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Meta says AI investments are boosting ad revenue growth
In Q2, Meta reported ad revenue up 27% year over year to $59.4 billion, while total revenue rose 28% to $60.8 billion for the period ended June 30.
Meta reported strong advertising revenue growth in Q2, with the Facebook and Instagram parent highlighting that its artificial intelligence initiatives are improving campaign performance. According to an earnings statement cited by Yahoo Finance, Meta’s advertising revenue rose 27% year over year to $59.4 billion, and total revenue increased 28% to $60.8 billion for the three months ended June 30.
Even with revenue above expectations, earnings came in under Wall Street’s targets, and shares fell after the results. The company also issued a Q3 forecast that investors found less reassuring, calling for revenue in the range of $61.0 billion to $64.0 billion.
Meta CFO Susan Li said the company is “lapping” a prior period of strong ad impressions growth in Q3, and warned that policy changes in Europe could create additional headwinds by allowing less personalized ads. Executives tried to address those concerns by emphasizing Meta’s scale in digital advertising and arguing that AI is improving monetization efficiency.
Meta CEO Mark Zuckerberg said on the analyst call that, on a dollar basis, Meta’s ads business is showing faster year over year revenue growth than any other company’s reported ad business, as AI investments begin to pay off. Meta also pointed to Advantage+, its AI-powered ad products suite, reaching a $75.0 billion annual revenue run rate in Q2, and to the Meta Generative Recommender, designed to pair large language models with user preferences to predict the best ad for each person, according to Li.