Meta posts 14% earnings decline as cash flow plunges 91% and AI push continues
Meta reported a 14% drop in quarterly profit and a 91% fall in free cash flow, while noting growth in revenue and user numbers and emphasizing its AI strategy.
Meta Platforms reported earnings of $15.85 billion, or $6.18 per share, for the April-June quarter, down 14% from a year earlier. Revenue rose 28% to $60.8 billion, slightly above analysts’ expectations of $60.22 billion. The company said daily active users across Facebook, Messenger, Instagram, WhatsApp and Threads increased 3% to 3.6 billion, with Instagram reaching 2 billion daily users and Threads reporting 500 million monthly active users.
Expenses rose 55% year-over-year to $42.03 billion, driven by $2.4 billion in legal costs and $1.18 billion in severance payments related to recent layoffs. Free cash flow fell sharply, dropping 91% to $784 million from $8.55 billion a year earlier. The firm forecast third-quarter revenue of $61-$64 billion, below the $63.14 billion consensus estimate, and lifted the lower bound of its 2026 expense outlook to $165 billion.
CEO Mark Zuckerberg said AI is “accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities.” He also authored an op-ed in the Wall Street Journal arguing that AI could soon provide “personal superintelligence to everyone.”
Shares fell 4.2% in after-hours trading following the release of the results.