Why Is Meta Platforms (META) Down 2.9% Since Last Earnings Report?

A month has gone by since the last earnings report for Meta Platforms (META). Shares have lost about 2.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Meta Platforms due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.META Q2 Earnings & Revenues Beat EstimatesMeta Platforms reported second-quarter 2025 earnings of $7.14 per share, beating the Zacks Consensus Estimate by 22.5%. The figure surged 38.4% year over year. Revenues of $47.52 billion beat the Zacks Consensus Estimate by 5.96% and increased 21.6% year over year. At constant currency (cc), revenues soared 22% year over year.META’s Top-Line Growth Rides on Strong User BaseRevenues from Family of Apps (99.2% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 21.8% year over year to $47.15 billion.Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, was 3.48 billion, up 6.4% year over year. Geographically, revenues from the United States & Canada, Asia-Pacific, Europe and the Rest of the World (RoW) surged 21%, 18.7%, 24% and 24% on a year-over-year basis, respectively.META’s Advertising Revenues Jump Y/YAdvertising revenues (98.8% of Family of Apps revenues) increased 21.5% year over year to $46.56 billion and accounted for 98% of second-quarter revenues. At cc, revenues increased 22% year over year.Advertising revenues from the United States & Canada, Asia-Pacific, Europe and the RoW surged 20.8%, 18.5%, 24.4% and 23% on a year-over-year basis, respectively.Ad impressions delivered across Family of Apps increased 11% year over year, and the average price per ad jumped 9% in the reported quarter. Impression growth from Asia-Pacific, the RoW, the United States & Canada and Europe was 16%, 7%, 9% and 6%, respectively.Family of Apps’ other revenues soared 50% year over year to $583 million.Reality Labs’ revenues (0.8% of total revenues) increased 4.8% year over year to $370 million.META Expands Operating Margin Driven By Lower CostsIn the second quarter of 2025, total costs and expenses increased 11.8% year over year to $27.08 billion. As a percentage of revenues, total costs and expenses were 57%, down 500 basis points (bps) year over year. In the reported quarter, Family of Apps expenses were $22.2 billion, accounting for 82% of Meta Platforms’ overall expenses. FoA expenses were up 14% year over year, primarily due to higher infrastructure and headcount-related costs. Reality Labs’ expenses were $4.9 billion, up 1% year over year.As a percentage of revenues, marketing & sales expenses decreased 70 basis points (bps), while general & administrative expenses fell 380 bps on a year-over-year basis.Research & development expenses, as a percentage of revenues, were 22.8%, up 30 bps on a year-over-year basis.Meta Platforms’ employee base was 75,945 at the end of the second quarter, up 7% year over year.Operating income of $20.44 billion jumped 37.7% year over year. The operating margin was 43%, expanding 500 bps year over year.Family of Apps’ operating income surged 29.1% year over year to $25 billion. Reality Labs reported a loss of $4.53 billion compared with the year-ago quarter’s loss of $4.49 billion.META’s Balance Sheet & Cash Flow Remains StrongAs of June 30, 2025, cash & cash equivalents and marketable securities were $47.07 billion compared with $70.23 billion as of March 31, 2025.Long-term debt was $28.83 billion as of June 30, 2025, unchanged from the figure reported as of March 31, 2025. Capital expenditures were $17.01 billion in the second quarter, while free cash flow was $8.55 billion.META Offers Positive GuidanceMeta Platforms expects total revenues between $47.5 billion and $50.5 billion for the third quarter of 2025, including 1% tailwind from favorable forex. The company expects the year-over-year growth rate in the fourth quarter of 2025 to be slower than the third quarter.For 2025, META anticipates total expenses between $114 billion and $118 billion (narrowed from the prior outlook $113-$118), indicating a growth rate of 20-24% year over year. META expects 2025 capital expenditure to be in the range of $66-$72 billion.How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.The consensus estimate has shifted 12.68% due to these changes.VGM ScoresCurrently, Meta Platforms has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Meta Platforms has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks