- Revenue Growth - $47.5 billion, up 22% year-over-year
- User Engagement - 3.4 billion daily active users across its apps
- AI Investments - $17 billion in capital expenditures for AI infrastructure, including Prometheus and Hyperion clusters
- Expenses - $27.1 billion, up 12% year-over-year
- Financial Outlook - Q3 revenue guidance of $47.5 billion to $50.5 billion
Advertising Performance and AI-Driven Growth
Meta's advertising performance improved significantly, with AI-driven efficiency gains driving roughly 5% more ad conversions on Instagram and 3% on Facebook. The company's AI efforts are focused on developing superintelligence, with a new lab established to work on the next generation of models, including Llama 4.1 and 4.2. According to Susan Li, "We're seeing strong ROI in our core AI work, but we're still in the early stages of monetizing our generative AI investments."
Valuation and Financial Outlook
At current prices, Meta trades at a P/E ratio of 27.24, a P/S ratio of 10.87, and an EV/EBITDA multiple of 21.25. The company's dividend yield is 0.27%, with a free cash flow yield of 2.58%. Analysts estimate next year's revenue growth at 13.5%, with a strong financial position expected to drive compelling profit growth in the coming years. The company's ROIC and ROE are impressive, at 27.02% and 39.33%, respectively, indicating a strong ability to generate returns on investment.
Investments in AI and Infrastructure
Meta's primary focus remains investing in the business, with infrastructure and talent being top priorities. The company expects significant growth in headcount, particularly in AI, and plans to ramp up investments in infrastructure, including computing capacity, to support AI model development and product initiatives. The company sees strong potential in its AI-driven glasses, with its Ray-Ban initiative progressing well, and is building infrastructure with fungibility in mind, prioritizing investments in AI and data centers.
Monetization and Future Outlook
The company continues to evolve its ads platform, optimizing for each business' objectives and the way they measure results. This includes the global rollout of its incremental attribution feature and the launch of omnichannel ads, which enable advertisers to optimize for incremental sales both in-store and online. With a strong financial position and a focus on driving engagement and personalization through its AI models, Meta is well-positioned for future growth and is expected to deliver compelling profit growth in the coming years.