Meta reported a blowout second quarter as AI-fueled ads and product engagement lifted the top and bottom line. The company posted revenue of $47.52 billion and $7.14 EPS, beating Wall Street’s targets, and its shares surged over 10% after-hours on July 30.
Management raised guidance for the September quarter, signaling confidence that its AI-first strategy will continue to yield positive results. Meta now expects Q3 revenue of $47.5–$50.5 billion as advertisers continue to shift budgets toward its performance tools.
AI-Powered Beat And Strong Outlook
The earnings print topped consensus on every major line. Meta reported beating revenue expectations of $44.81 billion and EPS expectations of $5.88, with core engagement remaining high. Across its family of apps, daily active people reached 3.48 billion in June 2025. Time spent increased as recommendations improved, with Meta crediting a 5% uplift on Facebook and a 6% increase on Instagram during the quarter.
Guidance implies steady demand during the holiday build-up. Executives framed the range as prudent given macro noise, yet reiterated that AI ranking and creative tools are helping advertisers find incremental conversions, which supports the strong third-quarter forecast.
Spending Big On Compute
Meta’s investment cycle is still accelerating. For 2025, the company now projects capital expenditures of $66–$72 billion, approximately $30 billion higher than last year, primarily for data centers and talent acquisition. Management argues the outlays will keep model training on pace with product ambition.
The roadmap includes new large campuses. Meta says it is building multiple high-capacity clusters, including a 1-gigawatt Prometheus facility in Ohio, which is due online in 2026, and a 5-gigawatt Hyperion campus in Louisiana, which is expected to be fully operational by 2030. One project will be enormous in terms of footprint: Hyperion will span an area comparable to Manhattan and carry a $10 billion budget, making it Meta’s largest site to date.
To speed deployments, the company has shifted from traditional layouts to “tent” construction for rapid builds. The infrastructure plan also includes on-site natural gas generation and partner capacity to add resilience and scale.
Scale AI Deal Reshapes The Org Chart
One headline move reshaped Meta’s AI leadership bench. In June, Meta closed a $14.3 billion investment for a 49% non-voting stake in Scale AI, valuing the data labeling company at over $29 billion. Soon after, Scale’s founder, Alexandr Wang, 28, joined Meta as Chief AI Officer to co-lead Meta Superintelligence Labs with former GitHub chief Nat Friedman.
By size, this is Meta’s most significant minority stake and its second-largest deal, after the $19 billion acquisition of WhatsApp. The tie-up also triggered changes at Scale: the startup cut 14% of its workforce and 500 contractors in July as some customers reduced work in the wake of Meta’s investment.
The Talent War Turns White-Hot
Meta has been offering eye-popping packages to recruit researchers. Multiple reports document offers of $200–$300 million over four years, with more than $100 million vesting in the first year for top candidates across OpenAI, Google, Apple, and Anthropic.
Those tactics yielded results. Meta recruited at least 16 elite researchers, including OpenAI veterans Jason Wei and Hyung Won Chung, as well as Ruoming Pang, the lead for Apple’s foundation models. Not everyone approved. OpenAI’s chief executive, Sam Altman, said $100 million signing bonuses were “unethical” and described exploding offers that expired within hours.
There were also high-profile refusals. Researchers at the Thinking Machines Lab rejected offers of up to $1 billion over multiple years, according to reports, citing concerns about leadership and the product path.
Antitrust Overhang Remains
The FTC’s case against Meta continues to loom over strategy. A historic antitrust trial began on April 14, 2025, with the agency arguing that Meta had illegally consolidated power through its acquisitions of Instagram and WhatsApp. During the proceedings, Mark Zuckerberg testified and faced emails from 2012 about “neutralizing” Instagram.
Arguments were wrapped up in late May, and the trial concluded on May 27, 2025, with Judge James Boasberg expected to rule promptly. If the government prevails, possible remedies include divesting Instagram and WhatsApp, an outcome some analysts say could cut Meta’s U.S. ad revenue roughly in half.
Inside The Ad Engine
Advertising still pays the bills. Meta reported advertising revenue of $46.56 billion, representing a 21% year-over-year increase. As spending shifted toward direct-response formats, margins moved higher. The company noted that the operating margin expanded to 43% from 38%, reflecting efficiency gains in delivery and measurement.
Pricing also improved. Meta reported that the average price per ad increased by 9%, while impressions rose by 11%. Those metrics suggest advertisers continued to find incremental conversions as the recommendation system learned from more signals.
The hardware push remains expensive. Reality Labs reported a $4.53 billion operating loss, despite revenue growth, with the unit generating approximately $370 million in sales, a 5% increase, driven by the success of Ray-Ban Meta smart glasses.
Why It Matters
The quarter tells a simple story. AI investments improved product quality, which in turn enhanced engagement, ultimately leading to increased revenue. The company is taking the windfall and reinvesting it in computing and personnel. The risk is that spending stays high while regulation tightens and competition in models pushes costs up again. The reward is a durable lead in ranking, creative tools, and automation that advertisers cannot easily replace.
Investors will watch whether the guidance implies steady growth without another step-up in spending. They will also track progress on the new campuses that underpin training plans and monitor the court docket in Washington for a ruling that could alter the company’s shape.
What To Watch In Q3
Meta set a high bar with its guidance. The key questions for the next quarter are straightforward. Can ad pricing and impressions remain strong amid macroeconomic shifts? Will time spent benefit again from fresh models as the creative pipeline scales? Does the company continue to hire at the same pace, or do packages normalize after a summer surge? The answers will signal whether this year’s AI spending is buying long-lived advantages or chasing short-term results.
Key Takeaways:
- Meta posted revenue of $47.52 billion and $7.14 EPS, and shares jumped more than 10% after hours.
- Guidance calls for Q3 revenue of $47.5–$50.5 billion, as AI tools continue to drive conversions.
- The 2025 capital expenditure (capex) is projected to be $66–$72 billion to fund new campuses, including Prometheus and Hyperion.
- The Scale deal brought Alexandr Wang to Meta as Chief AI Officer after a $14.3 billion investment in Scale AI for a 49% stake in the company.
- The FTC case began on April 14, 2025, and concluded on May 27, 2025, with possible divestitures on the table.
- Ads remain the engine, with ad revenue up 21% to $46.56 billion, margins at 43%, and pricing and impressions both higher.