By Katie Paul and Jaspreet Singh
July 29 (Reuters) – Meta Platforms reported a precipitous 91% drop in free cash flow on Wednesday, underscoring the financial strain of the social media giant’s costly AI buildout despite an uncertain payoff.
The company reported free cash flow of $784 million in the second quarter, down from $8.55 billion reported a year earlier.
Shares of the company fell about 5% in extended trading.
Meta’s cash flow wipe-out echoed Alphabet’s, which last week said it was cash flow negative for the first time ever as it spent $5.9 billion in the second quarter. The rate of spending stunned even the most bullish of Wall Street investors, driving Alphabet’s stock down.
Facebook parent Meta now expects 2026 capital expenditure to be between $130 billion and $145 billion, compared with its prior forecast of $125 billion to $145 billion.
The company also raised the lower end of its expense outlook to incorporate the $2.4 billion charges related to legal proceedings recognized in the second quarter.
Meta said it now expects full-year 2026 total expenses to be in the range of $165 billion to $169 billion, compared with its prior forecast of $162 billion to $169 billion.
(Reporting by Katie Paul in New York and Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar and Nia Williams)
Comments