This topic discusses the upcoming Q2 2026 Meta Platforms earnings. It will include our final assessment and decision before the earnings release. We will also summarize the results here. You can find our earnings preparation and full summary of the results in the Notion:
Earnings date: July 29, 2026
Time of Earnings release: 4:00 PM ET
Time of Analysts Call: 4:30 p.m. ET
I=8 Tinuiti Ads Benchmark report implies Meta Q2 2026 revenue growth of approximately 27%-32%
Ad spent growth on Meta Platforms by Tinuiti advertisers decelerated to 11% y/y in Q2 2026 from 13% in Q1 2026, CPM rose 10% y/y- a rebound from three straight quarters of decline while ad impressions rose 2% after four straight quarters of double-digit growth.
Ad spend growth on Facebook rose 7% y/y (Q1 2026: +4%), ad impressions fell 5% y/y after averaging 13% growth over the last six quarters, while CPM rose 13% y/y versus a decline of 4% last quarter.
Ad spend growth on Instagram rose 17% y/y versus growth of 28% in Q1, CPM was flat y/y (Q1 2026: -3%) while ad impressions rose 17% (Q1 2026: +31%).
Ad spend growth on TikTok rose 31% y/y (Q1 2026; +14%) as advertiser concerns over its future fades, ad impressions rose 13% (Q1 2026: +2%) while CPM grew 16% versus versus growth of 11% in Q1 2026.
Ad spend growth on Google search grew <14% y/y, roughly unchanged from Q1, click through rate (CTR) rose 13% (Q1 2026:+14%), while cost per click (CPC) was muted at 1%.
Assessment
Tinuiti Ads Benchmark report has historically been reliable in predicting Meta’s revenue growth.
Based on this Tinuiti report, I estimate Meta’s Q2 2026 revenue growth at 27–32%, above management’s guidance range of 22.1–28.4%:
In Q2 2025, Q3 2025, Q4 2025, and Q1 2026, Meta’s reported revenue growth exceeded Tinuiti’s Meta platform ad spend growth by 10, 12, 15, and 20 percentage points, respectively (Tinuiti Report (Google Sheets)). While this trend suggests Meta could outperform Tinuiti’s ad spend data by around 27%, the company also faces tougher year-over-year comparisons. Notably, Meta’s revenue growth rate in Q2 2025 was 22% versus 16% in Q1 2025. Extrapolating from this, Meta’s revenue could grow by around 32% in Q2 2026 (11%+27%-6%).
Alternatively, the average outperformance in the most recent three quarters were 14% in Q1 2026 and 12% in Q4 2025. Using a recent average outperformance of 16 percentage points suggests revenue growth of roughly 27%.
It’s good to see that despite the rebound in ad spend on TikTok, ad spend on Meta Platforms remains strong.
Tinuiti CPM numbers may not be reliable for Meta Platforms given they have often deviated significantly from the actuals.
I think taking better and better outperformance for our estimates is risky as we cannot catch the point where things start turning.
Do we have Tinuitis numbers vs. Meta actual numbers in a Google sheet overtime? I would like to have a short look how both developed in the last couple of quarters
Google’s Q2 2026 advertising revenue rose 14.4% y/y to $81.63 billion, roughly in-line with analysts’ estimate of $81.12 billion while total revenue rose 24% y/y to $119.8 billion, above analysts’ estimate of $116.9 billion.
Alphabet’s revenue beat was driven by cloud revenue which rose 82% y/y to $24.8 billlion, above analysts’ estimate of $22.4 billion.
Capex was $44.9 billion, roughly in line with estimate of $44.8 billion.
YouTube advertising revenue came in at $11.1 billion versus analysts estimate of $10.8 billion while revenue from Google Search was $63.27 billion versus estimate of $63.28 billion.
Alphabet raised its 2026 capex guidance by $15 billion to $195-205 billion.
“We are updating our full year 2026 CapEx guidance range to $195 billion to $205 billion, up from our previous estimate of $180 billion to $190 billion. The increase in the range is primarily due to an acceleration in the delivery of capacity to meet growing demand. As we previously shared, we continue to expect our CapEx to increase significantly in 2027 and we’ll provide more details at a later date,” CFO Anat Ashkenazi said in the earnings call.
I am positive on Meta Platforms heading into Q2 2026 earnings. My Q2 2026 estimates (Meta Platforms (Google Sheets)) are based on positive Tinuiti report, positive ad spend checks, continued gains from Meta’s AI-driven ad models, FX tailwind, and Meta’s consistent guidance beats over the most recent nine quarters. Given the potential for Meta’s shares to come under pressure from a higher capex guidance and ongoing youth-related lawsuits, I maintain a Hold rating on the stock.
Bullish arguments
Positive Tinuiti report: According to Tinuiti Ads Benchmark report (forum post), which has been consistently reliable in predicting Meta’s revenue growth, ad spend on Meta Platforms by Tinuiti advertisers rose 11% y/y in Q2 2026. Extrapolating from this report alone, Meta’s Q2 2026 revenue could grow by approximately 27-32%.
