Meta Platforms announced a dramatic 91% drop in free cash flow for the second quarter, a reflection of its intense investment in artificial intelligence infrastructure. The tech giant reported $784 million in free cash flow for the quarter ending June 30, a stark contrast to the $8.55 billion recorded during the same period last year. This financial update led to a decline in Meta’s share value during after-hours trading.
CEO Mark Zuckerberg emphasized that the company is channeling substantial resources into enhancing computing power to train AI models. These efforts aim to bolster Meta’s core operations, develop personal AI assistants, and create AI-driven services targeted at enterprise clients. Zuckerberg remains confident about AI’s potential to become a significant business driver for Meta in the long run, despite the hefty initial expenses involved.
While Meta’s earnings per share of $6.18 fell short of analysts’ forecasts of $7.22, the company enjoyed a 28% increase in quarterly revenue, reaching $60.8 billion. This growth was largely fueled by the robust performance of its advertising segment. Looking ahead, Meta has revised its capital expenditure forecast for 2026, projecting investments between $130 billion and $145 billion as it continues to expand its AI infrastructure and data center capabilities.
The company is also navigating various legal challenges, including lawsuits related to youth safety on its social media platforms. Meta indicated that legal and restructuring costs have adversely impacted its operating income for the quarter. Despite these financial pressures, Meta reported a rise in daily active users, which now stand at 3.6 billion across its suite of apps, demonstrating ongoing user engagement and growth.