Due to legal issues and layoffs, Meta's second-quarter earnings per share fell short of expectations, leading to a sharp decline in after-hours trading
Complete. Here is the key summaryMeta released its Q2 fiscal report for the fiscal year 2026, with revenue of $60.8 billion exceeding expectations. However, it was impacted by a $2.4 billion litigation reserve and $1.2 billion in layoff costs, resulting in earnings per share of $6.18, which fell short of expectations. The stock price dropped nearly 8% in after-hours trading. The company raised its lower limit for annual capital expenditures to $135 billion to $145 billion and is collaborating with BlackRock to build data centers to support its AI initiatives
On the 29th, American tech giant Meta released its second-quarter earnings for the fiscal year 2026, showing that although the quarterly revenue exceeded expectations, the earnings per share fell short of market expectations due to one-time costs such as legal lawsuits and layoffs. Additionally, the midpoint of the revenue guidance for the next quarter was below analysts' estimates. As a result of the disappointing performance, Meta's stock price fell nearly 8% in after-hours trading.
The financial report indicated that Meta achieved a revenue of $60.8 billion in the second quarter, surpassing the market expectation of $60.2 billion, with advertising revenue reaching $59.3 billion. However, the earnings per share for the quarter were only $6.18, significantly lower than the analysts' expectation of $7.14. Meta pointed out that the lower-than-expected earnings per share were primarily due to a $2.4 billion legal reserve and $1.2 billion in severance costs; excluding these one-time impacts, the actual performance for the quarter exceeded market expectations.
Regarding performance guidance and capital expenditures, Meta expects third-quarter revenue to be between $61 billion and $64 billion, with the expected midpoint of $62.5 billion being lower than the market's general expectation of $63.1 billion. Meanwhile, to support the construction of artificial intelligence infrastructure, Meta has further raised the lower limit of its full-year capital expenditure for 2026, narrowing the estimated range from the original $125 billion to $145 billion to $135 billion to $145 billion.
To address the financial pressure from computing investments and expand monetization paths, Meta is accelerating infrastructure cooperation and the commercialization of computing power. The company has reached an agreement with BlackRock to jointly build a $14 billion data center in Texas, with BlackRock holding 80% and Meta holding 20%. Additionally, Meta CEO Mark Zuckerberg stated that the company is exploring a business model to lease data center computing capacity to external clients to open up new revenue sources.
In terms of the implementation of artificial intelligence technology, Meta recently launched the new Musk Spark 1.1 large model and adopted a low-price strategy to enter the market. Data shows that the developer usage fees charged by Meta for this model are significantly lower than similar products from competitors like Anthropic, aiming to attract customers and expand market share through cost-performance advantages