Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Meta's second quarter 2026 results reflected a powerful acceleration in advertising demand, with revenue rising at its fastest clip in recent periods as ad impressions grew 14% and average ad prices increased 12%. The online commerce vertical was the largest contributor to the gain, and the company's ongoing improvements in ad targeting and measurement continued to attract marketer spending. However, a sharp escalation in costs—most notably a 67% jump in R&D tied to heavy AI infrastructure investments and a $2.40 billion legal charge that more than doubled general and administrative expenses—overwhelmed the top-line strength, driving an 8% decline in operating income and compressing operating margins from 43% to 31%.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 6.18 | 7.36 | Miss -16.0% |
| Mar 2026 | 7.31 | 6.92 | Beat +5.6% |
| Dec 2025 | 8.88 | 8.40 | Beat +5.7% |
| Sep 2025 | 7.25 | 6.82 | Beat +6.2% |
Reported EPS of $6.18 versus the $7.36 analyst consensus — a -16.0% miss for Jun 2026.
2 reported segments · SEC XBRL
Segment revenue totals $60.8B, which is the $60.8B of consolidated revenue on the income statement. The profit column adds up to the consolidated figure as well.
Profit above is reported as operating income, the measure META itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
Total revenue grew 28% year-over-year to $60.80 billion, driven by a 14% increase in ad impressions and a 12% increase in average price per ad, with the online commerce vertical as the largest contributor.
Source: 10-Q Item 2 MD&A
Total costs and expenses surged 55% to $42.03 billion, with R&D up 67% on higher infrastructure, AI token costs, and severance, and G&A more than doubling to $5.61 billion due to $2.40 billion in legal-related charges.
Source: 10-Q Item 2 MD&A
Capital expenditures, including finance lease principal payments, reached $31.08 billion in the quarter, reflecting a significant acceleration in data center and technical infrastructure investment to support AI initiatives.
Source: 10-Q Item 2 MD&A
Headcount declined 1% year-over-year to 75,472 as of June 30, 2026, but includes approximately 8,000 employees impacted by the May 2026 reduction; most will no longer be reflected in headcount by the end of Q3 2026.
Source: 10-Q Item 2 MD&A
The effective tax rate increased to 16% from 11%, primarily because U.S. tax benefits from foreign-derived deduction eligible income and share-based compensation were limited by the Corporate Alternative Minimum Tax (CAMT) regime.
Source: 10-Q Item 2 MD&A
Compiled by AI from 10-Q Item 1A of this filing · 5 high, 0 medium, 0 low
Meta faces the risk of losing users or engagement to competitors like TikTok and due to factors such as product changes, privacy concerns, or geopolitical events (e.g., the slight DAP decline in Q1 2026 from internet disruptions in Iran and WhatsApp restrictions in Russia). A sustained drop could significantly reduce ad impressions and revenue.
Source: 10-Q Item 1A Risk Factors
Substantially all revenue comes from advertising without long-term commitments. Marketers may cut spending if ad targeting becomes less effective, brand safety concerns arise, or macroeconomic headwinds persist, as seen with past pressure from inflation and geopolitical uncertainty.
Source: 10-Q Item 1A Risk Factors
Changes by Apple (e.g., iOS privacy updates) and other platform providers, along with evolving privacy laws (GDPR, DMA), have limited Meta's ability to use third-party data signals for ad targeting and measurement. The company's 'subscription for no ads' model in the EU faces regulatory challenges, and further restrictions could materially harm advertising revenue.
Source: 10-Q Item 1A Risk Factors
Meta's business relies on interoperability with iOS and Android, and changes by Apple or Google (e.g., cookie deprecation, ad policy changes) can restrict ad delivery, measurement, and the distribution of its apps. Past iOS changes have already negatively impacted ad performance.
Source: 10-Q Item 1A Risk Factors
Governments may block or restrict access to Meta's products (as seen with WhatsApp in Russia) or impose taxes that reduce usage and ad delivery. Such actions can cause abrupt declines in user engagement and advertising revenue in affected regions.
Source: 10-Q Item 1A Risk Factors
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
Meta reported a strong Q1 2026 with revenue surging 33.1% YoY to $56.3B and net income jumping 60.9% to $26.8B, driven by robust advertising demand, though R&D spending soared 45.7% and long-term debt more than doubled as the company aggressively invests in AI and infrastructure.
META reported strong financial performance in Q2 FY2025 with significant growth in revenue and net income, driven by increased operational efficiency and strategic investments.
Meta Platforms delivered record revenue of $201.0B in FY2025, up 22.2% YoY, driven by strong advertising growth and expanding operating leverage, though net income dipped 3.1% to $60.5B as R&D spending surged 30.8% to $57.4B reflecting massive AI and metaverse investments.
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