Meta Platforms reported a robust 22% year-over-year revenue growth in Q2 2025, reaching $47.52 billion, surpassing analyst expectations of $44.83 billion.
This performance was driven by its core advertising business, which generated $46.56 billion, exceeding Wall Street projections of $43.97 billion. The growth reflects strong advertiser demand, particularly in online commerce, gaming, and media/entertainment sectors, with AI-powered tools enhancing ad targeting and recommendation systems.
CEO Mark Zuckerberg highlighted that AI improvements have led to better content recommendations and more effective advertising experiences, contributing to a 22% increase in ad revenue, notably doubling Google's ad growth rate of 11% for the same period.
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| Mark Zuckerberg |
These investments aim to bolster both core AI (enhancing ads and user engagement) and generative AI (a longer-term bet for new revenue streams). Despite a 12% rise in costs and expenses to $27.08 billion, Meta’s operating margin expanded to 43%, reflecting efficient cost management.
Net income rose 36% to $18.34 billion, with earnings per share at $7.14, beating estimates of $5.89.
However, Meta’s Reality Labs division, focused on virtual reality and metaverse projects, continues to incur significant losses, posting a $4.2 billion operating loss in Q1 2025, with Q2 losses expected around $5.35 billion. Despite these losses, products like Ray-Ban Meta AI glasses show promise, with user engagement growing. The company also faces challenges from regulatory scrutiny in the US and EU and reduced ad spending from China-based e-commerce exporters like Temu and Shein due to trade tensions.