Meta posts 22% advertising revenue growth to $46.6B

Meta Platforms reported second quarter 2025 advertising revenue of $46.6 billion on July 30, representing a 22% increase compared to the same period last year. The social media giant's strong financial performance was driven by significant improvements in its AI-powered advertising systems and enhanced user engagement across Facebook, Instagram, and WhatsApp.

Total revenue reached $47.5 billion for the quarter, exceeding analyst expectations and demonstrating the company's ability to monetize its expanding user base effectively. Family Daily Active People (DAP) reached 3.48 billion in June 2025, marking a 6% year-over-year increase.

"We've had a strong quarter both in terms of our business and community," said Mark Zuckerberg, Meta founder and CEO, during the company's earnings call. "I'm excited to build personal superintelligence for everyone in the world."

AI systems deliver substantial advertising performance improvements

Meta's advertising success stems largely from major enhancements to its artificial intelligence infrastructure. According to Susan Li, Meta's CFO, the company's new AI-powered recommendation model for ads expanded to new surfaces and improved performance significantly during the quarter.

"This quarter, we expanded our new AI-powered recommendation model for ads to new surfaces and improved its performance by using more signals and a longer context. It's driven roughly 5% more ad conversions on Instagram and 3% on Facebook," Zuckerberg explained during the earnings call.

The company's Generative Ads Recommendation System (GEM), which powers the ranking stage of Meta's advertising system, received substantial improvements. Li detailed the technical advances: "In Q2, we improved the performance of GEM by further scaling our training capacity and adding organic and ads engagement data on Instagram. We also incorporated new advanced sequence modeling techniques that helped us double the length of event sequences we use, enabling our systems to consider a longer history of the content or ads that a person has engaged with in order to provide better ad selections."

These improvements translated to meaningful performance gains for advertisers. "The combination of these improvements increased ad conversions by approximately 5% on Instagram and 3% on Facebook Feed and Reels in Q2," Li reported.

Meta's Andromeda model architecture, which handles the ads retrieval stage, also saw significant enhancements. The system "made enhancements to Andromeda that enabled it to select more relevant and more personalized ads candidates, while also expanding coverage to Facebook Reels. These improvements have driven nearly 4% higher conversions on Facebook mobile Feed and Reels," according to Li.

Advertising metrics show strong momentum across key areas

The company's advertising performance was driven by both increased ad impressions and higher pricing. Ad impressions delivered across Meta's Family of Apps increased by 11% year-over-year, while the average price per ad rose by 9%.

Chad Heaton, Meta's VP of Finance, provided context on the revenue growth drivers: "I would say that the revenue growth accelerated across most of our verticals in Q2, so it was pretty broad-based. The online commerce vertical was the largest contributor to year-over-year growth, and then that was followed by professional services and technology."

He noted particularly strong performance in specific verticals: "On professional services, that was very broad-based across advertiser regions and was driven primarily by smaller advertisers, who account for most of the spend in that vertical. And then, on technology, that was actually our fastest growing vertical in Q2, again, very broad-based across advertiser regions and sizes, but seeing particular strength in the US."

Geographic performance showed strength across all regions. Li reported that "on a user geography basis, ad revenue growth was strongest in Europe and Rest of World at 24% and 23%, respectively. North America and Asia-Pacific grew 21% and 18%."

AI creative tools gain widespread adoption

Meta's generative AI features for ad creative reached significant scale during the quarter. "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," Zuckerberg noted.

The adoption of AI-powered creative tools continues expanding among advertisers. Li provided specific metrics: "Nearly 2 million advertisers are now using our video generation features - Image Animation and Video Expansion, and we're seeing strong results with our text generation tools as we continue to add new features."

The company also began testing AI-powered translation capabilities. "In Q2, we started testing AI-powered translations so that advertisers can automatically translate the caption of their ads to 10 different languages. While it's early, we've seen promising performance lifts in our pre-launch tests," Li reported.

Advantage+ campaigns show strong performance

Meta's Advantage+ suite of AI-powered advertising solutions continued gaining traction with advertisers. The company completed its global rollout of streamlined campaign creation flow during the quarter.

