Meta Platforms, Inc. · Q2 2026 call

First, we are now at a point where our investments in AI are accelerating every major part of our core business. They're improving the experience for people using our apps, driving better performance for advertisers, and helping our teams build new experiences and ship faster. Second, we're developing new personal agents that will be the foundation for our next wave of products and revenue lines in the months and years ahead. Third, we see a large enterprise opportunity to sell to businesses, including APIs, business agents, potentially selling compute directly, and other services that we're building for large customers.

On a dollar basis, our ads business is reporting faster year-over-year revenue growth than any other company's reported ad business -- so these AI investments are paying off.

Yesterday, as part of our Meta Compute effort, we announced a new strategic venture with BlackRock to develop a new 1GW data center in El Paso, Texas.

We've built our API, we're rolling out business agents, we're getting a lot of offers for compute at a significant premium over what we paid for it, and we have more coding and productivity tools on our roadmap as well.

Our glasses remain one of the fastest-growing consumer electronics of all time, and we continue adding to the line-up. […] Early sales have been strong, exceeding our expectations.

We're the only major company building AI with the primary goal of putting superintelligence directly into people's hands. Rather than centralizing superintelligence, we're focused on distributing it widely and giving everyone the ability to direct it towards what matters to them.

For the first time, quarterly Family of Apps other revenue reached $1 billion and grew 73% year-over-year, driven primarily by WhatsApp paid messaging and subscriptions revenue.

Q2 total expenses were $42 billion, up 55% compared to last year, and included $2.4 billion in charges related to legal proceedings and $1.2 billion in severance expenses in connection with the May 2026 headcount reduction.

Excluding the Q2 legal charges and severance expenses, our second quarter operating income would have increased 9% year-over-year.

Capital expenditures, including principal payments on finance leases, were $31.1 billion, driven by investments in servers, data centers, and network infrastructure. Free cash flow was $784 million. We ended the quarter with $90.3 billion in cash and marketable securities and $83.7 billion in debt.

And then also the opportunity to sell compute directly where I mean, I mentioned that we have quite a number of offers at a meaningful premium over what we paid for the compute. The question and thinking about this is we believe that there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly.

we aren’t providing a specific outlook for 2027 CapEx at this time. […] Generally, we believe near term capacity is more valuable than long term capacity and it remains a very dynamic planning process.

But we’ve also been evolving our capital structure in recent years to include a greater mix of debt as we work to bring down our cost of capital. And we have generally found it prudent to continue adding cost efficient long duration sources of capital as we make investments in initiatives that themselves have long time horizons, especially AI infrastructure projects.

I mean right now the open source models are not as strong as the frontier models. So no is the basic answer.

And I mean look, I get that this is a big investment and it’s a big bet. We see the technology working. We’re happy with the trajectory of the lab. I’m excited about the products that are coming, and we believe that this is going to be a big thing. So I mean I get that this is sort of a big bet across the industry. My personal bet is that the people who invest in this are going to be rewarded and feel very good over time.

we are today, and expect to be in the sort of foreseeable future, supply constrained, and that really includes our core business, too, where there are -- we still have numerous ROI positive places that we would put compute toward if we had it.