Latest quarter
Meta reported Q2 FY2026 revenue of $60.8 billion, up 28.0% from $47.5 billion a year earlier. Against the consensus, Meta’s revenue was 0.98% higher than the $60.2 billion estimate, while adjusted EPS of $6.18 was 13.0% below the $7.10 consensus estimate. The company said Q2 revenue came within its $58.0 billion–$61.0 billion guidance range.
Meta reported diluted EPS of $6.18, down 13.4% from $7.14, and net income of $15.8 billion, compared with $18.3 billion a year earlier. The filing said advertising revenue increased as ad impressions across the Family of Apps rose 14% and average price per ad rose 12%. Meta’s filing also said Family of Apps other revenue increased 73%, primarily from WhatsApp paid messaging and subscriptions, while Reality Labs revenue increased 16% on higher AI-glasses sales, partly offset by lower Quest sales.
The company reported an 81.4% gross margin and a 30.9% operating margin, compared with 82.1% and 43.0%, respectively, a year earlier. Meta said higher costs included employee compensation, infrastructure, legal-related costs and third-party AI token costs. Susan Li reported $31.1 billion of capital expenditures and $784 million of free cash flow for the quarter.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $60.8 billion | $47.5 billion | 28.0% |
| Diluted EPS | $6.18 | $7.14 | −13.4% |
| Gross margin | 81.4% | 82.1% | −0.8 percentage points |
| Operating margin | 30.9% | 43.0% | −12.1 percentage points |
| Free cash flow | $1.7 billion | $9.0 billion | −80.6% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $6.18 | $7.10 | Missed by 13.0% |
| Revenue | $60.8 billion | $60.2 billion | Beat by 0.98% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
| Against its own guidance | For | Guided | Reported | Result |
|---|---|---|---|---|
| Revenue | Q2 FY2026 | $58.0 billion–$61.0 billion | $60.8 billion | Within the guide |
Revenue came in within or above the company’s guide in 7 of the last 7 quarters it guided.
What management said on the call
Mark Zuckerberg said Meta’s AI work was improving the relevance of content recommendations and advertising, and he said the company was developing personal agents, APIs and business agents as additional product and revenue lines. He said more than 1 million businesses were using Meta business agents weekly on WhatsApp and Messenger, and that Meta was rolling the offering out on Instagram.
Susan Li said Family of Apps advertising revenue increased 27% in Q2, with the 14% increase in ad impressions supported by engagement, user growth and ad-load optimization. Li said the 12% increase in average price per ad reflected ad-performance gains, improved macroeconomic conditions relative to the prior-year quarter and currency tailwinds, partly offset by impression growth in lower-monetizing surfaces and regions. She said Meta’s recommendations work was intended to increase engagement on Facebook and Instagram, while advertising systems were being developed to improve performance for businesses.
Li said Q2 total expenses were $42 billion, up 55% from a year earlier, including $2.4 billion of legal-proceeding charges and $1.2 billion of severance expenses related to the May 2026 headcount reduction. She said capital expenditures, including finance-lease principal payments, were $31.1 billion for servers, data centers and network infrastructure. Li said the company’s capacity plans were geared toward maximizing 2026 and 2027 capacity, and that longer-term data-center and network investments were intended to retain flexibility over future server decisions.
In the Q&A, an analyst asked about 2027 capital expenditures. Li said Meta was not providing a specific 2027 capital-expenditure outlook because infrastructure planning remained dynamic and the company was still assessing capacity needs. Zuckerberg said Meta was weighing external demand for compute against internal uses, including improving its core services and developing new products, rather than treating compute sales as the only use of its capacity. Li also said the company expected further opportunity to improve recommendations through 2026 and into 2027.
Guidance
Meta raised the lower end of its FY2026 total-expense outlook to $165.0 billion–$169.0 billion from $162.0 billion–$169.0 billion, incorporating the Q2 legal-proceeding charge. The company narrowed its FY2026 capital-expenditure outlook, including principal payments on finance leases, to $130.0 billion–$145.0 billion from $125.0 billion–$145.0 billion. Meta expects Q3 FY2026 revenue of $61.0 billion–$64.0 billion and said foreign currency is expected to be an approximately 1.00% headwind to year-over-year revenue growth. The company said it expects a 15%–17% tax rate for the remaining quarters of 2026, absent changes to its tax landscape.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Capex, Including principal payments on finance leases | FY2026 | $130.0 billion–$145.0 billion | $125.0 billion–$145.0 billion | Raised |
| Operating income | FY2026 | Meta expects 2026 operating income to exceed 2025 operating income. | Meta expects 2026 operating income to be above 2025 operating income. | — |
| Operating expenses | FY2026 | $165.0 billion–$169.0 billion | $162.0 billion–$169.0 billion | Raised |
| Revenue | Q3 FY2026 | $61.0 billion–$64.0 billion | Q2 FY2026: $58.0 billion–$61.0 billion; reported $60.8 billion | Raised |
| Headcount, Employees impacted by may 2026 headcount reduction | Q3 FY2026 | Meta Platforms expects the majority of employees affected by the May 2026 headcount reduction to no longer be included in headcount by Q3 FY2026 end. | — | — |
| Tax rate | Q4 FY2026 | 13.0%–16.0% | Q3 FY2026: 13.0%–16.0% | Held |
| Tax rate | Q3 FY2026 | 13.0%–16.0% | Q2 FY2026: 13.0%–16.0% | Held |
| Operating expenses | FY2026 | Meta expects total expenses to grow at a significantly faster percentage rate in 2026 than in 2025. | — | — |
| Capex | FY2026 | Meta expects capital expenditures dollar growth to be notably larger in 2026 than in 2025. | — | — |
| Revenue | FY2026 | Meta expects strong revenue growth in 2026. | — | — |
How analysts reacted
Analysts’ price targets: $580.00 to $1,050.00, $830.00 on average (as of 18 October 2026).
Rating and price-target actions since the results on 29 July 2026:
| Firm | Date | Action | Rating | Target |
|---|---|---|---|---|
| Morgan Stanley | 19 October 2026 | target raise | outperform → outperform | $775.00 → $820.00 |
| Goldman Sachs | 14 October 2026 | target cut | — | $860.00 → $762.00 |
| UBS | 14 October 2026 | target raise | — | $715.00 → $884.00 |
| Guggenheim | 14 October 2026 | target raise | — | $700.00 → $850.00 |
| Truist | 13 October 2026 | target raise | — | $763.00 → $1,000.00 |
| Truist Securities | 13 October 2026 | target raise | buy | $1,000.00 |
| Pivotal Research | 13 October 2026 | target raise | buy | $790.00 → $930.00 |
| Wells Fargo | 12 October 2026 | target raise | — | $1,000.00 |
| JPMorgan | 8 October 2026 | upgrade | hold → outperform | — |
| BMO Capital | 6 October 2026 | reiterate | hold → hold | $580.00 → $580.00 |