Further upside from ad recommendation models: Meta continues to scale its ad ranking and recommendations models (Andromeda, Lattice, and GEM). For instance, in Q1 2026, it made enhancements to Lattice and GEM, resulting in a 6% increase in conversion rate for landing page view ads. They also still see a lot of room to continue improving recommendations throughout the year (Q1 2026 Meta Platforms Earnings (Notion)).
Ad spend forecasts for 2026 and 2027 continue to be revised upward: Recent updates by leading advertising market research firms (Dentsu, Madison & Wall, PQ Media, WARC, and WPP) raises the 2026 average growth forecast global ad spend by 1.2 points to +8.9%. That of 2027 has also been slightly revised upwards (forum post). Additionally, Guidelines indicate that U.S. digital advertising spend (actual measurement) rose 10.9% and 9.4% y/y in April and May, respectively versus 9.5% in Q1 2026 (forum post).
Analysts are bullish on the quarter due to positive ad checks: Analysts from firms such as Bernstein, Wolfe Research, Bofa, UBS, and Citi expect Meta to report solid results for Q2 due to positive ad checks (Q2 2026 Meta Platforms Earnings (Notion)).
User engagement continues to grow: Citizens said their checks indicate Instagram engagement momentum continues. It pointed out that global time spent grew 13% y/y in June, marking the thirteenth consecutive month of double-digit growth (Q2 2026 Meta Platforms Earnings (Notion)).
Alphabet’s advertising revenue was in line with estimates: Google’s Q2 2026 advertising revenue rose 14.4% y/y to $81.63 billion, roughly in-line with analysts’ estimate of $81.12 billion (forum post).
Midpoint revenue guidance beat in the most recent nine quarters: Meta Platforms has exceeded its midpoint revenue guidance by an average of 3.9% in the most recent nine quarters (Google Sheets).
Meta LLMs are catching up with rivals: Muse Spark 1.1 and Muse Image registered significant improvement in performance, with third-party tests indicating Muse Spark 1.1 outperforms Gemini models. This sends a strong signal that Meta’s Superintelligence Labs is now executing well and that its upcoming models will likely compete for the top spot.
Meta could sell excess compoute at a huge premium: There is strong indication that Meta Platforms is joining cloud business. For instance, it recently hired AWS Senior Vice President Dave Brown (forum post) and Zuckerberg recently said (forum post) that it makes sense for Meta to explore it. There are also reports that Antropic is in discussion with Meta Platforms to lease compute worth $10 billion over two years (forum post). Given the strong demand for AI compute, Meta should be able to command premium pricing for its compute capacity and sign flexible short-term agreements. This reduces the risk of overbuilding compute capacity.
Revenue contributions from subscriptions: Meta recently launched Facebook, Instagram, WhatsApp and Meta AI subscriptions. Based on the traction of Snaptchat+, Meta’s $3.99 per month subscription for Facebook, Instagram and WhatsApp could generate at least $3.3 B in incremental revenue (forum post). Evercore estimates the subscriptions could generate $10 billion-plus in revenue and $5 billion-plus in operating income by 2028 while Truist Securities estimate it could generate more than $20 billion in high-margin revenue by fiscal year 2030 (Q2 2026 Meta Platforms Earnings (Notion)).
FX tailwind: Meta will again benefit from the strengthening of the foreign currencies against the U.S. dollar in Q2 2026. Management is guiding FX tailwind of around 2% while my estimate is around 1.1%-1.4% (Meta FX Estimate (Google Sheets)).
Bearish arguments
Continued increase in capex: There are strong indications that Meta’s capex will continue to rise. I expect the company to raise its 2026 capex guidance by approximately $10–15 billion from the current range of $125–145 billion, driven by higher chip costs and additional lease commitments. I also expect 2027 capex to increase to approximately $225–250 billion, based on reports that Meta plans to bring 14 GW of compute capacity online next year, up from 7 GW in 2026 and around 1 GW in 2025 (Meta Platforms (Notion)).
Youth-related lawsuits and regulatory headwinds: Fines associated with youth-related lawsuits could reach $45 billion based on current legal precedent. Additionally, Meta faces the risk of platform changes in the U.S. and Europe aimed at addressing allegations of addictive platform design. However, these lawsuits are likely to take years to resolve, resulting in some of the cases being dropped by plaintiffs and Meta not having to bear the full potential liability at once. Political interventions may also limit changes to its platforms design (forum post).
Buildout of business AI agents is slower than expected: A recent internal memo indicates that Zuckerberg told employees that the buildout of business AI agents is slower than expected (forum post). Given that business AI agents are among Meta’s key AI monetization opportunities, slower-than-expected progress in their rollout could weigh on investor sentiment.
