Meta Revenue Accelerates as Capital Spending Weighs on Cash Flow
The social media giant reported second-quarter revenue of $60.80 billion, a 28% increase from the prior year.
Meta Platforms (META), the social media conglomerate, reported second-quarter revenue that rose 28% year-over-year to $60.80 billion. The growth rate accelerated from the 22% increase recorded in the same period last year.
While top-line growth strengthened, the company saw a significant contraction in profitability and liquidity. Operating margin compressed to 31% from 43% in the second quarter of 2025. Free cash flow plummeted to $784 million, down from $8.55 billion in the prior-year quarter.
Total costs and expenses rose 55% year-over-year to $42.03 billion, compared to a 12% increase in the second quarter of 2025. These expenses included $2.40 billion in legal charges and $1.18 billion in severance costs.
Advertising performance remained a primary driver of revenue. Ad impressions increased 14% year-over-year, while the average price per ad rose 12%. However, user growth slowed; family daily active people grew 3% year-over-year to 3.60 billion in June 2026, a deceleration from the 6% growth reported in June 2025.
Infrastructure investment drove a sharp increase in spending. Capital expenditures rose to $31.08 billion from $17.01 billion in the prior-year quarter. To support these activities, long-term debt increased to $83.66 billion as of June 30, 2026, up from $58.74 billion at the end of 2025.
Meta narrowed its full-year 2026 capital expenditure guidance to $130-145 billion from a previous range of $125-145 billion. The company raised its total expense guidance for the year to $165-169 billion from $162-169 billion to account for the second-quarter legal charges.
The company also raised its expected tax rate for the remaining quarters of 2026 to 15-17% from a prior outlook of 13-16%. Headcount decreased 1% year-over-year to 75,472 employees as of June 30, 2026, following a reduction in May 2026 that impacted approximately 8,000 workers.