Meta Platforms reported second-quarter earnings that exceeded analyst expectations, with a revenue of $47.5 billion compared to a consensus estimate of $44.8 billion. The company's operating income reached $25.7 billion and earnings per share stood at $7.14. Looking forward to the third quarter, analysts expect revenue growth between $47.5 billion and $50.5 billion, attributing this potential increase to higher AI investment and improved user engagement through AI-driven content recommendations. Meta's focus on AI is central to its financial success and growth in the digital advertising market.
Meta's second-quarter revenue of $47.5 billion handily exceeded Wall Street's consensus estimate of $44.8 billion, driven by a two-point constant-currency acceleration in advertising revenue growth to 22%. Meta's GAAP operating income of $25.7 billion and earnings of $7.14 per share also each exceeded analysts' expectations of $17.1 billion and $5.89 per share, respectively.
Looking ahead to the third quarter, the analysts noted that guidance suggests higher AI investment spending, albeit supported by continued strong revenue growth as compared to Meta's peers, with projected revenue ranging between $47.5 billion and $50.5 billion (up 17% to 24% year over year).
The high end of the revenue range suggests a further 1% acceleration in constant-currency growth, fueled by an increase in user engagement, thanks to a combination of AI-driven content suggestions and an improvement in ad conversion rates.
Meta's substantial investment in AI has proven to be a key factor behind its success in driving both user engagement and advertising revenue higher. Recent posts from Meta CEO Mark Zuckerberg revealed plans to significantly ramp up AI spending.
Collection
[
|
...
]