Mark Zuckerberg reports Meta's lower-than-expected revenue forecast and significant AI infrastructure spending.
Mark Zuckerberg reported that Meta issued a weaker-than-expected revenue forecast for the current quarter, with guidance between $61 billion and $64 billion. The company's free cash flow dropped significantly to $784 million, down from $8.55 billion a year ago, primarily due to heavy investments in artificial intelligence infrastructure. Meta's total costs and expenses rose 55% year-over-year to $42.03 billion, which included $2.4 billion in legal charges and $1.18 billion in severance costs from recent layoffs. However, Finance Chief Susan Li noted that operating income would have increased by 9% if those specific charges were excluded. The company is aggressively pursuing a new AI strategy, including the market debut of the Muse Spark 1.1 model. To support this growth, Meta is expanding its data center footprint, including a new $14 billion project in El Paso, Texas, with BlackRock. Despite these investments, Meta shares have declined 11% for the year, underperforming the Nasdaq, which has risen 5% over the same period.