Meta shares drop as Q2 profit declines due to legal expenses and
severance costs
[July 30, 2026] By
BARBARA ORTUTAY
Meta Platforms said Wednesday its second-quarter profit declined even as
revenue beat Wall Street's expectations, as legal expenses and severance
costs for recent layoffs weighed on its results.
The Facebook and Instagram parent company earned $15.85 billion, or
$6.18 per share, in the April-June period. That's down 14% from $18.34
billion, or $7.14 per share, in the same period a year earlier.
Revenue grew 28% to $60.8 billion from $47.52 billion.
Analysts, on average, were expecting earnings of $7.19 per share on
revenue of $60.22 billion, according to a poll by FactSet.
“AI is accelerating our core business today, powering our next
generation of products, and opening the door to entirely new enterprise
opportunities,” said CEO Mark Zuckerberg in a statement. “The results
are already showing, and I’m optimistic about the potential ahead.”
Meta said the number of daily active users on its “family of apps” —
Facebook, Messenger, Instagram and WhatsApp and Threads — grew 3% from a
year earlier to $3.6 billion. Zuckerberg said Instagram reached the 2
billion daily users milestone during the quarter, while Threads has 500
million monthly active users.
The Menlo Park, California-based company had 75,472 employees as of June
30, a decrease of 1% year-over-year. This still includes the roughly
8,000 workers the company said it would lay off. Meta said its
third-quarter earnings report will have the updated figure.
“Earnings come just as Meta pushes out an ad campaign and media blitz
that aim to clarify Meta’s stance and goals regarding AI. It’s not
surprising that Zuckerberg wants to come out with a more cohesive
message around the company’s AI ambitions, especially as Meta tries to
carve out its own lane,” said Emarketer analyst Minda Smiley. Zuckerberg
wrote a glowing op-ed about AI's future in the Wall Street Journal on
Tuesday, arguing that AI may soon deliver "personal superintelligence to
everyone.”
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 But Smiley said the "optimistic,
positive tone he’s striking stands in stark contrast to the negative
sentiment that’s building toward social media companies over claims
that they’ve harmed and addicted kids. This juxtaposition could make
it more difficult for Meta to build credibility in an area where
it’s already a laggard.”
For the current quarter, Meta is forecasting revenue in the range of
$61 billion to $64 billion, the midpoint of which is lower than the
$63.14 billion that analysts are expecting.
Meta also raised the lower end of its expense outlook to incorporate
the $2.4 billion in legal expenses. It now expects total 2026
expenses to be in the range of $165 billion to $169 billion.
Expenses for the second quarter were $42.03 billion, an increase of
55% year-over-year. Meta said this includes $2.40 billion of charges
related to legal proceedings and $1.18 billion of severance expenses
in connection with the layoffs announced in May.
The company's free cash flow — money left over after paying
operating costs and capital expenditures — dropped 91% to $784
million from $8.55 billion a year earlier.
Meta's shares fell $24.76, or 4.2%, to $560.85 in after-hours
trading after the results came out.
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