Meta's second quarter saw a positive market reaction, as management attributed the results to increased engagement across its family of apps and improved ad performance. CEO Mark Zuckerberg highlighted that AI-powered recommendation systems and ad tools drove significant gains in both user time spent and ad conversions. CFO Susan Li pointed to strong adoption of generative AI features in ad products, particularly among small and medium advertisers, and called out improved infrastructure and lower legal costs as additional contributors to margin expansion. The quarter's results were further supported by rising demand for business messaging and ongoing momentum in Meta's hardware segment, including AI glasses.
Is now the time to buy META? Find out in our full research report (it’s free).
Meta (META) Q2 CY2025 Highlights:
- Revenue: $47.52 billion vs analyst estimates of $44.83 billion (21.6% year-on-year growth, 6% beat)
- Adjusted EPS: $7.14 vs analyst estimates of $5.86 (21.8% beat)
- Adjusted EBITDA: $29.62 billion vs analyst estimates of $26.64 billion (62.3% margin, 11.2% beat)
- Revenue Guidance for Q3 CY2025 is $49 billion at the midpoint, above analyst estimates of $46.29 billion
- Operating Margin: 43%, up from 38% in the same quarter last year
- Daily Active People: 3.48 billion, up 210 million year on year
- Market Capitalization: $1.98 trillion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Meta’s Q2 Earnings Call
- Eric Sheridan (Goldman Sachs) asked about the trajectory and impact of Meta’s AI strategy on talent and compute investments. CEO Mark Zuckerberg explained that aggressive AI progress is shaping major infrastructure and hiring decisions, while CFO Susan Li detailed how these factors drive operating expense and capital expenditure growth.
- Brian Nowak (Morgan Stanley) questioned technological constraints in advancing superintelligence and engagement drivers. Zuckerberg emphasized research on self-improving AI and the benefits of talent-dense teams, while Li outlined ongoing improvements to recommendation engines and plans to scale foundational models.
- Doug Anmuth (JPMorgan) inquired about Meta’s open source AI approach and financing for CapEx. Zuckerberg confirmed a continued selective open-source strategy, and Li said Meta is exploring external financing partnerships for data centers to provide flexibility for infrastructure build-out.
- Justin Post (Bank of America) asked whether Meta’s growing compute capacity could be offered externally and about CapEx ROI. Li stated the focus remains on internal use cases for now and described strong measured returns for core AI investments, while acknowledging genAI monetization is a longer-term opportunity.
- Mark Shmulik (Bernstein) sought clarity on key performance indicators for superintelligence progress and investment cadence. Zuckerberg said internal metrics focus on talent, model quality, and the rate of AI-driven improvement, while Li reiterated that profit growth will be non-linear as investments accelerate.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be watching (1) the pace of Meta AI adoption and engagement across Facebook, Instagram, and WhatsApp, (2) operational execution on scaling AI infrastructure and integrating new ad formats on emerging platforms like Threads, and (3) the outcome of regulatory discussions in Europe, which could impact both user experience and revenue in that region. Sustained progress in AI-driven content personalization and hardware supply improvements will also be key signposts.
Meta currently trades at $790.60, up from $695.37 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
