Meta Platforms reported second-quarter 2026 advertising revenue of $59.36 billion today, a 27% increase from a year earlier, even as net income fell 8% to $15.8 billion after the company absorbed a $2.4 billion charge tied to legal proceedings and $1.18 billion in severance costs.

The results, disclosed in a press release dated July 29, 2026, cover the three months ended June 30, 2026. Total company revenue reached $60.80 billion, up 28% year over year, with Meta's advertising business accounting for the overwhelming share of that figure. Diluted earnings per share came in at $6.18, down 13% from $7.14 in the same quarter last year, according to the earnings release filed with the U.S. Securities and Exchange Commission.

Operating margin, a measure that had held between 40% and 48% for eight consecutive quarters, dropped sharply to 31%. Total costs and expenses rose 55% to $42.03 billion, a jump the company attributed primarily to the legal charge, the severance payments connected to a headcount reduction announced in May 2026, and continued growth in infrastructure and employee compensation spending tied to artificial intelligence hiring.

"AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities," said Mark Zuckerberg, Meta founder and chief executive, in the earnings release. "The results are already showing, and I'm optimistic about the potential ahead."

Advertising revenue and the mechanics behind it

Meta's advertising business generated $59.36 billion in the quarter, up from $46.56 billion a year earlier. That growth split into two familiar components: ad impressions delivered across the Family of Apps rose 14% year over year, while the average price per ad increased 12%. On a constant currency basis, total revenue growth was 27%, one point below the reported figure, reflecting a modest foreign exchange headwind.

Family daily active people, Meta's measure of unique users across Facebook, Instagram, Messenger, and WhatsApp, averaged 3.60 billion for June 2026, an increase of 3% year over year. That growth rate has been essentially flat since the fourth quarter of 2025, when the figure stood at 3.58 billion, and Meta noted in its earnings presentation that a first-quarter 2026 dip to 3.56 billion was driven by internet disruptions in Iran and a restriction on WhatsApp access in Russia. Average revenue per person for the Family of Apps segment reached $16.86 in the quarter, continuing a steady climb from $11.89 two years earlier.

Regional breakdowns in the earnings presentation showed US and Canada advertising revenue at $26.34 billion, Europe at $10.85 billion, Asia-Pacific at $14.09 billion, and the rest of the world contributing $8.09 billion. Ad impression growth varied substantially by region: Asia-Pacific impressions rose 17% year over year, compared with 9% in the US and Canada and 13% in Europe. Average price per ad told a different story by geography, climbing 20% in the US and Canada but only 1% in Asia-Pacific, a pattern that suggests the two regions are monetizing new impression volume very differently.

Susan Li, Meta's chief financial officer, described the underlying mechanics during the earnings call. "In Q2, the total number of ad impressions served across our services increased 14%," Li said, according to the earnings call transcript. "Impression growth was healthy across all regions, driven by growth in engagement and users, as well as ad load optimizations. The global average price per ad increased 12% year-over-year, driven by ad performance gains, improvements in macro conditions relative to Q2 of last year, and currency tailwinds. This was partially offset by strong impression growth, particularly from lower-monetizing surfaces and regions."

The Meta Generative Recommender and other ranking changes

Meta introduced what it called a structural change to its advertising delivery system during the quarter, a system the company named the Meta Generative Recommender. "This quarter, we introduced Meta Generative Recommender, a paradigm shift in how our ads system works," Li said on the call. "Rather than scoring every possible ad individually, we are now using LLMs to reason about ad content and user preferences together, and predict the best ad for each person."

The company reported measurable performance figures tied to specific components of that system. "We deployed the first generative model into our ads retrieval system and saw notable improvements in ad performance," Li said. "Early pilots using LLMs to better understand user preferences drove a 1% increase in app event conversions on Instagram." Separately, Li said Meta's advancements to its user understanding models, combined with what she described as the GEM model for ads ranking and sequence learning, "generated an 8.3% increase in ad clicks and a 15.7% uplift in conversions on Facebook."

