Meta ad revenue jumps 27% but the AI bill is rising faster

265

Meta’s advertising revenue climbed 27% year on year to $59.36 billion in the second quarter of 2026, showing that artificial intelligence is already strengthening its core commercial engine. Total revenue rose 28% to $60.8 billion, supported by a 14% increase in ad impressions and a 12% rise in the average price per advertisement.

The results matter because Meta’s AI strategy is moving beyond product demonstrations and into advertising performance. Better recommendation systems, automated creative tools and campaign optimisation can help advertisers reach users more efficiently, while giving Meta room to charge more for inventory.

“AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” Meta founder and chief executive Mark Zuckerberg said.

Growth, however, came with a steep bill. Quarterly costs and expenses jumped 55% to $42.03 billion, while operating income fell 8% and net income declined 14% to $15.85 billion. Free cash flow dropped 91% to $784 million as Meta expanded data-centre capacity and other AI infrastructure.

“Meta’s AI spend was easier to celebrate when margins were expanding,” Forrester executive Mike Proulx told Reuters, warning that the costs are now visible in the company’s results.

For advertisers, the immediate signal is positive: Meta’s systems appear capable of delivering greater scale and stronger monetisation. The larger test is whether improved campaign performance keeps pace with rising prices and whether Meta can turn its infrastructure investment into businesses beyond advertising. Its ad machine is funding the AI expansion; investors now want evidence that AI can eventually fund itself.