Meta Platforms has announced a dramatic 91% drop in free cash flow for the second quarter, underscoring the financial burden of its substantial investment in artificial intelligence infrastructure. The company recorded $784 million in free cash flow for the quarter ending June 30, a steep decline from the $8.55 billion reported during the same period last year. This financial downturn led to a decrease in Meta’s stock price during after-hours trading.
CEO Mark Zuckerberg emphasized the company’s significant investment in computing power aimed at training AI models, expanding its fundamental operations, developing personal AI assistants, and creating AI services tailored for enterprise clients. Despite the considerable initial expenditure, Zuckerberg expressed confidence that Meta is strategically positioned to transform AI into a major long-term business opportunity.
In terms of financial performance, Meta reported earnings per share of $6.18, falling short of the $7.22 anticipated by analysts. Nonetheless, quarterly revenue saw a 28% increase year-over-year, reaching $60.8 billion, driven by robust performance in its advertising sector. Looking ahead, the company has adjusted its capital expenditure forecast for 2026 to a range of $130 billion to $145 billion, as it continues to enhance its AI infrastructure and data center capabilities.
Meta is also contending with ongoing legal challenges, including lawsuits concerning youth safety on its social media platforms. The company acknowledged that legal expenses and restructuring costs have negatively impacted its operating income for the quarter. Despite the increased expenditures, Meta reported a rise in daily active users across its applications to 3.6 billion, indicating sustained growth in user engagement.