Actual results may differ materially as a result of various factors, including those set forth in today's earnings press release and in our quarterly report on Form 10-Q filed with the SEC. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our website at investor.atmeta.com. We're also seeing good progress with AI for ad creative, with a meaningful percent of our ad revenue now coming from campaigns using one of our generative AI features.
Advancements in our recommendation systems have improved quality so much that it has led to a 5% increase in time spent on Facebook and 6% on Instagram just this quarter. The percent of people using Meta AI is growing, and we are seeing new users' AI retention increase, too, which is a good sign for that continued use. We launched the Meta Quest 3S Xbox Edition last month, and we're seeing record interest in cloud gaming. Q2 total revenue was $47.5 billion, up 22% on both a reported and constant currency basis.
Marketing and sales increased 9%, primarily due to an increase in professional services related to our ongoing platform integrity efforts, as well as marketing costs partially offset by lower employee compensation. Second quarter operating income was $20.4 billion, representing a 43% operating margin. Our tax rate for the quarter was 11%, which reflects excess tax benefits from share-based compensation due to the increase in our share price versus prior periods. Capital expenditures, including principal payments on finance leases, were $17 billion, driven by investments in servers, data centers, and network infrastructure.
| Metric | Period | Current guidance |
|---|---|---|
| Total expenses growth | FY2026 | Infrastructure expected to be the single largest contributor to expense growth, driven by a sharp acceleration in depreciation; employee compensation the next largest driver (full-year cost of 2025 AI hires); no dollar figure given |
| Capital expenditures | FY2026 | Expected to grow, with the big driver being scaling GenAI training capacity (servers, networking, data centers), plus continued core-AI investment; no dollar figure confirmed by management |
| Data center financing | FY2026 | Expect to self-finance a large share; exploring co-development with financial partners to attract external financing (no finalized transactions) |
| Reality Labs | 2H2025 | Working to ramp Ray-Ban Meta supply to better meet demand later in the year |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +22% | $47.5B; up 22% reported and constant currency, driven by strong ad performance from AI efficiency gains. |
| Family of Apps ad revenue | +21% | $46.6B (+22% constant currency); online commerce the largest contributor; growth strongest in Europe (+24%) and rest of world (+23%), North America +21%, Asia-Pacific +18%. |
| Ad impressions | +11% | Growth mainly driven by Asia-Pacific; engagement tailwinds on Facebook and Instagram plus ad-load optimizations on Facebook. |
| Average price per ad | +9% | Increased advertiser demand from improved ad performance; growth slowed modestly vs Q1 due to accelerated impression growth. |
| Family of Apps other revenue | +50% | $583M; WhatsApp paid-messaging revenue growth and Meta Verified subscriptions. |
| Total expenses | +12% | $27.1B; cost of revenue +16% and R&D +23% (infrastructure and compensation), marketing & sales +9%, partly offset by G&A -27% on lower legal costs. |
| Operating income | $20.4B (43% margin) | Strong ad revenue growth outpacing 12% expense growth. |
| Reality Labs revenue | +5% | $370M; increased AI-glasses sales partly offset by lower Quest sales; expenses $4.9B (+1%); operating loss $4.5B. |
| Net income / EPS | $18.3B / $7.14 | Aided by an 11% tax rate reflecting excess tax benefits from share-based comp on higher share price. |
| Capital expenditures | $17B | Investments in servers, data centers and network infrastructure (incl. finance-lease principal). |
| Free cash flow | $8.5B | Elevated CapEx and $15.1B non-marketable equity investments; repurchased $9.8B stock and paid $1.3B dividends. |
| Headcount | -1% QoQ | Over 75,900 employees; earlier performance-related reductions dropped out, partly offset by hiring in monetization, infrastructure, Reality Labs, AI and compliance. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Superintelligence and Meta Superintelligence Labs | Five AI opportunities framed last quarter (ads, engaging experiences, business messaging, Meta AI, AI devices) | Established MSL (foundations, product, FAIR + new frontier lab led by Alexander Wang, Nat Friedman, Shengjia Zhao); progress on Llama 4.1/4.2 and next-gen models. | — |
| AI infrastructure / compute build-out | Large CapEx ramp | Building multi-gigawatt clusters: Prometheus (~1GW+) online next year, Hyperion scaling up to 5GW, plus multiple Titan clusters; front-loading compute. | — |
| AI-powered advertising | Andromeda retrieval architecture introduced 2H2024 | New recommendation model expanded to new surfaces; ~5% more conversions on Instagram, 3% on Facebook; meaningful share of ad revenue from GenAI creative features. | — |
| Engagement and video | Recommendation-driven engagement growth | Time spent +5% Facebook, +6% Instagram this quarter; Instagram video time +20% YoY; over 2/3 of US Instagram recommended content now original posts. | — |
| Meta AI | Reach growing | More than 1 billion monthly actives; largest query driver is WhatsApp; expanding into content discovery and translation/dubbing. | — |
| New surface monetization (Threads, WhatsApp) | Pre-monetization | Ads introduced in Threads feed and WhatsApp Updates tab; low ad supply near-term, not a meaningful revenue contributor for the next few years. | — |
| AI glasses / Reality Labs | Ray-Ban Meta momentum | Sales accelerating with demand outstripping supply; Oakley Meta HSTN launched; more to share at Connect on Sept 17. | — |