Meta feels the AI squeeze in Q2

Meta's second quarter was mixed at best, the company's debt load surged and free cash flow tanked.

CEO Mark Zuckerberg said AI is driving the core business, but the numbers reveal some strain. Free cash flow of $784 million is pretty good for most companies, but Meta's free cash flow was north of $12 billion in the third quarter.

Meta reported second quarter earnings of $15.85 billion, or $6.18 a share, on revenue of $60.8 billion, up 28% from a year ago.

Wall Street was looking for non-GAAP earnings of $7.40 a share on revenue of $60.3 billion.

As for the outlook, Meta projected third quarter revenue of $61 billion to $64 billion. The company said it took a charge of $2.4 billion in the second quarter and that will raise 2026 expenses to $165 billion to $169 billion.

Meta said 2026 capital expenditures will be between $130 billion to $145 billion, up from the outlook of $125 billion to $145 billion.

In addition, Meta's long-term debt in the second quarter stood at $83.66 billion, up from $58.74 billion a year ago.