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Meta shares plunge after Q2 earnings miss driven by higher costs
Meta reported record Q2 revenue of $60.8 billion, up 28% year over year, but costs and expenses rose 55% to $42.0 billion as legal charges and severance weighed on profits.
Meta Platforms shares fell nearly 8% after the company missed Wall Street earnings expectations for the second quarter, with investors reacting to weakening profitability despite strong top-line growth, according to Yahoo Finance.
Meta delivered record revenue of $60.8 billion, up 28% year over year and slightly above estimates, while earnings per share dropped 13% year over year to $6.18. The earnings miss came as total costs and expenses jumped 55% to $42.0 billion, including $2.4 billion tied to legal proceedings and $1.18 billion related to severance costs.
Meta said operating margin fell to 31% from 43% a year earlier, and net income decreased 14% year over year to $15.85 billion. The company also reported that free cash flow was a major shock, after costs rose sharply.
Beyond the quarter, Yahoo Finance noted that Meta is guiding 2026 capital expenditures of $130 billion to $145 billion, up from its prior range of $125 billion to $145 billion. The stock has also fallen more than 15% year to date, as investors weigh aggressive AI spending against the potential returns.