Meta Platforms(US:META) Haitong Securities International·2025-07-31 05:36Investment Rating - The report does not explicitly state an investment rating for the industry or company Core Insights - Meta reported strong Q2 2025 results, with revenue rising 22% YoY to $47.5 billion, exceeding consensus estimates of $44.8 billion. GAAP net income reached $18.3 billion, up 36% YoY, with an EPS of $7.14 [13][14] - The advertising business remained robust, with Family of Apps ad revenue up 21% YoY to $46.6 billion, driven by a 9% increase in ad pricing and 11% growth in impressions [13][14] - Meta's strategic goal is "personal superintelligence," with the establishment of Meta Superintelligence Labs to advance next-gen AI models and multimodal systems [14][15] - Total expenses for Q2 2025 rose 12% YoY to $27.1 billion, with R&D expenses increasing by 23%, primarily for AI and infrastructure investments [14][15] - Meta plans to return capital to shareholders through share repurchases and dividends, with $9.8 billion in stock buybacks and $1.3 billion in dividends during the quarter [14][15] Summary by Sections Q2 2025 Performance - Revenue for Q2 2025 was $47.5 billion, a 22% increase YoY, with net income at $18.3 billion, a 36% increase YoY, and an EPS of $7.14 [13][14] - Family of Apps ad revenue reached $46.6 billion, up 21% YoY, with an operating income of $20.4 billion and an operating margin of 43% [13][14] AI Strategy and Investment - Meta's AI strategy focuses on five major initiatives, including the development of next-gen models and AI systems [14][15] - The company raised its full-year expense guidance to $114–118 billion, reflecting a 20–24% YoY increase, with expectations for faster expense growth in 2026 [15] Q3 2025 Outlook - Meta expects Q3 2025 revenue to be between $47.5 billion and $50.5 billion, with growth dependent on ad monetization efficiency and user engagement [16] - The company plans to expand ad inventory on platforms like Threads and WhatsApp, although short-term contributions are expected to be limited [17] Advertising System Enhancements - New AI recommendation models have improved conversion rates, with Instagram ads up 5% and Facebook ads up 3% [19] - AI enhancements have led to increased user engagement, with Facebook usage time up 5% and Instagram up 6% [19]