Beating out market expectations for its Q2 results, tech giant and advertising heavyweight Meta posted better than expected earnings. Meta shares surged approximately 7% in extended trading on Wednesday after the company reported better-than-expected revenue and profit, along with a favorable forecast for the current period.
The company posted revenues of $39.07 billion (against the $38.31 billion predicted by Wall Streetanalysts), and Meta's third-quarter revenue guidance is set between $38.5 billion and $41 billion, with a midpoint of $39.75 billion. Analysts had anticipated a forecast of $39.1 billion.
The Quarter 2 performance was marked by a revenue growth of 22% increase, reaching $39.07 billion from $32 billion a year earlier, with Net Income seeing a 73% increase to $13.47 billion from $7.79 billion a year earlier.
Meta's results underscore its continued dominance in the digital ad market, which is the company's core business. Advertising revenue, primarily from Facebook and Instagram apps, surged 22% year-over-year. In contrast, Alphabet, a top competitor, reported an 11% increase in Google ad sales last week, with YouTube falling short of estimates.
The company, which released its open-source Llama 3.1 LLM last week, will continue its bet on AI, with Meta founder and CEO Mark Zuckerberg, noting during the call, “We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year. We’ve released the first frontier-level open-source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps.”
Meta noted during the call that while the company is continuing “to refine our plans for next year, we currently expect significant capital expenditures growth in 2025 as we invest to support our artificial intelligence research and product development efforts.”
With its increased pivot to AI, as well as a slew of cost-cutting measures including laying off 21,000 employees in multiple rounds since 2022, Meta reported capital expenditures of $8.47 billion for Q2, and below the $9.51 billion that had been estimated by analysts.
