META’s earnings report, in one sentence: Ads are making money, AI is burning it—one hit a new revenue record, the other reached new heights of spending.
Revenue rose 26% to $64.6 billion, with ad impressions and prices both up—impressions rose 10%, and the average price per ad rose 14%. The core money-making business is in good shape.
But capital expenditures surged to $34.9 billion, pushing free cash flow to negative $2.12 billion. The company still expects to burn $135–145 billion over the full year.
Here’s the story in two parts:
1. Issuing non-voting Class C shares lets Zuckerberg lock in control, showing he’s determined to go all in on this AI gamble.
2. AI isn’t just sitting in the cloud—it’s built right into the ad algorithms. Impressions and prices are rising together, and the investment is starting to pay off.
In the short term, infrastructure spending is keeping cash flow firmly in the red—not a pretty picture. But in the long run, as long as monetization efficiency holds up, today’s spending could build a wall competitors can’t scale.
There’s just one risk: if monetization efficiency falls, all that spending turns into a cash drain.
$META #Meat