Meta reported mixed second-quarter results, beating revenue expectations but falling short on earnings per share (EPS). The earnings miss was largely driven by one-time charges, including $2.4 billion in legal contingencies and $1.2 billion in severance costs. Excluding these expenses, the company would have exceeded analysts' EPS estimates.
For the quarter, Meta generated $60.8 billion in revenue, slightly above Wall Street expectations, while advertising revenue also topped forecasts at $59.3 billion. Looking ahead, the company projected third-quarter revenue between $61 billion and $64 billion, with the midpoint coming in just below analysts' estimates.
Meta also revised its 2026 capital expenditure outlook, raising the lower end of its planned spending range to $135 billion-$145 billion, signaling continued heavy investment in AI infrastructure.
To support its AI ambitions, Meta and BlackRock recently announced plans to build a $14 billion, one-gigawatt data center in Texas, with BlackRock owning 80% of the project and Meta holding the remaining 20%. CEO Mark Zuckerberg has also suggested the company could lease excess data center capacity to external customers, a strategy similar to those used by AI infrastructure providers.
Earlier this month, Meta introduced its Spark 1.1 AI model and adopted an aggressive pricing strategy aimed at undercutting competitors such as OpenAI and Anthropic. The company is charging significantly lower rates for AI model usage, positioning itself to attract developers and price-sensitive customers while expanding its share of the growing AI market.
Following the earnings release, Meta shares fell nearly 8% in after-hours trading as investors reacted to the EPS miss and a third-quarter revenue outlook that came in slightly below market expectations.
