Meta Platforms, Inc. (Nasdaq: META) on July 29 reported second quarter 2026 revenue of $60.8 billion, up 28% from a year earlier, while net income fell 14% to $15.85 billion for the quarter ended June 30, 2026.
The gap between rising revenue and falling profit reflected a 55% increase in costs and expenses, which reached $42.03 billion. Meta ranks among the largest digital advertising companies alongside Alphabet's Google, and derives nearly all of its revenue from advertising across Facebook, Instagram, WhatsApp, and Messenger.
#Revenue Rises 28% as Ad Prices and Volumes Increase
Advertising revenue rose to $59.36 billion in the quarter, up from $46.56 billion a year earlier. On a constant currency basis, revenue would have increased 27% year over year, according to the company.
Ad impressions delivered across Meta's Family of Apps increased 14% year over year, while the average price per ad increased 12%.
Family daily active people averaged 3.60 billion in June 2026, an increase of 3% from a year earlier.
The Family of Apps segment, which includes Facebook, Instagram, Messenger, and WhatsApp, generated operating income of $23.39 billion, down from $24.97 billion. Reality Labs, which houses Meta's virtual and augmented reality hardware and software, posted an operating loss of $4.62 billion on revenue of $431 million.
#Costs Climb 55% on Legal Charges and Severance
Total costs and expenses rose to $42.03 billion, an increase of 55% year over year. The figure included $2.4 billion of charges related to legal proceedings and $1.18 billion of severance expenses tied to the May 2026 headcount reduction.
Income from operations fell 8% to $18.78 billion, and operating margin narrowed to 31% from 43% a year earlier.
Diluted earnings per share were $6.18, down from $7.14 a year earlier. The effective tax rate rose to 16% from 11%, and the provision for income taxes increased 32% to $2.91 billion.
For the first six months of 2026, revenue reached $117.11 billion and net income was $42.62 billion, up from $34.98 billion a year earlier. The half-year net income benefited from an $8.03 billion discrete income tax benefit recognized in the first quarter of 2026, primarily related to changes in the company's indefinite reinvestment assertion.
"AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities," Mark Zuckerberg, Meta founder and CEO, said in the earnings release. "The results are already showing, and I'm optimistic about the potential ahead."
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#Free Cash Flow Falls to $784 Million as Capital Spending Rises
Free cash flow declined to $784 million, down from $8.55 billion a year earlier. Capital expenditures, including principal payments on finance leases, were $31.08 billion in the quarter.
Cash flow from operating activities was $31.86 billion. Meta held $90.26 billion in cash, cash equivalents, and marketable securities and $83.66 billion in long-term debt as of June 30, 2026. Dividend and dividend equivalent payments totaled $1.35 billion.
Headcount stood at 75,472 as of June 30, 2026, a decrease of 1% year over year. The company said its reported headcount included about 8,000 employees affected by the May 2026 reduction, most of whom will no longer appear in its headcount by the end of the third quarter.
For the third quarter, Meta guided to revenue of $61 billion to $64 billion, and said it expects full year operating income to exceed the 2025 level. It raised the lower end of its full year expense outlook to $165 billion to $169 billion to reflect the legal charges.
The company said it continues to monitor legal and regulatory matters that could significantly affect its results. It cited scrutiny of youth-related issues in several markets and youth-related trials scheduled in the United States this year that it said may result in a material loss.
Meta reiterated an expected 2026 capital expenditure range of $130 billion to $145 billion, narrowed from its prior outlook. Continued AI-related spending, legal exposure, and margin pressure remain key risks to that outlook.