Employee morale is at its lowest point due to AI strategy: Meta’s recent layoff, decision to track employee keystrokes and create applied AI unit seems to have negatively impacted employee morale (forum post). Sustained dissatisfaction could increase the risk of executive turnover, and potentially impact execution of Meta’s AI initiatives.
Problems with Meta’s AI ad creative tools: A recent report indicates that Meta’s AI ad creative tools frequently generate inaccurate images, distorted products, and unintended modifications, requiring brands to manually review campaigns before launch (forum post). If these reliability issues persist, they could limit adoption and slow Meta’s efforts to displace traditional advertising agencies and creative firms. I had expected further market share gains from the adoption of these tools.
Iran conflict may impact ad spend: An escalation of the U.S.-Iran conflict could drive higher energy prices, increasing inflationary pressures and weakening consumer spending. Lower consumer demand may prompt businesses to reduce advertising budgets, creating a potential headwind for Meta’s revenue growth. WARC estimates that a sustained U.S.-Iran conflict could reduce its 2026 global ad spend growth forecast by approximately 1.7 percentage points to 9.8% in a moderate scenario (forum post).
Management guidance and analysts' estimates:
Management Guidance for Q2 (Revenue): $58-$61 billion (+22.1% to +28.4%)
Analysts’ Estimate for Q2 (Revenue): $60.2 billion (+26.8%) Analysts’ Estimate for Q2 (EPS): $7.20 (+0.9%)
Analysts’ Estimate for Q3 (Revenue): $63.2 billion (+23.4%)
I=10 Meta shares fall more than 7.5% after Q3 revenue guidance misses estimates
Meta’s Q2 2026 revenue rose 28% y/y to $60.8 billion, above management’s midpoint guidance of $59.5 billion and analysts’ estimate of $60.2 billion.
EPS was $6.18 but $7.51 when legal costs of $2.4 billion and severance costs of 1.18 billon are excluded, versus analysts’ estimate of $7.20.
Meta guided Q3 2026 revenue in the range of $61-$64 billion (+19% to 24.9%), midpoint guidance of $62.5 billion missed analsysts’ estimate of $63.2 billion.
It raised lower point guidance capex for 2026 by $5 billion versus analysts expectations for a $5-15 billion increase overall, and also raised 2026 total expenses to a range of $165-$169 billion from a range of $162-$169 billion to reflect the legal proceedings recognized in Q2.
Family daily active people (DAP) rose 3% y/y and 1% QoQ to 3.6 B — a return to sequential growth (Q1 2026:-0.6% QoQ), ad impressions grew 14% y/y (Q1 2026: +19% y/y) while average price per ad increased 12% y/y (Q2 2026: +12% y/y).
Meta shares down 7.5% at the time of writing this post due to the dissapointing revenue guidance.
Q2 2026 Meta Platforms Earnings Call key insights and overall assessment
CEO Mark Zuckerberg repeatedly described consumer personal agents as the next major platform with massive opportunity, adding that they will ship them at some point soon.
Zuckerberg pointed out that they believe margin for selling personal intelligence will continue to be significantly higher than selling compute directly.
CFO Susan Li said they are maximizing compute availability in 2026 and 2027 while laying groundwork for further growth in 2028 (depending on demand then).
“Our focus is on gearing our current infrastructure plans towards maximizing capacity in 2026 and '27 and giving us the flexibility to continue to grow in '28 and beyond.”
“Generally, we believe near-term capacity is more valuable than long-term capacity.”
“Our longer-term capacity strategy aims to give us the flexibility to continue growing compute in 2028 and beyond by laying down data center and network foundations to accommodate future server decisions.”
Meta is increasingly leveraging LLMs throughout recommendation, retrieval, ranking, and creative systems, with the first generative retrieval model increasing Instagram app-event conversions by 1% in pilot phase in Q2 2026.
Li said they continue to see headroom to improve recommendations in 2026 and towards the end of 2027.
Assessment
Zuckerberg’s comments on margins for cloud business versus personal intelligence signals that they will be less inclined to sell compute in 2026 and 2027 given they are still compute constraint.
Their commentary on capacity deployment in 2026, 2027, and 2028 may also signal 2027 will be a peak year for capex. In my opinion, it’s unlikely that 2028+ compute that is coming online will be higher than that of 2027 given Li’s comment that “near-term capacity is more valuable than long-term capacity” and the fact that other companies are also trying to increase compute deployment as soon as possible.
The Q3 2026 revenue guidance is definitely concerning, especially since R&D expenses came in significantly higher than I expected in Q2 2026 (+67% y/y versus my estimate of +50%). However, LLMs are already proving accretive to ad performance, and management believes there is still meaningful runway this year and next year to further improve ad recommendations and ranking. That said, I still expect Q3 2026 revenue growth rate of 23% y/y versus management’s midpoint guidance of +22%, given Meta continues to top midpoint guidance.
I suspect token costs were also a major driver, given reports that Meta plans to impose limits on AI token usage as those costs have climbed into the billions. Meta flags it as well in its 10-Q.
