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Meta Platforms stock (NASDAQ:META) jumped some 10% just after posting its second-quarter earnings report, where the company blew away expectations on top and bottom lines, and against the backdrop that Meta and other tech firms have been sharply ramping up spending as the race for AI breakthroughs intensifies.
Revenue grew 22% year-over-year to $47.5B, easily beating expectations for 15% growth (to $44.8B).
Costs and expenses rose just 12%, to $27.1B, and so operating income jumped 38%, to $20.4B. Operating margin increased to 43% from a year-ago 38%.
Net income rose 36% to $18.3B.
“We’ve had a strong quarter both in terms of our business and community,” said founder/CEO Mark Zuckerberg in his typically terse initial reaction. “I’m excited to build personal superintelligence for everyone in the world.”
Revenue breakouts and operations
Of the $47.5B in revenue, nearly all comes from advertising revenues, which rose 21% to $46.6B. Revenue in Meta’s “Family of Apps” rose 22% to $47.2B, while revenue at Reality Labs (the company’s home for skunkworks research projects) rose 5% to $370M vs. a consensus gathered by Bloomberg for $386M.
Other revenue grew 50% year-over-year to $583M, vs. consensus for $500.6M.
As for operating numbers, Daily Active People in the Family of Apps averaged 3.48B for June, up 6% from the prior year. Ad impressions rose 11%, and average price per ad rose 9%.
Capital spending and cash flow
Meta (NASDAQ:META) had raised its forecast for capital expenditures with its last earnings report, and gave those expectations another small bump Wednesday, saying it now sees full-year capex at $66B-$72B, vs. a previous $64B-$72B.
That’s up some $30B year-over-year at the midpoint of the forecast.
Cash from operations was $25.6B, and free cash flow was $8.55B, leaving liquidity at $47.07B as of June 30.
Guidance
The company sees third-quarter revenue in the range of $47.5B-$50.5B, above $46.3B expected.
“While we are not providing an outlook for fourth quarter revenue, we would expect our year-over-year growth rate in the fourth quarter of 2025 to be slower than the third quarter as we lap a period of stronger growth in the fourth quarter of 2024,” Chief Financial Officer Susan Li said.
Meanwhile, along with the capex guidance for $66B-$72B, full-year total expenses are expected at $114B-$118B, a growth rate of 20-24% year-over-year.
Conference call to come at 5 p.m. ET.