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Meta Platforms:Quarterly Results/2025 Q2: Difference between revisions
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* Zuckerberg said advancements in recommendation systems have increased time spent on Facebook by 5% and 6% on Instagram. | * Zuckerberg said advancements in recommendation systems have increased time spent on Facebook by 5% and 6% on Instagram. | ||
* Zuckerberg said they are starting to see how they can deploy Business AI Agents in a number of countries and they are integrating it into ads on Facebook and Instagram as well as e-commerce websites. | * Zuckerberg said they are starting to see how they can deploy Business AI Agents in a number of countries and they are integrating it into ads on Facebook and Instagram as well as e-commerce websites. | ||
* Incorporation of LLMs on Threads recommendation system is now driving a meaningful share of time spent on Threads. | |||
* They are exploring how they can incorporate LLMs on other apps. | |||
* Enhancements made to Andromeda model in Q2 drove around 4% increase in conversions on Facebook mobile Feed and Reels. | |||
* Enhancements made to GEM increased ad conversions by around 5% on Instagram and 3% on Facebook Feed and Reels in Q2. | |||
* They began deploying Lattice to earlier stage ads ranking models in April and this led to a 4% increase in ad conversions on Facebook Feed and Reels in Q2. | |||
* Around 2 million Advantage+ advertisers are now using video generation features - Image Animation and Video Expansion. | |||
==== Meta AI ==== | ==== Meta AI ==== | ||
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* Zuckerberg reiterated that Meta AI has more than one billion monthly actives. | * Zuckerberg reiterated that Meta AI has more than one billion monthly actives. | ||
* Zuckerberg expect improvement in the LLM models to improve engagement in Meta AI. | * Zuckerberg expect improvement in the LLM models to improve engagement in Meta AI. | ||
* WhatsApp continues to be the largest driver of queries in Meta AI. | |||
==== AI Devices ==== | ==== AI Devices ==== | ||
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* The percent of users using Meta AI is growing and they are seeing increased AI retention as well. | * The percent of users using Meta AI is growing and they are seeing increased AI retention as well. | ||
* Zuckerberg said he thinks AI glasses will be the main way they will integrate superintelligence into people's lives. | * Zuckerberg said he thinks AI glasses will be the main way they will integrate superintelligence into people's lives. | ||
* Demand for Ray-Ban Meta glasses still outstrips supply for the most popular SKUs. | |||
==== Reality Labs ==== | ==== Reality Labs ==== | ||
* Zuckerberg said they are seeing more people spend time with Quest ecosystem and the community is growing. | * Zuckerberg said they are seeing more people spend time with Quest ecosystem and the community is growing. | ||
=== Q2 2025 Results === | |||
==== Expenses ==== | |||
* Cost of revenue rose 16%, driven by increased infrastructure costs and payment to partners, offset by increased useful life of servers. | |||
* R&D increased 23%, driven by increased infrastructure costs and employee compensation. | |||
* G&A fell 27%, driven by lower legal-related costs. | |||
==== Ad performance ==== | |||
* Online commerce vertical was the largest contributor to y/y growth in ad revenue. | |||
* Ad revenue growth was strongest in Europe (+24%) and Rest of World (+23%), followed by North America (+21%) and Asia-Pacific (+18%). | |||
* 11% growth in ad impressions was mainly driven by Asia-Pacific. | |||
* 9% growth in ad price benefited from strong ad demand, largely driven by improved ad performance. | |||
* Pricing decelerated from 10% in Q1 to 9% in Q2 due to accelerated impression in Q2. | |||
==== Engagement ==== | |||
* In Q2, Instagram video time was up 50% y/y globally. | |||
* Facebook video time spent in the US grew 20% y/y in Q2. | |||
* On Instagram, two-thirds of recommended content in the US now comes from original posts. | |||
=== WhatsApp monetization === | |||
* CFO Susan Li said they expect the introduction of ads in Status will be gradual this year and next year, with low levels of ads initially. | |||
* Li said they expect WhatsApp ads to fetch lower ad price than Facebook and Instagram for the foreseeable future given that WhatsApp is skewed towards lower monetization regions and limited data for ad tracking. | |||
* As such, they don't expect WhatsApp to be a meaningful contributor of revenue growth for the next few years. | |||
==== Business messaging ==== | |||
* Click-to-message revenue in the US grew more than 40% in Q2, driven by ramp in adoption of Website to Message ads. | |||
=== Outlook === | |||
* The new U.S. tax law will lead to reduction in the US tax rate in the remainder of the year and future years. | |||
* 2025 tax rate will be higher than Q2 tax rate. | |||
== Management guidance and analysts' estimates == | == Management guidance and analysts' estimates == | ||