Meta Reports Surprise Q2 Earnings, Shares Surge 10% After Hours

Zuckerberg: "Very Excited to Build Personal Superintelligence"

Meta Platforms (hereafter Meta) announced "surprise earnings" that exceeded market expectations.

EPA Yonhap News

On July 30 (local time), Meta reported second-quarter results with revenue of $47.52 billion and earnings per share (EPS) of $7.14. Both revenue and EPS significantly surpassed Wall Street estimates compiled by research firm LSGE, which were $44.8 billion and $5.92, respectively. Revenue increased by 21.6% compared to the previous year, and net income reached $18.34 billion, up 18%. Advertising revenue, which accounts for the majority of Meta's revenue, was $46.56 billion, also beating the Wall Street estimate of $43.97 billion.

The Reality Labs division, which is responsible for developing virtual reality (VR) and augmented reality (AR) technologies, recorded $370 million in revenue and an operating loss of $4.53 billion in the second quarter. Reality Labs develops the Quest series of VR headsets and Ray-Ban smart glasses, and is also working on a new immersive AR smart glasses project called "Orion." Since the end of 2020, cumulative losses in this division have increased to about $70 billion.

Meta stated that third-quarter revenue is expected to be between $47.5 billion and $50.5 billion. This exceeds the Wall Street estimate of $46.14 billion. However, regarding fourth-quarter growth, Meta said, "Due to the strong growth in the fourth quarter of last year, growth will slow compared to the third quarter."

Total costs and expenses for the second quarter were $27.07 billion, up 12% year-over-year. This year, total costs are expected to be between $114 billion and $118 billion, with the lower end raised from the previous forecast of $113 billion to $118 billion. Capital expenditures were also revised upward, with the lower end raised from the previous forecast of $64 billion to $72 billion, now expected to be between $66 billion and $72 billion. Meta stated, "Personnel costs, including hiring, will be the second largest growth factor," and added, "The annual cost growth rate in 2026 will be higher than this year."

The daily active users (DAU) of Meta's apps, including Facebook and Instagram, reached 3.48 billion in the second quarter, an increase of 50 million from the previous quarter, surpassing the estimate of 3.45 billion. CEO Mark Zuckerberg said in a statement, "We achieved strong results in both business and community this quarter," and added, "We are very excited to build personal superintelligence for everyone around the world."

On this day, Meta's stock price fell 0.68% during regular trading on the New York Stock Exchange, but surged about 10% in after-hours trading following the earnings announcement.