026 - DAP 3.60B in June 2026 from 3.48B (+3%), the Q1 dip due to internet disruptions in Iran and restricted WhatsApp access in Russia; ARPP $16.86 (+24%); revenue by customer address US & Canada $23,863M, Europe $14,009M, Asia-Pacific $16,073M, Rest of World $6,856M; R&D $21,656M (+67%) including third-party AI token costs; FTC v. Meta: trial April-May 2025, judgment for Meta on 18 November 2025, FTC notice of appeal 20 January 2026; resellers serving China-based advertisers risk factor — Q2 2026 · publ. July 30, 2026 · source ↗
  4. ReportedSome of it was not: research and development rose 67% to $21,656 million, driven by compensation, data centres, cloud services and third-party AI token costs, and total costs grew 55%.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
  5. ReportedThe Family of Apps, which had earned a 52% operating margin in 2025, made $23,394 million in the quarter against $24,971 million a year earlier.
    Meta Platforms Form 10-K, FY2025 - revenue $200,966M ($164,501M, $134,902M); advertising $196,175M ($160,633M, $131,948M); other revenue $2,584M; Family of Apps revenue $198,759M and income from operations $102,469M ($87,109M, $62,871M), a 52% operating margin (54%, 47%); Reality Labs revenue $2,207M and loss $19,193M; DAP 3.58B for December 2025 (+7%); ad impressions +12% and average price per ad +9% in 2025 (+11% and +10% in 2024); revenue by customer address US & Canada $78,866M, Europe $46,569M, Asia-Pacific $53,817M, Rest of World $21,714M; capital expenditures including finance-lease principal $72.22B; free cash flow $43,585M; headcount 78,865 — FY2023-FY2025 · publ. January 29, 2026 · source ↗
  6. ReportedThe Family of Apps, which had earned a 52% operating margin in 2025, made $23,394 million in the quarter against $24,971 million a year earlier.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
  7. ReportedOperating cash flow was $31.86 billion and capital expenditure $31.08 billion, leaving free cash flow of $784 million against $8,549 million a year earlier; long-term debt stood at $83.66 billion.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
  8. ReportedMeta narrowed its 2026 capital guidance to $130-145 billion from $125-145 billion and guided third-quarter revenue to $61-64 billion.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
  9. ReportedDaily active people averaged 3.60 billion in June, up 3%, after a dip in the first quarter that Meta attributed to internet disruptions in Iran and restricted WhatsApp access in Russia; revenue per person rose 24% to $16.86.
    Meta Form 10-Q, quarter ended 30 June 2026 - DAP 3.60B in June 2026 from 3.48B (+3%), the Q1 dip due to internet disruptions in Iran and restricted WhatsApp access in Russia; ARPP $16.86 (+24%); revenue by customer address US & Canada $23,863M, Europe $14,009M, Asia-Pacific $16,073M, Rest of World $6,856M; R&D $21,656M (+67%) including third-party AI token costs; FTC v. Meta: trial April-May 2025, judgment for Meta on 18 November 2025, FTC notice of appeal 20 January 2026; resellers serving China-based advertisers risk factor — Q2 2026 · publ. July 30, 2026 · source ↗
  10. ReportedReality Labs lost $4,619 million on $431 million of revenue.
    Meta Q2 2026 results release (Form 8-K exhibit 99.1, 29 July 2026) - revenue $60,801M (+28%, +27% excluding currency); advertising $59,363M (+27%); Family of Apps income from operations $23,394M against $24,971M; Reality Labs revenue $431M and loss $4,619M; operating margin 31% against 43%; net income $15,848M (-14%); costs include $2.40B of legal charges and $1.18B of severance; ad impressions +14% and average price per ad +12%; DAP 3.60B (+3%); capital expenditures $31.08B; free cash flow $784M against $8,549M; long-term debt $83.66B; headcount 75,472; 2026 capex guided $130-145B (from $125-145B); H1 advertising $114,387M against $87,955M — Q2 2026 · publ. July 29, 2026 · source ↗
Sources
Generated September 23, 2026