Meta Platforms Inc. (META) Q2 '26 Earnings First Take

Equity Research 29 July 2026 | 4:34PM EDT

Meta Platforms Inc. (META): Q2 ‘26 Earnings First Take

We expect investors to have an initial negative reaction to META’s Q2 ’26 earnings Eric Sheridan | report on the back of roughly inline Q2 revenue trends (especially when measured Goldman Sachs & Co. LLC against investor expectations), a Q3 revenue guidance range inline with our current Alex Vegliante, CFA estimates at the high end & a narrowing of the 2026 capex range from $125-145b to | $130-145b. In addition, the company raised the low end of its prior FY26 total GAAP Goldman Sachs & Co. LLC

expense guidance to $165-169bn (from $162-169bn prior) to reflect a one-time Aarshiya Sachdeva | charge of $2.4bn related to legal proceedings taken in Q2. In total, and ahead of the Goldman Sachs & Co. LLC upcoming earnings call, these reported and guided figures will be interpreted by investors as a solid indicator of the application of AI compute to the company’s core Emma Huang | business but not quite the outsized positive returns that had been expected in recent Goldman Sachs & Co. LLC weeks. On the earnings call, we think how the mgmt team addresses a series of public commentary from the last several weeks will be critical to laying the foundation for a linear narrative around a few key themes: 1) rate of change and duration of elevated capex; 2) any offsetting restructuring efforts in terms of opex (supportive of EPS growth); 3) the current view on the company’s profitability levels, free cash flow generation and the need for capital (either debt or equity) in support of their ambitions; & 4) how to think about non-core platform and/or product initiatives (agentic, leasing/monetizing compute) that might be better clarified to produce revenue output and return profile in support of spend trajectory. In addition, we would expect more regular way questions to arise on the macro environment and its translation into forward revenue growth rates.

Actuals vs. Estimates: Meta reported Q2 total revenues of $60.80bn (vs. GSe $60.24bn, Visible Alpha Street $60.36bn & guide of $58.0-61.0bn), an increase of +28% YoY, including Family of Apps revenues of $60.37bn (+28% YoY) and Reality Labs revenues of $431mm (+17% YoY). Within Family of Apps, Meta reported total advertising revenues of $59.36bn (+27% YoY or +26% YoY FXN vs. GSe +26.4% YoY), including by region as follows: US & Canada $26.34bn; Europe $14.09bn, Asia $10.85bn & Rest of World $8.09bn. Q2 total daily active people were 3.60bn. Q2 GAAP operating income was $18.78bn (vs. GSe $19.98bn & Street $21.50bn) for a 31% consolidated GAAP operating income margin. By segment, Q2 GAAP operating income was as follows: Family of Apps $23.39bn (39% margin) & Reality Labs $(4.62)bn. Q2 GAAP EPS was $6.18, compared to GSe of $6.75 and Street $7.20.

Guidance vs. Street: Meta guided Q3’26 total revenues to $61.0-64.0bn (compared to GSe $64.06bn & Street $63.05bn) including FX being a ~100bps headwind to YoY growth. In addition, Meta guided FY2026 total GAAP expenses of $165.0-169.0bn

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Goldman Sachs Meta Platforms Inc. (META)

(vs. GSe $164.69bn, Street $162.36bn and prior guide $162-169bn) and FY2026 total capex to $130-145bn (vs. GSe $140.03bn, Street $136.72bn and prior guide $125-145bn).

Valuation: Our $815, 12-month price target is based on an equal blend of (1) EV/GAAP EBIT applied to our NTM + 1 year estimates and (2) a modified DCF using EV/FCF-SBC multiple applied to our NTM + 4 years estimates discounted back 3 years.

Risks to our Buy rating include: Competition for user growth, engagement & ad dollars; large investments in long-tailed initiatives depress margins for longer…