Meta Platforms experienced a significant drop in free cash flow during the second quarter, plunging 91% compared to the previous year. The company reported $784 million in free cash flow for the quarter ending June 30, a stark contrast to the $8.55 billion recorded a year earlier. This financial outcome underscores the substantial impact of Meta’s intensive investment in artificial intelligence infrastructure, which prompted a decline in its share price during after-hours trading.
CEO Mark Zuckerberg emphasized the company’s commitment to investing in computing power to support the training of AI models. This investment extends to expanding Meta’s core business, developing personal AI assistants, and creating AI services for enterprise clients. Despite the considerable upfront costs, Zuckerberg expressed confidence in Meta’s strategic position to leverage AI into a major long-term business opportunity.
Meta’s financial report also revealed earnings per share of $6.18, falling short of analysts’ expectations of $7.22. Nevertheless, the company’s quarterly revenue saw a 28% increase year-over-year, reaching $60.8 billion, bolstered by ongoing strength in its advertising sector. Looking ahead to 2026, Meta anticipates capital expenditures ranging from $130 billion to $145 billion, revising the lower end of its previous forecast as it continues to enhance its AI infrastructure and data center capabilities.
The company is also navigating legal challenges, including lawsuits concerning youth safety on its social media platforms. Meta indicated that legal expenses and restructuring costs negatively impacted its operating income during the quarter. Despite these financial pressures, the company reported an increase in daily active users across its applications, reaching 3.6 billion, which reflects a continued rise in user engagement.