Heading into Meta’s second-quarter earnings call, many expected a stumble. Instead, Meta came out running.
Revenue came in at $47.5 billion, up 22% year-on-year and over $3 billion above Wall Street’s expectations. Profits surged too: earnings per share hit $7.14, easily beating the forecasted $5.89. The stock jumped 12% in after-hours trading, adding more than $150 billion to Meta’s market cap in a single evening.
Of the total revenue, $46.38 billion came from ads. That’s a 20% increase, fuelled by a 9% rise in ad prices, an 11% increase in ads served and growing engagement across Facebook, Instagram, Threads and WhatsApp.
Meta’s latest ad serving models, built on its Andromeda AI architecture, are driving measurable results: a 5% boost in ad conversions on Instagram and 3% on Facebook. ‘The strong performance this quarter is largely thanks to AI unlocking greater efficiency across our ad system,’ Zuckerberg told analysts.
‘In Q2, we made enhancements to Andromeda that enabled it to select more relevant and personalised ad candidates while expanding coverage to Facebook Reels,’ added Meta CFO Susan Li.
Meta’s Advantage+ tool, which automates campaign setup, creative testing, targeting and delivery, is gaining traction, too. Nearly 2 million businesses are already using Meta’s generative tools to create video, image and text assets. As Li put it: ‘We completed the rollout of our streamlined campaign creation flow… and are working to expand to leads campaigns next. Adoption of our GenAI creative tools continues to broaden.’
Some marketers still question whether these tools outperform human-led campaigns but the adoption numbers suggest many businesses are willing to make the trade-off.
Meta is also piloting AI-powered ad translations in 10 languages, expanding its reach for global campaigns, while image resizing and creative generation tools are proving especially valuable to small and medium-sized businesses without in-house resources.
This quarter was also notable for its capital intensity. Meta’s capital expenditure reached $17 billion in Q2, and the company now predicts it will total $66 billion to $73 billion for the year. Zuckerberg calls it preparation for ‘superintelligence.’ Wall Street sees something simpler; a better ad machine that already prints money.
And print it does. Advertising made up 98% of Meta’s revenue this quarter. AI is now acting as the core growth driver of the world’s biggest digital ad platform.
Yes, Reality Labs still haemorrhages cash ($4.5 billion in Q2). Yes, Zuckerberg is still weirdly hyping smart glasses. But the real story isn’t in VR headsets or theoretical AGI, it’s in the concrete, incremental improvements to ad performance, powered by AI, that are already reshaping how advertising works.
Jesse Cohen, senior analyst at Investing.com, nailed the mood on Wall Street: ‘Meta’s impressive earnings and raised guidance highlight how artificial intelligence is becoming a genuine revenue driver, not just hype.
‘The company’s ongoing heavy investments in AI infrastructure indicate it is playing the long game.’
Meta’s impressive Q2 doesn’t signal the end of human input in advertising, that debate will rage on, but it does show just how fast AI is industrialising the core tasks of digital marketing: targeting, testing, scaling and optimising.
Wall Street rewarded Meta for doing what few others have, showing how AI can drive actual, bottom-line revenue growth. It’s too early to call it a long-term win, the company’s all-out push to inject AI into every corner of its products is already triggering backlash from some users. But this quarter proves that when the investment is focused, the returns can be real.
Main image by Annie Spratt on Unsplash.
