Meta Platforms (NASDAQ:META) Releases Earnings Results, Misses Estimates By $1.01 EPS

Meta Platforms (NASDAQ:META) announced its earnings results on Wednesday. The social networking company reported $6.18 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $7.19 by ($1.01), FiscalAI reports. The company had revenue of $60.80 billion for the quarter, compared to analyst estimates of $60.22 billion. Meta Platforms had a return on equity of 34.81% and a net margin of 29.83%.The firm’s revenue for the quarter was up 28.0% on a year-over-year basis. During the same period last year, the firm earned $7.14 earnings per share.

Here are the key takeaways from Meta Platforms’ conference call:

• Strong Q2 revenue and advertising growth: Meta reported $60.8 billion in total revenue, up 28% year over year, while Family of Apps ad revenue rose 27%. Ad impressions increased 14% and average ad prices rose 12%, supported by stronger engagement and AI-driven performance improvements.
• AI is improving core products and advertiser results: Meta cited gains from LLM-powered recommendations, including a 15.7% increase in Facebook ad conversions and continued growth in Instagram engagement. More than nine million small businesses now use at least one AI creative tool, while Advantage+ products surpassed a $75 billion annual revenue run rate.
• New AI monetization opportunities are expanding: Meta is developing personal agents, business agents, model APIs, subscriptions, productivity tools, and direct compute sales. More than one million businesses use Meta Business Agents weekly, and the company said it is receiving offers to sell compute at a significant premium.
• AI infrastructure spending is sharply pressuring profitability and cash flow: Q2 expenses rose 55% to $42 billion, including legal and severance charges, while operating income declined 8% and free cash flow was only $784 million. Meta raised its 2026 capital expenditure outlook to $130 billion–$145 billion as it accelerates data-center, server, and network investments.
• Legal and regulatory risks remain material: Meta recorded $2.4 billion in Q2 legal charges and warned that upcoming youth-related trials in the U.S. could ultimately result in a material loss. Management also expects Q3 revenue of $61 billion–$64 billion, implying a more moderate growth rate than Q2.

Meta Platforms Trading Up 2.0%

Shares of Meta Platforms stock traded up $10.88 during trading on Friday, hitting $549.91. 8,544,676 shares of the company were exchanged, compared to its average volume of 16,825,572. The company has a debt-to-equity ratio of 0.24, a current ratio of 2.35 and a quick ratio of 2.35. The firm has a market capitalization of $1.39 trillion, a P/E ratio of 20.77, a price-to-earnings-growth ratio of 0.98 and a beta of 1.25. The firm’s fifty day moving average price is $602.23 and its 200 day moving average price is $623.44. Meta Platforms has a 1-year low of $520.26 and a 1-year high of $796.25.

Meta Platforms Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Monday, June 15th were paid a dividend of $0.525 per share. The ex-dividend date of this dividend was Monday, June 15th. This represents a $2.10 dividend on an annualized basis and a dividend yield of 0.4%. Meta Platforms’s payout ratio is 7.63%.

Analyst Ratings Changes

Several analysts have issued reports on META shares. Bank of America cut their target price on shares of Meta Platforms from $835.00 to $810.00 and set a “buy” rating on the stock in a research note on Thursday. Robert W. Baird lowered their price objective on shares of Meta Platforms from $830.00 to $750.00 and set an “outperform” rating on the stock in a research report on Thursday. Scotiabank restated a “sector perform” rating and set a $600.00 price target on shares of Meta Platforms in a report on Thursday. Citigroup cut their price objective on Meta Platforms from $850.00 to $800.00 and set a “buy” rating for the company in a report on Thursday. Finally, Monness Crespi & Hardt decreased their target price on Meta Platforms from $890.00 to $730.00 and set a “buy” rating for the company in a research report on Thursday. Three research analysts have rated the stock with a Strong Buy rating, thirty-six have assigned a Buy rating and eight have issued a Hold rating to the stock. According to MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $789.95.

