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META · Q2 2026
Archived report (Q2 2026). Latest deep dive →
The quarter in brief
Revenue growth stayed strong at 28% on resilient ad pricing and volume, but a $2.4B legal charge and $1.18B severance expense drove costs up 55%, compressing operating margin to 31% and pulling net income down 14% year-over-year.
Net Income
$15,848M
down 13.6% y/y
Revenue
$60,801M
up 28.0% y/y
Operating Income
$18,775M
down 8.2% y/y
Gross Profit
$49,471M
up 26.7% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| Advertising | $59,363 · +27.5% |
| Other Revenue | $1,007 · +72.7% |
| Family of Apps | $60,370 · +28.0% |
| Reality Labs | $431 · +16.5% |
| Revenue | $60,801 · +28.0% |
| Cost of Revenue | $11,330 · +33.4% |
| Gross Profit | $49,471 · +26.7% · 81% margin |
| R&D | $21,656 · +67.3% |
| Marketing, G&A (incl. $2.4B legal charge) | $9,040 · +60.6% |
| Operating Income | $18,775 · −8.2% · 31% margin |
| Interest & Other, net | −$19 · vs +$93 |
| Pre-Tax Income | $18,756 · −8.7% |
| Income Tax | $2,908 · +32.4% |
| Net Income | $15,848 · −13.6% · EPS $6.18 · −13.4% |
Verdict: revenue growth stayed strong at 28% on resilient ad pricing and volume, but a $2.4B legal charge and $1.18B severance expense drove costs up 55%, compressing operating margin to 31% and pulling net income down 14% year-over-year.
OCF $31,862M; capex incl. finance leases $31,082M; free cash flow $784M; dividends paid $1,353M; no buybacks this quarter; Q3'26 revenue guidance $61-64B; FY26 total expenses guided $165-169B.
Source and notation
* marks non-cash / ≈ estimated. Source: Meta Platforms press release / 10-Q (SEC EDGAR).
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<figure> <a href="https://whoreportstoday.com/t/meta/q2-2026"><img src="https://whoreportstoday.com/t/meta/q2-2026/sankey.png" alt="META Q2 2026: where the revenue went" loading="lazy" style="max-width:100%;height:auto"></a> <figcaption>Source: <a href="https://whoreportstoday.com/t/meta/q2-2026">Who Reports Today</a>, licensed under <a href="https://creativecommons.org/licenses/by/4.0/">CC BY 4.0</a></figcaption> </figure>
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<a href="https://whoreportstoday.com/t/meta/q2-2026">META Q2 2026 earnings chart (Who Reports Today)</a>
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- Total costs and expenses rose 55% y/y, including a one-off $2.40B legal-proceedings charge (in G&A) and $1.18B severance from the May 2026 headcount reduction.
- Operating margin fell from 43% to 31% largely due to these one-off charges plus continued R&D scale-up (+67% y/y) tied to AI infrastructure investment.
- Reality Labs remains a persistent drag, posting a $4,619M operating loss on just $431M revenue, offsetting Family of Apps' $23,394M operating profit.
- Effective tax rate jumped from 11% to 16%, adding to the net income decline beyond the operating cost pressures.
- Free cash flow collapsed to $784M (from $8,549M) as capex surged to $31,082M, reflecting aggressive AI/data-center buildout even as operating cash flow grew 25%.
- Advertising revenue (98% of total) grew 27% y/y on 14% more impressions and 12% higher average price per ad, showing core ad engine still firing despite bottom-line pressure.
What distorts the picture in this report and what to watch beyond the headlines.
META — Meta Platforms operates social media and digital communication platforms, including Facebook, Instagram, and WhatsApp.
Headquartered in California, USA, it also invests in virtual reality and metaverse technologies.
Heads-up
- net income fell 14% y/y in Q2 2026
Net income for Q2 2026: $15,848M, −14% y/y. In the report's figures: costs grew faster than revenue: r&d +67% y/y, marketing, g&a (incl. $2.4b legal charge) +61% y/y, cost of revenue +33% y/y. Based on the Q2 2026 report.
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