Meta Platforms(US:META) Waton Financial·2025-08-21 11:17Investment Rating - Investment Rating: Buy [2] Core Insights - Meta's Q2 2025 performance significantly exceeded market expectations, continuing a strong trend with revenue of $47.5 billion, a 22% year-over-year increase; operating income of $20.4 billion, up 38%; operating margin improved from 38% to 42%; net income reached $18.3 billion, a 36% increase from $13.5 billion in the same quarter of 2024; earnings per share rose from $5.16 to $7.14 [3][14][15] Financial Performance - Meta's Q2 2025 revenue and operating income both grew, with an operating margin of 42%, up from 38% in Q2 2024, driven by AI tools enhancing advertising effectiveness and reducing barriers for small businesses [14][15] - The company reported a significant increase in operating cash flow, reaching $25.56 billion, a 32% year-over-year growth, despite a substantial rise in capital expenditures to $17.01 billion, which was a 102% increase from the previous year [15] - Free cash flow remained healthy at $8.55 billion, although it decreased by 21.6% compared to Q2 2024 [15] Business Development - Meta's core business, the Family of Apps, continues to lead advertising revenue growth, with Q2 2025 ad revenue reaching $46.6 billion, a 21% year-over-year increase [4][16] - The user base across Meta's platforms averaged 3.48 billion daily active users in June 2025, a 6% increase from the previous year, contributing to an 11% increase in ad impressions and a 9% rise in ad prices [17] - The company is focusing on emerging platforms like Instagram Reels and Threads to capture market share, particularly among younger users, while also planning to introduce ads on WhatsApp [17] Financial Projections - For Q3 2025, total revenue is expected to be between $47.5 billion and $50.5 billion, reflecting a year-over-year growth rate of approximately 17% to 24% [4] - Full-year revenue for 2025 is projected to be between $114 billion and $118 billion, achieving a year-over-year growth rate of 20% to 24% [4] - Operating income and net income are also expected to grow, with operating income projected at $79.8 billion for 2025, a 14.98% increase from 2024 [5]