Insider Activity

In other news, CTO Andrew Bosworth sold 7,847 shares of the business’s stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $607.83, for a total value of $4,769,642.01. Following the sale, the chief technology officer directly owned 414 shares in the company, valued at $251,641.62. The trade was a 94.99% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, COO Javier Olivan sold 3,348 shares of the business’s stock in a transaction on Monday, July 6th. The stock was sold at an average price of $600.97, for a total transaction of $2,012,047.56. Following the completion of the sale, the chief operating officer directly owned 9,498 shares in the company, valued at approximately $5,708,013.06. This represents a 26.06% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 39,325 shares of company stock worth $23,979,087 in the last ninety days. Company insiders own 13.53% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the company. State Street Corp raised its stake in Meta Platforms by 5.1% in the 4th quarter. State Street Corp now owns 90,841,345 shares of the social networking company’s stock valued at $59,963,463,000 after acquiring an additional 4,395,763 shares during the period. Amundi grew its stake in Meta Platforms by 56.2% in the 4th quarter. Amundi now owns 10,043,955 shares of the social networking company’s stock valued at $6,629,913,000 after buying an additional 3,613,211 shares during the last quarter. Bank of New York Mellon Corp boosted its holdings in shares of Meta Platforms by 9.2% during the fourth quarter. Bank of New York Mellon Corp now owns 14,874,837 shares of the social networking company’s stock worth $9,818,731,000 after acquiring an additional 1,255,496 shares during the period. Capital International Investors grew its position in shares of Meta Platforms by 5.0% in the fourth quarter. Capital International Investors now owns 25,713,823 shares of the social networking company’s stock valued at $16,974,515,000 after purchasing an additional 1,224,462 shares during the last quarter. Finally, Charles Schwab Investment Management Inc. lifted its holdings in Meta Platforms by 7.8% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 15,559,200 shares of the social networking company’s stock worth $10,270,478,000 after purchasing an additional 1,125,021 shares during the last quarter. 79.91% of the stock is currently owned by institutional investors and hedge funds.

Trending Headlines about Meta Platforms

Here are the key news stories impacting Meta Platforms this week:

• Positive Sentiment: Meta’s second-quarter revenue rose 28% year over year to $60.8 billion, exceeding expectations, as advertising demand, engagement and AI-powered recommendations supported growth. Instagram time spent also increased by double digits. META’s Q2 Earnings Miss Estimates, Revenues Rise Y/Y on Ad Growth
• Positive Sentiment: Several analysts maintained bullish ratings despite reducing their targets. Baird set a $750 target, UBS set $715, and Rosenblatt set $883, implying substantial long-term upside from current levels. An analyst also raised Meta’s FY2027 EPS forecast. Meta Given New $750 Price Target at Robert W. Baird
• Positive Sentiment: Meta is expanding AI applications across advertising, recommendations, business agents and personalized responses. WhatsApp also reported record message volume during the World Cup final, highlighting the strength of Meta’s platform ecosystem. Meta says AI is making it easier to build new apps
• Neutral Sentiment: Meta’s narrowed annual capital-expenditure forecast provides somewhat more certainty, but expected AI spending remains exceptionally high. Management is weighing whether to retain computing capacity for its own models or lease excess capacity to third parties. Meta narrows annual capex forecast, as AI buildout grows
• Negative Sentiment: Second-quarter EPS was $6.18, well below the roughly $7.19 consensus and down from $7.14 a year earlier. Legal and severance charges contributed to the miss, but investors are also concerned that operating expenses are rising faster than revenue. Meta misses profit expectations, sticks to massive AI spending
• Negative Sentiment: Capital spending is consuming nearly all operating cash flow: Meta generated $31.9 billion in operating cash flow but retained only $784 million after capital expenditures. Future AI data-center lease obligations reportedly reached $279 billion, increasing concerns about cash generation and capital allocation. Meta’s future AI data center lease obligations swell
• Negative Sentiment: Third-quarter revenue guidance of $61 billion to $64 billion was viewed as soft relative to expectations, while investors remain unconvinced that Meta has clearly demonstrated an AI monetization timeline. Analysts including UBS, Mizuho, Cantor Fitzgerald and DA Davidson lowered price targets. Why Meta Platforms Is Down After AI Costs Squeeze Q2 Profitability
• Negative Sentiment: Indian police registered a case naming Meta India’s head over Facebook posts depicting Prime Minister Narendra Modi abusively, adding a legal and regulatory overhang in a major market. India police register case against Meta India head

About Meta Platforms

Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.