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Meta shares drop about 6% after Q2 EPS miss and softer guidance
Meta posted Q2 revenue of $60.8 billion, but EPS was $6.18 versus $7.13 expected, with $2.4 billion in legal charges and $1.18 billion in severance weighing on results.
Meta Platforms shares fell roughly 6% in after-hours trading after the company reported Q2 results, delivering an EPS miss and room for investors to question how quickly AI spending will translate into broader opportunities beyond advertising. The stock’s reaction came a week after Alphabet reported, and both companies saw declines after earnings.
Meta said Q2 revenue rose to $60.8 billion, up 28% year over year, beating estimates of $60.22 billion. Ad impressions grew 14% year over year, decelerating from 19% in Q1, while price paid per ad increased 12%.
The EPS miss centered on expenses tied to legal and workforce actions. Meta reported EPS of $6.18, down about 13% year over year and below analyst expectations of $7.13.
MarketBeat Ratings also noted that the company faced $2.40 billion in legal charges and $1.18 billion in severance expenses related to youth-related legal issues and recent layoffs affecting about 8,000 employees. Excluding those items, Meta’s operating income would have been about $22.35 billion, and adjusting for other factors would put EPS closer to about $7.30, while free cash flow was cited at $784 million amid heavy AI spending.