Meta Platforms Inc - Ordinary Shares - Class A

Revenue & profitability: strong top-line growth, margins pressured by AI spend and one-offs - Q2 total revenue: $60.8B (+28% YoY) ( +27% constant currency ). - Family of Apps ad revenue: $59.4B (+27% YoY; +26% constant currency); ad impressions +14% and avg price per ad +12% (pricing up from performance/macro/currency, partly offset by mix/low-monetizing surface growth). - Operating income (GAAP): $18.8B (down 8% YoY); 31% operating margin. - Main negative driver: legal charges ($2.4B) + severance ($1.2B) tied to May 2026 headcount reduction; excluding these, operating income would have risen ~9% YoY. - Free cash flow (FCF): $0.784B (down materially vs earlier periods), reflecting very heavy CapEx. - Surprising/important: FCF is low despite strong revenue—investors should expect this to be dominated by AI infrastructure build.

AI-driven product & monetization progress (the “why revenue is still strong”) - Recommendations/engagement improvements: LLMs increasingly used for ranking + content understanding + training signal generation; Instagram global time spent up double digits YoY; Facebook video time +9% YoY globally (>10% in US/Canada). - Fresh content + faster discovery: On Instagram Feed, >50% of recommended content is <1 day old ( more than double vs a year ago ); new Reels ranking release noted +15 basis points in Instagram sessions. - Ads performance gains: “Meta Generative Recommender (GEM)” and generative retrieval described as improving ad matching; early pilots reported +1% app event conversions (Instagram) and Q2 improvements of +8.3% ad clicks and +15.7% conversions (Facebook). - Advertiser adoption: Advantage+ solutions up to >$75B annual revenue run rate, and 9M small businesses using at least one AI ad creative tool.

Enterprise monetization + new revenue streams (opportunity expansion) - Business agents: Business agents launched globally on WhatsApp/Messenger; >1M businesses using them weekly; moving onto Instagram. - Agent value proposition: conversations generate learning, enabling overnight summaries + suggested improvements, potentially evolving into “business-in-a-box” style services. - Meta One subscription launched (new tiers expected as demand grows). - API/model monetization: high-intelligence model API launched at a “competitive price”; Muse Spark also expanded via OpenRouter (US developers) with more channels/countries planned. - Key opportunity: Mark emphasized monetizing not just compute but AI + agents + APIs + business tools—aiming for better ROI than selling raw compute.