Heaton explained the impact: "As we noted, the big update that we had in Q2 was completing the global rollout of our new streamlined campaign creation flow, which has Advantage+ turned on from the beginning for sales and app campaigns. So that automates and optimizes several aspects of the campaign setup process at once."

The results exceeded Meta's expectations. "In terms of the results, we are seeing advertisers adopting Advantage+ sales campaigns at a higher rate in this new experience compared to the previous flow. And frankly, it's been above our expectations," Heaton said.

The performance improvements are translating to business results. "Overall, revenue growth of Advantage+ sales continues to be really strong," Heaton noted, adding that "we expect all advertisers optimizing for sales will benefit from adopting Advantage+ sales campaigns. So there's a lot of runway here for us to grow advertiser adoption sales from -- Advantage+ sales from here."

New advertising surfaces show promise

Meta began introducing advertising to new surfaces within its ecosystem. The company started showing ads within Feed on Threads and the Updates tab on WhatsApp during the quarter.

"As of May, advertisers globally can now run video and image ads to Threads users in most countries, including the United States. While ad supply remains low and Threads is not expected to be a meaningful contributor to overall impression growth in the near-term, we are optimistic about the longer-term opportunity with Threads as the community and engagement grow and monetization scales," Li explained.

For WhatsApp, Meta is taking a gradual approach. "On ads and WhatsApp Status, we are excited to introduce ads in Status to give businesses on WhatsApp more ways to be discovered by customers, to open up a conversation with them. So that global rollout began in Q2 with a limited set of advertisers. And we expect that we are going to take a very gradual approach as we expand availability to more businesses," Li said during the follow-up Q&A call.

However, Meta tempered expectations for WhatsApp advertising revenue. Li noted structural challenges: "The structural constraints that you alluded to are also very much real. The geographic mix really skews towards markets that have lower ad spend per capita, like Southeast Asia, Latin America. So relative to products, like Instagram Stories, the geo mix is more challenging from a monetization perspective."

Business AI initiatives expand globally

Meta's business AI agents showed progress in select markets during the quarter. The company expanded availability of business AIs within message threads to more businesses in Mexico and the Philippines.

Li detailed the development: "Given the traction we've made on sort of product development, we're expanding business AIs to more businesses in Mexico and the Philippines. And we expect to broaden availability later this year as we keep refining the product."

The company is also testing business AIs within advertising contexts. "The second area of business AI development is within ads. So people can ask questions about products, return policies, or get assistance with making a purchase within our in-app browser. We're currently testing this with a small number of businesses across Feed and Reels on Facebook and Instagram as well as Instagram Stories," Li explained during the follow-up call.

Meta reported positive feedback from businesses using the AI agents. "So we're generally seeing good retention with businesses, hearing positive feedback on how AIs are saving businesses time, helping them generate leads, be responsive to customers, offload repetitive tasks from their team like responding to initial inquiries," Li said.

Strong user engagement drives advertising performance

Meta's AI improvements to content recommendation systems resulted in significant engagement increases across its platforms. The company reported substantial gains in time spent on both Facebook and Instagram.

"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," Zuckerberg noted during the earnings call.

Video engagement showed particularly strong momentum. Li reported: "In Q2, Instagram video time was up more than 20% year-over-year globally. We're seeing strong traction on Facebook as well, particularly in the US where video time spent similarly expanded more than 20% year-over-year."

The improvements stem from ongoing optimizations to Meta's ranking systems. "These gains have been enabled by ongoing optimizations to our ranking systems to better identify the most relevant content to show," Li explained.

Capital expenditures reflect AI infrastructure investments

Meta's capital expenditures reached $17.0 billion in the second quarter, driven primarily by investments in servers, data centers, and network infrastructure to support its AI initiatives.

The company provided guidance for continued substantial investments. "We currently expect 2025 capital expenditures, including principal payments on finance leases, to be in the range of $66-72 billion, narrowed from our prior outlook of $64-72 billion and up approximately $30 billion year-over-year at the mid-point," Li said.

Looking ahead to 2026, Meta expects similarly significant investment levels. "While the infrastructure planning process remains highly dynamic, we currently expect another year of similarly significant capital expenditures dollar growth in 2026 as we continue aggressively pursuing opportunities to bring additional capacity online to meet the needs of our artificial intelligence efforts and business operations," Li noted.

