Meta Platforms(US:META)2025-07-30 22:02Financial Data and Key Metrics Changes - Q2 total revenue was $47.5 billion, up 22% year over year on both a reported and constant currency basis [18] - Q2 total expenses were $27.1 billion, up 12% compared to last year [18] - Operating income for Q2 was $20.4 billion, representing a 43% operating margin [20] - Net income was $18.3 billion, or $7.14 per share [20] - Free cash flow was $8.5 billion, with $9.8 billion repurchased in Class A common stock [21] Business Line Data and Key Metrics Changes - Family of Apps revenue was $47.1 billion, up 22% year over year [22] - Family of Apps ad revenue was $46.6 billion, up 21% to 22% on a constant currency basis [22] - Reality Labs revenue was $370 million, up 5% year over year [25] - Family of Apps operating income was $25 billion, representing a 53% operating margin [24] Market Data and Key Metrics Changes - Ad revenue growth was strongest in Europe and the rest of the world at 24% and 23% respectively [22] - North America and Asia Pacific grew 21% and 18% respectively [22] - The total number of ad impressions served increased by 11%, driven mainly by Asia Pacific [23] - The average price per ad increased by 9% due to increased advertiser demand [23] Company Strategy and Development Direction - The company is focused on developing superintelligence through Meta Superintelligence Labs, aiming to empower individuals [6][7] - Investments are being made in AI systems to improve advertising efficiency and user engagement [11][12] - The five basic opportunities being pursued include improved advertising, engaging experiences, business messaging, Meta AI, and AI devices [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of AI development and its potential impact on the business [51][52] - The company expects to deliver additional improvements in user engagement and monetization efficiency throughout the year [26] - There are anticipated challenges from regulatory environments, particularly in the EU, which could impact revenue [45] Other Important Information - The company ended Q2 with $47.1 billion in cash and marketable securities and $28.8 billion in debt [21] - Capital expenditures for Q2 were $17 billion, driven by investments in infrastructure [20] - The company is exploring partnerships for financing large-scale data center projects [77] Q&A Session Summary Question: Insights on AI strategy evolution - Management noted that aggressive assumptions have often predicted outcomes accurately, and they are focused on self-improvement in AI systems [50][51] Question: Commentary on OpEx and CapEx - Management provided insights into the budgeting process for 2026, highlighting infrastructure and compensation as key drivers of expense growth [55][56] Question: Technological constraints for superintelligence - Management emphasized the importance of self-improvement in AI and the need for small, talent-dense teams for leading research [64][66] Question: Open source AI approach - Management confirmed that they will continue to open source some models while being cautious about sharing larger models due to competitive concerns [73] Question: Financing CapEx - Management expects to finance a significant portion of CapEx internally but is also exploring partnerships for data center development [77] Question: ROI on CapEx - Management expressed strong confidence in the ROI from core AI investments, while acknowledging that Gen AI is still early in the return curve [81]