MENLO PARK – The number that mattered most to Meta Platforms investors on Wednesday was not $60.8 billion. That was the revenue figure, a record, up 28 percent from a year earlier and comfortably above the $60.22 billion analysts had forecast. The number that mattered was $6.18, the earnings per share that landed nearly a dollar below the $7.19 Wall Street expected. In the minutes after results were published, Meta (NASDAQ: META) fell $24.76, or 4.2 percent, to $560.85 in after-hours trading.
Net income for the second quarter was $15.85 billion, down 14 percent from $18.34 billion a year earlier, per the company’s disclosure filed with the Securities and Exchange Commission Wednesday evening. Two extraordinary charges accounted for the miss. Meta took a $2.4 billion provision for legal proceedings and booked $1.18 billion in severance expenses as headcount reductions continued across non-technical functions. Total expenses for the quarter reached $42.03 billion, a 55 percent increase year-over-year.
The company identified no specific legal case in its initial release, providing only the dollar figure and a classification. Privacy litigation, antitrust proceedings, and state-level investigations into Instagram’s alleged effects on younger users have all been active against Meta in recent months. Whether the charge represents a settlement, a reserve for future claims, or a write-down against a specific judgment will likely become clearer in the weeks following the earnings call. For now, $2.4 billion is a number without a named defendant.
The severance line told a parallel story. Meta has spent the better part of 2026 hiring aggressively in engineering and artificial intelligence while trimming management and administrative layers. Chief Executive Mark Zuckerberg declared a Year of Efficiency in late 2022 after a prior period of revenue misses. The severance costs in Wednesday’s filing suggest that process has not concluded, even as the company’s advertising business sets quarterly records.
Meta’s capital expenditure guidance for the full year remains at $145 billion, a commitment without precedent among American corporations. The figure has divided investors since it was first disclosed earlier this year. The company announced last week a data center campus in El Paso, Texas, to be financed and operated with BlackRock as part of a broader infrastructure program. Meta’s compute cloud plans, reported earlier this month, also include selling excess AI capacity to enterprise customers, an attempt to convert sunk infrastructure costs into a new revenue line.
Advertising, the engine that finances all of it, continued to perform. Daily active people across Meta’s family of apps, which includes Facebook, Instagram, WhatsApp, and Threads, reached 3.6 billion for the quarter, up 3 percent year-over-year. Per-user monetization has risen consistently as AI-driven targeting tools improve the relevance of advertisements. The $60.8 billion quarterly revenue figure is the highest in the company’s history.
For the third quarter, Meta guided revenue between $61 billion and $64 billion. The midpoint, $62.5 billion, fell short of the $63.14 billion analysts had projected. Operating expenses for the quarter were guided between $42 billion and $45 billion. Both figures, read together, suggest that margins are unlikely to improve materially before the end of September.
Wednesday’s results arrived against a deteriorating market backdrop. The Nasdaq 100 neared correction territory Tuesday as chipmakers and AI infrastructure stocks fell for a fourth consecutive session, partly on the same concern now overhanging Meta: whether the industry’s collective AI capital spending can generate returns on a timeline that satisfies investors who bought in at elevated multiples.
Meta’s position in that debate is unusual. Its advertising business has demonstrated, quarter after quarter, that it can produce top-line growth in nearly any macroeconomic condition. A 28 percent revenue gain in a quarter when the Federal Reserve held rates unchanged and the United States was engaged in military operations in the Middle East suggests the ad engine is more durable than its critics have argued.
What the company cannot yet demonstrate is that $145 billion in capital spending will generate returns on a timeline investors find acceptable. The bulls on Meta argue that dominance in AI infrastructure now is worth accepting margin compression for several more quarters. The bears argue that the company has not shown what specific commercial advantage $145 billion in compute buys, only that it is committed to spending it.
Wednesday’s report did not resolve the question. Revenue of $60.8 billion was, by any measure, the performance of a company in excellent commercial health. Earnings per share of $6.18, against expectations of $7.19, was the performance of a company carrying costs that its stated strategy requires and that its investors have not fully priced in. Instagram, the platform that accounts for the majority of Meta’s advertising revenue, has also faced reliability questions this month. The stock’s reaction, a 4.2 percent drop on a record revenue quarter, reflected an investor class watching both numbers at once.