Third quarter outlook and regulatory considerations

For the third quarter of 2025, Meta expects total revenue in the range of $47.5-50.5 billion, assuming foreign currency provides approximately a 1% tailwind to year-over-year total revenue growth.

However, the company faces potential regulatory headwinds in Europe that could impact advertising revenue. Li warned: "We continue to engage with the European Commission on our Less Personalized Ads offering, or LPA, which we introduced in November 2024 based on feedback from the European Commission in connection with the DMA. As the Commission provides further feedback on LPA, we cannot rule out that it may seek to impose further modifications to it that would result in a materially worse user and advertiser experience. This could have a significant negative impact on our European revenue, as early as later this quarter."

Long-term AI vision guides investment strategy

Meta's substantial investments in AI infrastructure and talent reflect the company's long-term vision for artificial intelligence integration across its platforms. Zuckerberg outlined the company's ambitious goals during the earnings call.

"Over the last few months we have begun to see glimpses of our AI systems improving themselves. The improvement is slow for now, but undeniable. Developing superintelligence -- which we define as AI that surpasses human intelligence in every way -- we think is now in sight," Zuckerberg said.

The company established Meta Superintelligence Labs to advance its AI research efforts. "To build this future, we've established Meta Superintelligence Labs, which includes our foundations, product, and FAIR teams, as well as a new lab that is focused on developing the next generation of our models," Zuckerberg explained.

Meta's advertising business continues to benefit from AI improvements while the company invests heavily in future capabilities. The second quarter results demonstrate the near-term payoff from AI investments while positioning the company for longer-term transformation of its advertising and user experience capabilities.

Timeline

• July 30, 2025: Meta reports Q2 2025 results with $46.6 billion advertising revenue, 22% year-over-year growth
• Q2 2025: Meta completes global rollout of streamlined Advantage+ campaign creation
• June 2025: Meta announces enhanced AI capabilities at Cannes Lions
• May 2025: Meta introduces Creative breakdown for Flexible formats
• April 30, 2025: Meta reports Q1 earnings with 16% advertising revenue growth
• May 1, 2025: Zuckerberg announces vision to replace creative agencies with AI
• January 29, 2025: Meta reports Q4 2024 advertising revenue of $46.8 billion

Key Terms Explained

1. Artificial Intelligence (AI)

Meta's artificial intelligence systems serve as the foundation for the company's advertising transformation and long-term business strategy. The company's AI infrastructure powers everything from content recommendation algorithms to automated ad creation tools, with Zuckerberg positioning AI development as central to Meta's vision of building "personal superintelligence for everyone." These systems have delivered measurable improvements in advertising performance, including 5% more conversions on Instagram and 3% on Facebook, while supporting the company's broader goal of automating the entire advertising process from creative generation to campaign optimization.

2. Advertising Revenue

Meta's advertising revenue represents the overwhelming majority of the company's income, accounting for $46.6 billion of the $47.5 billion total revenue in Q2 2025. This revenue stream, which grew 22% year-over-year, demonstrates the company's ability to monetize its massive user base through sophisticated targeting and AI-powered optimization. The advertising business spans multiple platforms including Facebook, Instagram, WhatsApp, and Threads, with performance driven by both increased ad impressions (up 11%) and higher average prices per ad (up 9%), reflecting strong advertiser demand and improved ad effectiveness.

3. Advantage+ Campaigns

Advantage+ represents Meta's suite of AI-powered advertising solutions that automate campaign creation and optimization processes. These campaigns have exceeded Meta's expectations in terms of adoption rates, with the company completing a global rollout of streamlined campaign creation flows that turn on Advantage+ by default for sales and app campaigns. The system automates audience selection, ad creative optimization, budget distribution, and placement decisions, delivering strong revenue growth while reducing the manual work required from advertisers to achieve effective campaign performance.

4. Generative AI Features

Meta's generative AI capabilities enable advertisers to create and optimize ad content automatically, with nearly 2 million advertisers now using video generation features like Image Animation and Video Expansion. These tools address a critical need for smaller advertisers who lack extensive creative resources, while also supporting Meta's vision of "infinite creative" where AI systems generate unlimited advertisement variations. The company is testing additional capabilities including AI-powered translation for ad captions across 10 languages, with early tests showing promising performance improvements for international advertising campaigns.

