Meta reported after market on Wednesday, and delivered solid second-quarter revenue growth, with sales up 28% to US$60.8 billion and advertising revenue rising 27%. However, shares fell around ~9% overnight after third-quarter guidance disappointed and management lifted the low end of both capex and expense forecasts.
Key results:
- Revenue of US$60.8 billion, up 28%.
- Operating income fell 8% to US$18.8 billion.
- Operating margin declined to 31% from 43%.
- EPS fell to US$6.18.
Third-quarter revenue guidance of US$61–64 billion was slightly underwhelming, while FY26 capital expenditure is now expected at US$130–145 billion and total expenses at US$165–169 billion.
Their underlying advertising engine remains strong, but we’re not yet seeing evidence that Meta’s enormous AI spend will translate into better growth and cash flow. Until that becomes more visible, the stock is likely to remain highly sensitive to changes in capex guidance.
MM is cautiously bullish META US ~$US540
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