Facebook parent Meta (META) reported its second quarter earnings on Wednesday, outperforming expectations and offering a better than expected outlook for Q3. The company says it anticipated between $47.5 billion and $50.5 billion in third quarter revenue, well ahead of the $46.2 billion Wall Street was calling for.
Meta stock jumped more than 8% immediately following the announcement.
For Q2, Meta saw earnings per share (EPS) of $7.14 on revenue of $47.5 billion. Analysts were anticipating EPS of $5.89 on revenue of $44.83 billion, according to Bloomberg consensus estimates. The company saw EPS of $5.16 and revenue of $39.07 billion in the same period last year.
Advertising revenue came in at $46.5 billion compared to an expected $44.07 billion. The company’s Reality Labs segment saw a loss of $4.5 billion versus expectations of $4.8 billion.
The earnings announcement comes amid Meta’s AI spending and hiring spree.
Last week, CEO Mark Zuckerberg announced former OpenAI (OPAI.PVT) researcher Shengjia Zhao, who helped develop the company’s ChatGPT model, has been named founder and chief scientist of Meta’s Superintelligence Lab.
Prior to Zhao, Meta invested $14.3 billion in Scale AI (SCAI.PVT) and hired its CEO, Alexandr Wang. The company also hired former GitHub CEO Nat Friedman and Safe Superintelligence CEO Daniel Gross. Zuckerberg also poached Apple’s (AAPL) head of AI foundation models, Ruoming Pang, according to Bloomberg.
Meta is also spending on AI data centers, with Zuckerberg saying last week that the company is investing hundreds of billions of dollars to build several multi-gigawatt data centers around the country. One such facility, called Hyperion, will eventually scale up to support up to 5 gigawatts, or 5 billion watts, of capacity.
CFO Susan Li addressed the spending in the earnings release saying that the company expected to increase its expenditures in the year ahead.
“The largest single driver of growth will be infrastructure costs, driven by a sharp acceleration in depreciation expense growth and higher operating costs as we continue to scale up our infrastructure fleet,” Li wrote.
“Aside from infrastructure, we expect the second largest driver of growth to be employee compensation as we add technical talent in priority areas and recognize a full year of compensation expenses for employees hired throughout 2025. We expect these factors will result in a 2026 year-over-year expense growth rate that is above the 2025 expense growth rate.”
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