Those figures build on a model architecture PPC Land has tracked through several quarters of disclosure. The GEM model doubled its GPU cluster size for training in the fourth quarter of 2025 and adopted a new sequence learning architecture that delivered a 3.5% lift in ad clicks on Facebook at that time, figures that give the 8.3% click increase disclosed this quarter a point of comparison. Meta's Adaptive Ranking Model, the LLM-scale recommender used at the point of ad delivery, had separately expanded to cover offsite conversions in the first quarter of 2026, driving a 1.6% lift in conversion rates at that stage.

Advantage+ adoption and creative tools

Meta's automated Advantage+ campaign suite, which bundles audience, placement, and budget optimization into a single AI-managed workflow, reached an annual revenue run-rate exceeding $75 billion in the quarter, according to Li. That figure represents continued growth from the $60 billion run-rate the company disclosed in its third-quarter 2025 results and reflects deepening adoption among advertisers who use multiple tools within the suite simultaneously.

Li offered a specific case during the call to illustrate the performance gap. "Underneat, an online apparel brand in India, had been setting up each campaign manually across Facebook and Instagram," she said. "After adopting Advantage+ sales campaigns layered with Advantage+ Audience, Placements, and Budget optimization, they saw a 13% incremental lift in purchases and a 16% increase in add-to-cart conversions."

Adoption of Meta's generative AI ad creative tools continued to widen. More than 9 million small businesses on Meta's platforms are now using at least one AI ad creative tool, up from the 8 million figure the company reported for the first quarter of 2026, which itself had doubled from 4 million roughly four months earlier. Li said adoption of Meta's image generation tool, which now allows advertisers to create images from video assets, more than doubled in the second quarter alone.

Zuckerberg connected that creative tooling directly to the company's newer Muse family of models during his remarks. "We are also seeing a lot of demand for our new AI-powered creative tools," Zuckerberg said. "9 million small businesses on our platforms are now using at least one of our AI ad creative tools, and we're rolling out new end-to-end creative solutions that help advertisers translate performance data into their creative decisions. Muse Image is going to supercharge this. The model can analyze images, improve its own work, and produce better ad variations based on advertiser input."

Meta also disclosed a company-wide comparative claim about advertising performance growth. Zuckerberg said, "On a dollar basis, our ads business is reporting faster year-over-year revenue growth than any other company's reported ad business."

Business Agent Platform expands to enterprises

Meta's Business Agent, an AI system that handles customer conversations on behalf of companies across WhatsApp, Messenger, and now Instagram, moved from a global consumer rollout to an enterprise-facing platform during the quarter. Zuckerberg said more than 1 million businesses are now using Business Agents weekly to communicate with customers or complete sales, a figure disclosed for the first time this quarter following the tool's global availability announcement in June 2026.

"Earlier this month, we also introduced the Meta Business Agent Platform, which gives Enterprises the infrastructure to build, customize and deploy their Business Agent at scale on WhatsApp," Li said during the call. "The platform provides larger businesses with enterprise-grade controls, guardrails and measurement built in so they can define rules and offer personalized experiences, starting within the messaging apps that their customers already use."

Li cited a specific deployment to quantify the platform's effect on operational metrics. "Movida, one of Brazil's largest car rental companies with nearly 400 locations, deployed a Business Agent on WhatsApp to handle the entire booking flow, from vehicle selection and pricing to payment, in a single conversation," she said. "Returning customers could complete a reservation in as few as three messages. In a one-month period, Movida reported a 44% increase in daily bookings through WhatsApp when compared to the same period in the prior year, and that 85% of conversations in the channel were resolved entirely by the AI agent without human assistance."

Zuckerberg framed the broader ambition behind the tool in terms that go beyond customer service. "One interesting thing about having an agent talk to your customers every day is that it learns over time and can bring all those insights back to you," he said. "So we're building more agentic capabilities to summarize all these conversations, digest what happened overnight, and surface what customers are asking for."

