META · 10-Q · 2026Q2 · Full report
Operating Expense Trends
Meta Platforms, Inc. · 2026-07-30 · Importance 83 · Surprise 82 · In source text
Total costs and expenses increased 55% to $42.026 billion in the second quarter and increased 46% to $75.464 billion for the six months. General and administrative expense increased 111% to $5.609 billion in the quarter and 66% to $8.222 billion for the six months, primarily because of $2.40 billion in legal-proceeding charges during the quarter. Marketing and sales expense increased 15% to $3.431 billion in the quarter and 11% to $6.339 billion for the six months, driven primarily by third-party AI token costs and severance. Higher compensation, infrastructure, legal, and AI-token costs caused second-quarter operating income to decline 8% to $18.775 billion.
Key facts
- Income from operations for the second quarter of 2026 was $18.78 billion, a decrease of $1.67 billion, or 8%, compared to the second quarter of 2025.
- We recognized $13.69 billion of share-based compensation expense and $12.35 billion of depreciation and amortization expense during the six months ended June 30, 2026 as adjustments to net income for operating cash flow.
- The increase in costs and expenses was primarily due to increases in employee compensation, including severance expenses; infrastructure expenses related to our data centers, technical infrastructure, and third-party cloud services; legal-related costs; and third-party AI token costs.
- During the six months ended June 30, 2026, 87% of total costs and expenses were recognized in FoA and 13% were recognized in RL.
- The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures.
- On an ongoing basis, we evaluate our accounting estimates based on historical experience and on various other assumptions that we believe are reasonable under the circumstances.
- The actual impact on our financial performance could differ from these estimates under different assumptions or conditions.
- Our condensed consolidated financial statements are prepared in accordance with GAAP.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -11.7% | We recognized $13.69 billion of share-based compensation expense and $12.35 billion of depreciation and amortization expense during the… |
| operating_income | negative | realized | -10.6% | We recognized $13.69 billion of share-based compensation expense and $12.35 billion of depreciation and amortization expense during the… |
| cash | positive | realized | +3.0% | We recognized $13.69 billion of share-based compensation expense and $12.35 billion of depreciation and amortization expense during the… |
| cash | positive | realized | +2.7% | We recognized $13.69 billion of share-based compensation expense and $12.35 billion of depreciation and amortization expense during the… |
| operating_income | negative | realized | -1.4% | Income from operations for the second quarter of 2026 was $18.78 billion, a decrease of $1.67 billion, or 8%, compared to the second… |