Meta Reports Q2 Earnings, Misses on EPS But Beats on Revenue

Meta, the parent company of Facebook, Instagram, and WhatsApp, reported its second-quarter earnings after the bell on Wednesday, missing on earnings per share (EPS) but beating on revenue. The company’s stock slumped in premarket trading on Thursday, with shares dropping by nearly 9%.

For the quarter, Meta saw EPS of $6.18 on revenue of $60.8 billion. Analysts had anticipated EPS of $7.14 and revenue of $60.2 billion, based on Bloomberg consensus estimates.

The EPS miss came down to $2.4 billion for Meta’s legal contingencies and a $1.2 billion charge for severance expenses. Without these expenses, the company would have beaten expectations.

Meta’s Q2 advertising revenue came in at $59.3 billion, slightly higher than the expected $59.07 billion. The company’s advertising revenue has been a key driver of its growth in recent quarters.

Meta’s Q3 Revenue Outlook

For the third quarter, Meta anticipates revenue between $61 billion and $64 billion, missing the midpoint of $63.1 billion that Wall Street had been expecting.

Despite the revenue miss, Meta’s Q3 guidance suggests that the company is still on track for a strong finish to the year. The company’s revenue growth has been driven by its advertising business, which has seen significant growth in recent quarters.

Capital Expenditure Hike

Meta also raised its capital expenditure estimates for 2026, increasing them to between $135 billion and $145 billion from $125 to $145 billion. This represents a significant increase in the company’s investment in its infrastructure and technology.

The company’s decision to increase its capital expenditure reflects its commitment to investing in its future growth and development. Meta has been investing heavily in its data centers and artificial intelligence capabilities, which are expected to drive its growth in the coming years.

Musk Spark 1.1 Model

Meta also debuted its new Musk Spark 1.1 model this month, which offers an aggressive pricing scheme that significantly undercuts the cost of using models from OpenAI and Anthropic.

The Musk Spark 1.1 model charges developers $1.25 per million input tokens and $4.25 per million output tokens, compared to Anthropic’s Opus 4.8 model, which charges $5 per million input tokens and $25 per million output tokens.

By setting prices so low, Meta could take market share from the big AI labs as price-conscious customers seek better deals on AI models.

Data Center Deal with BlackRock

Meta and BlackRock announced a deal to build a $14 billion, 1-gigawatt data center in Texas. BlackRock will hold an 80% stake in the site, while Meta will get the remaining 20%.

This deal reflects Meta’s commitment to investing in its data center infrastructure and its ability to partner with other companies to achieve its goals.

Meta’s stock has been under pressure in recent weeks, but the company’s Q2 earnings and its decision to increase its capital expenditure suggest that it is still on track for a strong finish to the year.

The company’s focus on investing in its future growth and development, as well as its commitment to partnering with other companies to achieve its goals, suggests that it is well-positioned for long-term success.