5. Meta AI

Meta AI serves as the company's consumer-facing artificial intelligence assistant, now available in over 200 countries and territories with more than 1 billion monthly active users. The platform primarily operates through WhatsApp for tasks such as information gathering, homework assistance, and image generation, while also integrating into Facebook for content discovery and search functionality. Meta AI represents a key component of the company's five-pillar monetization strategy, positioned to become a leading personal AI assistant that could eventually generate significant revenue through premium features or advertising integration.

6. User Engagement

User engagement metrics demonstrate the effectiveness of Meta's AI-powered content recommendation systems, with time spent increasing 5% on Facebook and 6% on Instagram during Q2 2025. Video engagement showed particularly strong performance, with Instagram video time up more than 20% year-over-year globally and similar growth on Facebook, especially in the United States. These engagement improvements directly translate to advertising value, as higher user engagement creates more opportunities for ad impressions while improving the context and relevance of advertising placements across Meta's platform ecosystem.

7. Family of Apps

Meta's Family of Apps encompasses Facebook, Instagram, Messenger, and WhatsApp, collectively serving 3.48 billion daily active people as of June 2025. This integrated ecosystem allows Meta to offer advertisers unprecedented reach and cross-platform targeting capabilities, while also enabling the company to leverage user data and behavior patterns across multiple touchpoints. The Family of Apps structure supports Meta's advertising business by providing diverse placement opportunities and allowing for sophisticated audience modeling that improves ad targeting and performance measurement across the entire platform network.

8. Business AI

Business AI represents Meta's initiative to provide artificial intelligence agents that help companies automate customer service, lead generation, and sales processes. Currently being tested in Mexico, the Philippines, and select U.S. markets, these AI agents integrate into messaging threads and can be trained using existing business information from websites, social media profiles, and product catalogs. The company reports positive feedback from businesses using these tools, with AI agents helping to save time, generate leads, and handle repetitive customer inquiries while potentially opening new revenue opportunities through premium business services.

9. Capital Expenditures

Meta's capital expenditures of $17.0 billion in Q2 2025 reflect the company's massive investment in AI infrastructure, including servers, data centers, and network equipment necessary to support current operations and future superintelligence development. The company expects 2025 capital expenditures between $66-72 billion, with similar substantial investments planned for 2026 as Meta builds computing clusters like Prometheus (1+ gigawatt capacity) and Hyperion (scaling to 5 gigawatts). These investments represent Meta's commitment to maintaining technological leadership in AI development while supporting the infrastructure requirements of its advertising business and future product initiatives.

10. Superintelligence

Superintelligence represents Meta's long-term vision for developing AI systems that surpass human intelligence across all domains, with Zuckerberg stating that such capabilities are "now in sight." The company established Meta Superintelligence Labs to coordinate research efforts across its foundation models, product development, and FAIR (Facebook AI Research) teams, led by industry veterans including Alexandr Wang and Nat Friedman. This initiative goes beyond improving current advertising and engagement systems to potentially revolutionizing how people interact with technology, create content, and conduct business, positioning Meta as a leader in the most transformative technological development of the coming decades.

Summary

Who: Meta Platforms Inc., led by CEO Mark Zuckerberg and CFO Susan Li, reported second quarter 2025 financial results affecting 3.48 billion daily active users and millions of advertisers globally.

What: Meta achieved $46.6 billion in advertising revenue (22% year-over-year growth) and $47.5 billion total revenue, driven by AI-powered advertising improvements, increased user engagement, and expansion of generative AI creative tools to nearly 2 million advertisers.

When: Results announced July 30, 2025, covering the quarter ended June 30, 2025, with guidance provided for Q3 2025 revenue of $47.5-50.5 billion and capital expenditures continuing at $66-72 billion annually.

Where: Performance was broad-based globally, with strongest advertising revenue growth in Europe (24%) and Rest of World (23%), while AI infrastructure investments focus on data centers supporting superintelligence development and business operations worldwide.

Why: The strong financial performance reflects successful AI integration across Meta's advertising systems, delivering 5% more conversions on Instagram and 3% on Facebook, while positioning the company for long-term transformation toward what Zuckerberg calls "personal superintelligence for everyone."