Meta Platforms (META) Q2 2025 Earnings Overview
Since July 31, Meta Platforms has gained over 5%, driven by its impressive second-quarter results that exceeded expectations. The company also surprised investors with forward guidance indicating growth prospects that outpace prior predictions, fueling further enthusiasm around the stock.
Meta is best known for its suite of social media platforms Facebook, Instagram, Threads, WhatsApp, and Messenger. The core revenue driver across these apps remains advertising, which delivered $46.6 billion in Q2 alone.
Overall, Meta reported $47.5 billion in total revenue for the quarter, underscoring its dominance in digital advertising and user engagement.
Althrough Meta is a current alert its a stock we traded very well when it dipped and many members still hold the name, its also our favourite of the MAG 7 stocks and we believe investors should have some exposure to the name anytime it dips.
This earnings overview will dive deeper into Meta’s latest financial results and highlight key takeaways for investors.
After a stellar 2024, Meta entered 2025 with strong momentum, but its stock took a hit early in the year, mirroring broader weakness across the AI sector.
Investor sentiment was shaken by headline risks, including concerns over competitive advances from Chinese AI firm DeepSeek and President Trump’s latest round of global tariffs.
These factors pushed many toward safer assets, putting pressure on high-growth tech stocks like Meta.
Despite these challenges, Meta’s core business fundamentals have remained solid. The company reported strong first-quarter results, beating expectations on both revenue and profitability.
Operating margins expanded by 360 basis points to 41%, and advertising spend across Meta’s platforms stayed resilient, even amid macroeconomic uncertainty.
That said, Meta has yet to fully capitalize on the AI race, despite heavy investments and aggressive talent acquisitions in the space.
Meta recently hit our last sell target of $770. At this level, we’re taking a neutral stance, awaiting the next earnings report to see whether Meta’s significant AI spending begins to drive meaningful development and growth.
Second Quarter 2025 Operational and Financial Highlights
Family Daily Active People (DAP): Averaged 3.48 billion in June 2025, marking a 6% increase year-over-year.
Ad Impressions: Increased 11% year-over-year across Meta’s Family of Apps.
Average Price per Ad: Rose 9% year-over-year.
Revenue: Reached $47.52 billion, up 22% year-over-year on both reported and constant currency bases.
Costs and Expenses: Totaled $27.07 billion, a 12% increase year-over-year.
Capital Expenditures: Including principal payments on finance leases, totaled $17.01 billion.
Capital Return Program: Share repurchases of Class A common stock amounted to $9.76 billion, with total dividends and dividend equivalents at $1.33 billion.
Cash and Marketable Securities: Stood at $47.07 billion as of June 30, 2025. Operating cash flow was $25.56 billion, while free cash flow reached $8.55 billion.
Looking ahead, Meta expects third-quarter sales between $47.5 billion and $50.5 billion, exceeding Wall Street’s estimate of $46.14 billion. Capital expenditures are forecasted to range from $66 billion to $72 billion, slightly raising the lower end of the previous guidance.
Meta also noted that hiring-related compensation will be the “second-largest driver of growth,” projecting that 2026 expenses will grow at a higher rate than in 2025.
Reality Labs, Meta’s division focused on virtual and augmented reality, reported a $4.53 billion operating loss on $370 million in sales during Q2. While the loss was narrower than analyst expectations, sales fell short of estimates.
Meta revised its total expense forecast for 2025, now expecting costs to range between $114 billion and $118 billion, slightly raising the low end from the previous estimate of $113 billion to $118 billion.
On the digital advertising front, Meta highlighted that the sector continues to perform well, reflecting ongoing strength in consumer spending.
Regarding its rising capital expenditures, Meta’s CFO Li mentioned during the earnings call that the company is “exploring ways to work with financial partners to co-develop data centers,” signaling efforts to optimize infrastructure investment.
Meta’s net income for Q2 increased 36% year-over-year, reaching $18.34 billion.
While the company did not provide specific guidance for fourth-quarter sales, it cautioned that year-over-year growth is expected to slow compared to Q3, as it will be up against a strong growth period in the fourth quarter of 2024.
Loop Capital Maintains Buy on Meta Platforms, Raises Price Target to $980
Citigroup Maintains Buy on Meta Platforms, Raises Price Target to $915
JP Morgan Maintains Overweight on Meta Platforms, Raises Price Target to $875
Wedbush Maintains Outperform on Meta Platforms, Raises Price Target to $920
DA Davidson Maintains Buy on Meta Platforms, Raises Price Target to $825
Scotiabank Maintains Sector Perform on Meta Platforms, Raises Price Target to $685