The $2.4 billion charge related to legal proceedings was the single largest driver of the quarter's cost increase, and it altered Meta's full-year financial outlook. In the earnings release, the company said it was "raising the lower-end of our expense outlook to incorporate the $2.4 billion charges related to legal proceedings recognized in the second quarter," moving the full-year 2026 total expense range to $165 billion to $169 billion.

Meta was direct about the litigation risk that remains unresolved. In the earnings release, the company stated: "we continue to monitor active legal and regulatory matters that could significantly impact our business and financial results. For example, we continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled for this year in the U.S., which may ultimately result in a material loss." Li repeated the same language on the earnings call, word for word, when closing her prepared remarks on the financial outlook.

The severance component of the quarter's expense growth stemmed from the reduction in headcount that Meta initiated in May 2026. Headcount stood at 75,472 as of June 30, 2026, a decrease of 1% year over year. According to the earnings release, that figure "includes approximately 8,000 employees impacted by the May 2026 headcount reduction, the majority of whom will no longer be reflected in our headcount by the end of the third quarter of 2026." Li added on the call that the company ended the quarter "with over 75,000 employees, down 3% from Q1."

Beyond the disclosed legal charge, analysts pressed Zuckerberg and Li on a related tension: Meta is fielding offers to sell its own compute capacity to third parties at a premium over what it paid, while simultaneously buying additional capacity from other providers. Doug Anmuth of JPMorgan raised the apparent contradiction directly. Zuckerberg's response acknowledged the strain without fully resolving it. "The high-level observation is that there's just nowhere near enough compute for all the demand," he said. "So that is why we see that like basically, we are getting a large number of offers for the compute that we have, but also we have a lot of internal uses that we think are going to be quite valuable." He added that selling all available compute for a short-term profit "would be foolish" given the multiplying value of building intelligence on top of it, a comment that speaks directly to how much of that infrastructure spending underpins the ad-ranking systems described above.

On capital expenditure plans for 2027, an area of investor scrutiny given rising infrastructure costs across the industry, Li declined to provide specifics. "We aren't providing a specific outlook for 2027 CapEx at this time," she told analysts. "Infrastructure planning remains highly dynamic and even this year, there are a range of outcomes embedded in our outlook."

Capital expenditures and the BlackRock partnership

Capital expenditures, including principal payments on finance leases, reached $31.08 billion for the quarter, according to the earnings release, up sharply from $17.01 billion in the second quarter of 2025. Meta narrowed its full-year 2026 capital expenditure guidance to a range of $130 billion to $145 billion, tightening from the prior outlook of $125 billion to $145 billion that the company had issued following its first-quarter 2026 results.

Zuckerberg disclosed a new infrastructure financing arrangement during his remarks. "Yesterday, as part of our Meta Compute effort, we announced a new strategic venture with BlackRock to develop a new 1GW data center in El Paso, Texas," he said. Li referenced the same deal later in the call when discussing capital sourcing strategy: "We've also broadened our aperture there to include partnerships like the one we announced with BlackRock yesterday. And we'll continue to be thoughtful about evaluating the appropriate different sources of capital overtime as we evaluate future projects."

Free cash flow fell to $784 million for the quarter, down from $8.55 billion a year earlier, a decline the company attributed to the scale of capital expenditure and a $24.91 billion increase in long-term debt issuance recorded during the period. Cash, cash equivalents, and marketable securities stood at $90.26 billion as of June 30, 2026, against long-term debt of $83.66 billion.

Platform milestones cited during the call

Zuckerberg opened his prepared remarks by listing several user-engagement milestones reached during the quarter, context that bears on the advertising business since impression growth depends on engaged reach. Instagram surpassed 2 billion daily active users. Threads crossed 500 million monthly active users, a figure Zuckerberg described as making it "the fastest growing conversation app ever," extending its growth from the 400 million monthly user mark disclosed in January 2026 when Meta completed the platform's global advertising rollout.

