Meta Platforms Inc. stunned investors and analysts alike with its second-quarter earnings report for 2025, sending its stock price soaring to record highs in after-hours trading on July 30. The tech giant, known for its flagship social media platforms Facebook, Instagram, WhatsApp, and Messenger, posted revenue of $47.52 billion, marking a 22% increase year-over-year and comfortably surpassing Wall Street expectations of around $44.8 billion. Earnings per share (EPS) came in at $7.14, a staggering 36% to 38% above forecasts, which hovered near $5.88 to $5.92.
This remarkable performance was largely driven by a surge in advertising revenue, which climbed 21% to $46.6 billion, exceeding market predictions of $43.97 billion. The company’s daily active user base across its suite of apps reached 3.48 billion, up 6% from the previous year and surpassing analyst estimates. Meta’s ability to monetize its vast user network, combined with strategic investments in artificial intelligence (AI), has propelled its growth despite a challenging economic environment.
CEO Mark Zuckerberg outlined a bold vision for the future, emphasizing Meta’s transformation into an AI powerhouse. On the day of the earnings release, Zuckerberg shared his thoughts on “personal superintelligence,” a concept he believes is now within reach. He described this superintelligence as a deeply personalized AI system that understands users’ goals and context to help them achieve their ambitions. “Personal superintelligence that knows us deeply, understands our goals, and can help us achieve them will be by far the most useful,” Zuckerberg wrote. He further predicted that AI-enabled glasses would become the primary device integrating this intelligence into daily life, blending the physical and digital worlds seamlessly.
Meta’s aggressive AI investments are evident in its recent $15 billion stake in Scale AI, an AI startup whose CEO, Alexandr Wang, now leads Meta’s newly formed Superintelligence Labs. This elite team, including former OpenAI researcher Shengjia Zhao and ex-GitHub CEO Nat Friedman, is focused on advancing frontier AI research. Zuckerberg praised the lean, talent-dense structure of the lab, stating, “The ability for small talent, dense teams to be the optimal configuration for driving frontier research.”
These AI efforts have already begun to pay dividends. Meta reported that nearly two million advertisers are now using its AI-powered video generation, image animation, and text generation tools, boosting ad conversion rates by approximately 5% on platforms like Reels. The company also started testing AI-powered translations in ten languages during the quarter, broadening its global reach.
On the hardware front, Meta’s Reality Labs, which focuses on virtual and augmented reality products, posted sales of $3.7 billion, a nearly 5% increase year-over-year. This growth was partly fueled by accelerating sales of AI-enhanced Ray-Ban smart glasses, which Zuckerberg envisions as “the ideal form factor for AI.” While Reality Labs continues to operate at a loss—$4.53 billion in the quarter—it has narrowed its operating loss compared to expectations.
Meta’s financial strength is underscored by an operating income of $20.44 billion and an operating margin of 43%, both significantly improved from the previous year. Net income reached $18.3 billion, while free cash flow stood at $8.5 billion. The company ended the quarter with $47.1 billion in cash and marketable securities, alongside $28.8 billion in debt.
However, these ambitions come with a hefty price tag. Meta forecasted total expenses for 2025 to range between $114 billion and $118 billion, marking a 20% to 24% increase year-over-year. Capital expenditures are projected between $66 billion and $72 billion, reflecting heavy spending on AI infrastructure and data centers. Analysts at Citizens predict that capital spending could surge to around $91 billion in 2026 as Meta continues to scale its AI capabilities.
Employee compensation, particularly for technical talent in priority areas such as AI, is Meta’s second-largest driver of cost growth after infrastructure. Despite this, the company’s overall headcount slightly decreased to 75,945 employees in Q2, down about 1% from the previous quarter. CFO Susan Li highlighted the company’s focus on recruiting leading AI experts to maintain its competitive edge in the rapidly evolving tech landscape.
Meta’s commitment to sustainability also remains a key pillar of its corporate strategy. Since achieving net-zero emissions for its global operations (Scope 1 and 2) in 2020, the company has made significant strides toward its ambitious goal of reaching full value-chain net-zero emissions (Scope 3) by 2030. It has cut operational emissions by 94% from a 2017 baseline and signed contracts for over 11.7 gigawatts of renewable energy, positioning itself among the world’s largest corporate purchasers of clean electricity.
In 2024, Meta restored over 1.5 billion gallons of water through 18 nature-based projects spanning North America, India, and Southeast Asia, aiming to become water positive by 2030. The company also diverted more than 80% of its operational waste from landfills in 2023 and integrates sustainable design principles into its buildings and data centers, including the use of low-carbon materials like mass timber.
Despite these advances, Meta faces scrutiny over its reliance on renewable energy certificates (RECs) and carbon offsets, which some experts argue are less effective than direct decarbonization. The company has launched a Net Zero Supplier Engagement Program to encourage suppliers to set science-based emissions reduction targets, covering about 28% of supplier-related emissions by the end of 2023.
Looking ahead, Meta raised its Q3 2025 revenue guidance to a range of $47.5 billion to $50.5 billion, signaling confidence in continued growth. Analysts praised the company’s ability to scale profitably while making massive capital investments in AI, with William Blair calling it a “massive quarter fueled by AI advancements.” Bank of America named Meta a “Top Online ad stock” for 2025, citing its strong positioning in AI-driven advertising.
However, challenges remain. Oppenheimer analysts warned of risks including potential difficulties in innovating AI features, intensifying competition from other tech giants, and possible impacts from privacy restrictions on ad effectiveness. Meta’s ability to balance rapid AI expansion with sustainability and governance concerns will be critical as it navigates this transformative phase.
As Meta’s stock surged over 11% in after-hours trading, reaching prices above $777 per share and on track for an all-time high, the company stands at a pivotal moment. Its strategic bets on AI and sustainability are reshaping its future, with personal superintelligence poised to redefine how billions interact with technology daily.
