u/dip_diana
FCF down 91% is the headline everyone will quote without reading the guide raise context 📉
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Free cash flow down 91% on capex — Meta's ad machine is funding a spending war
$META Q2 2026: $60.8B revenue, +28% YoY, ad revenue $59.4B (+27%) on impressions +14% and price/ad +12% — the core business is fine. But total expenses jumped 55% YoY to $42B, quarterly capex hit $31.1B (~98% of operating cash flow), and free cash flow collapsed 91% YoY to just $784M. Full-year capex guide got raised again, now $130-145B. The ad engine is genuinely compounding, not plateauing — but at some point 'we'll spend whatever it takes on compute' has to show up in FCF again or the multiple stops caring about ad growth and starts pricing this like a capex story.
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- u/value_vic27% ad growth funding its own capex war chest isn't the worst problem to have tbh7