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Meta Platforms:Quarterly Results/2025 Q2: Difference between revisions
→Q2 2025 Earnings Call Summary
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* Zuckerberg said they are making progress on Llama 4.1 and 4.2 and they are working on next generation of models that will push frontier of AI. | * Zuckerberg said they are making progress on Llama 4.1 and 4.2 and they are working on next generation of models that will push frontier of AI. | ||
* Zuckerberg pointed out that they are making investments because they believe superintelligence "is going to improve every aspect of what we do". | * Zuckerberg pointed out that they are making investments because they believe superintelligence "is going to improve every aspect of what we do". | ||
* Zuckerberg said he has gotten a little bit more convinced that a small team is the optimal setup for driving frontier research on Superintelligence (Q&A). | |||
==== | ==== Core AI impact on core business ==== | ||
* Zuckerberg said the strong performance this quarter was mainly due to AI. "On advertising, the strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ads system." | * Zuckerberg said the strong performance this quarter was mainly due to AI. "On advertising, the strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ads system." | ||
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* 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. | * 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. | * Around 2 million Advantage+ advertisers are now using video generation features - Image Animation and Video Expansion. | ||
* Zuckerberg said Meta teams are starting to use Llama 4 to build autonomous AI agents that will help to improve Facebook Algorithm to increase quality and engagement (Q&A). It's still a small step but the trajectory is optimistic. | |||
==== Open-sourcing AI ==== | |||
* Zuckerberg said he doesn't think their thinking on open-sourcing has changed much (Q&A). | |||
* Zuckerberg said they have always open-sourced some of their models and not all of them (Q&A). | |||
* Zuckerberg expects that they will continue sharing leading models except models that are too big or carry security risks (Q&A). | |||
==== Meta AI ==== | ==== Meta AI ==== | ||
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* The new U.S. tax law will lead to reduction in the US tax rate in the remainder of the year and future years. | * 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. | * 2025 tax rate will be higher than Q2 tax rate. | ||
* Li said infrastructure will be single largest contributor to 2026 expense growth (Q&A). | |||
* Li said they expect CapEx to be in short-lived assets in 2025 and 2026 than it has been in prior years (Q&A). | |||
* Zuckerberg said the infrastructure that they are building is really a massive investment (Q&A). | |||
* Li said they expect to finance a large part of the CapEx themselves but they are also looking to include external financing (Q&A). | |||
* Li said servers will be the biggest bulk of CapEx (Q&A). | |||
=== ROI on investments === | |||
* Li said they continue to see strong ROI on their CapEx spend on the core AI side (Q&A). | |||
* Li said they don't expect Gen AI work to be a meaningful driver of revenue this year or next year (Q&A). | |||
== Management guidance and analysts' estimates == | == Management guidance and analysts' estimates == | ||