Meta's advertising revenue climbed 27% year-on-year to $59.4 billion in the second quarter of 2026, the company reported, as more than 9 million small businesses now use its AI-powered creative tools to build and run campaigns. The jump in ad sales highlights how the company's investments in artificial intelligence are reshaping the way advertisers reach audiences across Facebook, Instagram, WhatsApp and Threads.
Overall revenue from Meta's Family of Apps business rose 28% to $60.4 billion, accounting for nearly all of the company's $60.8 billion in quarterly revenue. Ad impressions increased 14% and the average price per ad rose 12%, reflecting both higher engagement and improved monetisation.
AI adoption scales across the advertising platform
Meta said the number of small businesses using at least one of its AI creative solutions continues to accelerate. The company launched Meta Generative Recommender, a new advertising system that uses large language models to analyse advertising content and user preferences together, rather than evaluating ads individually. Early pilots on Instagram delivered a 1% increase in app event conversions, while Facebook's updated ad ranking models drove an 8.3% increase in ad clicks and a 15.7% improvement in conversions.
Chief Executive Officer Mark Zuckerberg said the company's AI work is now producing tangible results. "Overall, the scale and reach of our community across our apps is pretty remarkable, and it gives us a strong platform for delivering new innovations to billions of people. We are now at a point where our investments in AI are accelerating every major part of our core business. They're improving the experience for people using our apps, driving better performance for advertisers, and helping our teams build new experiences and ship faster," Zuckerberg said.
Adoption of AI-powered image generation tools, which let advertisers create multiple ad variations from existing content, more than doubled during the quarter. Meta also introduced an end-to-end AI creative solution that converts campaign performance insights into new ad creatives while preserving brand identity. The company said its upcoming Muse Image model will further improve the ability to generate high-quality creative content at scale.
Investments in AI infrastructure weigh on profits
Meta's operating income fell 8% year-on-year to $18.8 billion, as capital expenditure reached $31.1 billion, including principal payments on finance leases. Free cash flow dropped to $784 million, reflecting the company's heavy spending on AI infrastructure. Meta's market capitalisation stood at approximately $1.48 trillion at the end of the quarter.
Alongside advertising tools, Meta launched Meta One, a subscription offering that gives users additional AI-powered features across its apps. The move signals a broader push to embed AI across both consumer and advertiser experiences.
Why this matters for marketing professionals
The rapid adoption of AI tools on Meta's platforms signals a structural shift in how campaigns are built and optimised. Marketers who understand AI for Marketing will be better positioned to take advantage of these capabilities, especially as generative creative tools and LLM-based targeting systems move from pilot to default. On Social Media platforms where ad performance improvements are already measurable-an 8.3% click lift and 15.7% conversion boost on Facebook, for example-delaying adoption of AI-assisted workflows is a competitive risk. The quarter's results show that AI is no longer a future promise for advertising; it is the current mechanism driving reach and return on Meta's properties.
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