Meta grew advertising revenue 27% year over year to $59.4 billion in the second quarter, but a weaker-than-expected Q3 forecast and rising AI infrastructure costs sent shares lower despite the top-line beat. For marketers, the results cut two ways: Meta's AI-powered ad products are delivering stronger campaign performance, while policy changes in Europe threaten to reduce personalization capabilities.
Total revenue climbed 28% YoY to $60.8 billion for the period ended June 30, according to the company's earnings statement. CFO Susan Li said the company faces a tough comparison against strong ad impressions growth in Q3 last year and could see additional headwinds from European policy changes that allow for less personalized ads. Meta forecast Q3 revenue in the range of $61 billion to $64 billion, below what some investors had modeled.
AI ad tools reach new scale
Advantage+, Meta's AI-powered suite of ad products, reached a $75 billion annual revenue run rate in Q2. The quarter also saw the rollout of the Meta Generative Recommender, which Li described as a "paradigm shift" in how the platform runs ads. "Rather than scoring every possible ad individually, we are now using [large-language models] to reason about ad content and user preferences together, and predict the best ad for each person," Li explained. "This makes our ad matching more intelligent and more precise, which compounds performance gains for advertisers."
CEO Mark Zuckerberg pointed to the company's competitive position. "On a dollar basis, our ads business is reporting faster year-over-year revenue growth than any other company's reported ad business - so these AI investments are paying off," he said on the earnings call. Some researchers expect Meta could surpass Google in ads revenue for the first time this year, though Google's cloud-computing segment provides a buffer that Meta lacks.
For marketing managers, the acceleration of tools like Advantage+ and the Generative Recommender signals that AI for Marketing is no longer experimental - it is the core engine driving ad performance on Meta's platforms.
Infrastructure costs outpace returns
Meta narrowed its full-year capital expenditures to a range of $130 billion to $145 billion, raising the floor from a prior estimate of $125 billion. The growing spend on AI infrastructure is testing investor patience. "Meta believes AI infrastructure is now a strategic asset, but its bill is arriving faster than the payoff," said Forrester Vice President and Research Director Mike Proulx. "Meta's ad business is still a monster, but everything else got more expensive."
Proulx added that the earnings report forces a reckoning. "Revenue beat expectations and engagement continued to grow, but what it generated in cash this quarter almost all got eaten by AI infrastructure spending. Investors now have to decide whether Meta's growing list of AI initiatives represents company diversification or distraction."
Revenue beyond advertising
Meta's "Other" revenue for its family of apps jumped 73% YoY to $1 billion for the first time, driven by stronger demand for WhatsApp paid messaging and subscriptions. Still, the $1 billion figure remains small relative to Meta's advertising operation, which generated $59.4 billion in the same period.
Why this matters for marketing professionals
Meta's AI ad products are delivering measurable results, and the company is betting heavily that they will continue to do so. The Generative Recommender changes how ads are matched to users, and Advantage+ is already generating a $75 billion run rate. For marketing managers who want to understand how these tools work and how to deploy them effectively, an AI Learning Path for Marketing Managers can provide practical grounding in the platforms that are reshaping ad buying. The European policy changes, meanwhile, serve as a reminder that personalization capabilities are not guaranteed - marketers should watch how regulatory shifts affect targeting options in key markets.
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