On the subscription side, Zuckerberg noted the recent launch of Meta One, a subscription offering spanning tools and AI features across the company's apps. Li added that quarterly Family of Apps other revenue, the category that includes subscriptions, reached $1 billion for the first time and grew 73% year over year, driven primarily by WhatsApp paid messaging and subscription revenue, a nonadvertising line that is beginning to register at meaningful scale alongside the core ad business.

Third-quarter outlook

Meta issued guidance for the third quarter of 2026, projecting total revenue in a range of $61 billion to $64 billion. The company said its guidance assumes foreign currency will present an approximately 1% headwind to year-over-year total revenue growth, based on exchange rates current as of the announcement.

On taxes, Meta said it expects its effective tax rate for the remaining quarters of 2026 to fall between 15% and 17%, an increase from the prior outlook range of 13% to 16%. The company's effective tax rate for the second quarter itself was 16%, according to the earnings release.

Timeline

  • July 30, 2025 - Meta posts 22% advertising revenue growth to $46.6 billion in Q2 2025, the base period against which this quarter's 27% growth is measured.
  • October 30, 2025 - Meta reports 26% revenue growth in Q3 2025, disclosing the GEM model's doubled GPU cluster and a 3.5% ad click lift on Facebook, and raising 2025 capital expenditure guidance to $70-72 billion.
  • January 28, 2026 - Meta reports Q4 2025 advertising revenue of $58.1 billion, with full-year 2025 advertising revenue reaching $196.2 billion.
  • January 21-26, 2026 - Meta completes the global rollout of advertising on Threads to all users, at a base of more than 400 million monthly active users.
  • April 29, 2026 - Meta reports Q1 2026 revenue of $56.31 billion, up 33%, with AI ad creative tool adoption at 8 million advertisers and capital expenditure guidance raised to $125-145 billion.
  • May 2026 - Meta initiates a headcount reduction affecting approximately 8,000 employees, generating $1.18 billion in severance costs recognized this quarter.
  • June 3, 2026 - Meta introduces the Business Agent for AI-handled customer conversations at its Conversations event, expanding the tool globally across WhatsApp.
  • July 7, 2026 - Meta releases Muse Image, the consumer image generation model referenced in this quarter's advertiser creative tooling discussion.
  • Early July 2026 - Meta introduces the Meta Business Agent Platform, giving enterprises infrastructure to build and deploy Business Agents at scale on WhatsApp.
  • July 28, 2026 - Meta announces a strategic venture with BlackRock to develop a 1GW data center in El Paso, Texas, as part of its Meta Compute infrastructure effort.
  • July 29, 2026 - Meta reports second-quarter 2026 results, disclosing $59.36 billion in advertising revenue, an 8% decline in net income to $15.8 billion, and a $2.4 billion legal charge.

Summary

Who: Meta Platforms, Inc. (Nasdaq: META), with results presented by chief executive Mark Zuckerberg and chief financial officer Susan Li, alongside vice president of finance Chad Heaton.

What: Second-quarter 2026 financial results showing $60.80 billion in total revenue, up 28% year over year, and $59.36 billion in advertising revenue, up 27%. Net income fell 8% to $15.85 billion, and diluted earnings per share dropped 13% to $6.18, driven by a $2.4 billion charge related to legal proceedings and $1.18 billion in severance expenses connected to a May 2026 headcount reduction. Operating margin fell to 31% from 43% a year earlier.

When: The results cover the quarter ended June 30, 2026, and were announced on July 29, 2026, via earnings press release, an accompanying investor presentation, and a conference call.

Where: The announcement was made from Menlo Park, California, Meta's headquarters, with the earnings call and supporting materials published through the company's investor relations website.

Why: The results matter to advertisers and marketers because they document specific, quantified changes to how Meta ranks, delivers, and prices advertising, including the newly introduced Meta Generative Recommender and measured conversion gains from the GEM and Adaptive Ranking Model systems. They also disclose a rare instance of legal costs materially reducing Meta's reported profit, alongside continuing uncertainty over youth-related litigation the company says could still produce a material loss, information relevant to anyone tracking the regulatory and financial pressures shaping the platform's advertising business.