Meta's Profit Fell 14% Despite Revenue Crushing It.

Revenue: $60.8B, up 28% YoY, slightly ahead of the $60.29B estimate EPS: $6.18, missing the $7.22 estimate by 14% snapped a six-quarter beat streak Net income: $15.85B, down 14% YoY Operating margin: 31%, down from 43% a year ago Why profit dropped despite the revenue beat: $2.4B in legal charges (youth-related litigation risk flagged for upcoming U.S. trials) $1.18B in severance from the May layoff of \~8,000 employees, part of an AI-focused restructuring Excluding these one-time items, operating income would've grown 9% YoY the underlying business stayed healthy Ad business still firing: Family of Apps ad revenue: $59.4B, up 27% YoY Ad impressions up 14%, average price per ad up 12% 3.6 billion daily active people across all Meta apps AI and capex story: Full-year 2026 capex guidance: $130-145B, up massively from $72.2B in 2025 Announced a $10B+ joint venture with BlackRock for a 1 GW data center in El Paso, Texas Q2 capex alone: $31.1B Guidance: Q3 revenue: $61-64B Full-year expenses raised to $165-169B Still expects 2026 operating income to exceed 2025 When Does Meta's AI Capex Actually Turn Into ROI, and What Determines the Payoff?