Meta Platforms, Inc. (META) FY2025 10-K and Q2 FY2026 10-Q Summary

Business

From the FY2025 Form 10-K, accession 0001628280-26-003942.

Meta builds products that let people connect and share through mobile devices, personal computers, VR headsets and AI glasses. Management frames the current strategy around artificial intelligence, including an explicit goal of "personal superintelligence," which the company defines as AI that surpasses human intelligence, layered on top of a mature advertising business. Meta was incorporated in Delaware in July 2004 and went public in May 2012; Class A shares trade on Nasdaq under "META." Headquarters are in Menlo Park, California.

Two reportable segments.

• Family of Apps (FoA), Facebook, Instagram, Messenger, WhatsApp, Threads, Meta AI and other services. Substantially all of Meta's revenue comes from selling advertising placements here. Ads appear on Facebook, Instagram, Messenger, Threads and WhatsApp as well as third-party applications and websites. FoA "Other revenue" comes from paid messaging on WhatsApp, subscriptions (including Meta Verified), net fees from developers using Meta's Payments infrastructure, and miscellaneous sources.
• Reality Labs (RL), consumer hardware, software and content: Meta Quest VR devices and the Meta Horizon Store; AI glasses including Ray-Ban Meta and Oakley Meta; Meta Ray-Ban Display, introduced in 2025, which pairs AI glasses with an in-lens display and ships with the Meta Neural Band, a wrist-worn electromyography device for neuromuscular control. Longer-dated AR work includes the Orion prototype unveiled in 2024. For 2026 Meta expects roughly 70% of RL operating expenses to go to wearables and 30% to VR and Horizon.

Scale of the two businesses in 2025. FoA revenue of $198.76 billion against $96.29 billion of costs and expenses; RL revenue of $2.21 billion against $21.40 billion of costs and expenses. FoA absorbed 82% of total costs and expenses, RL 18%. Management states plainly that it expects RL to keep operating at a loss for the foreseeable future and that its ability to fund the effort depends on profits generated elsewhere in the business.

2026 investment priorities named in the 10-K: AI; Reels and the discovery engine; wearables; monetization; youth; platform integrity and community support; and infrastructure capacity.

How the advertising business works. Most marketers buy through a self-service platform; a global sales force covering offices in more than 90 cities supports larger advertisers, agencies and resellers. Impression-based ads are recognized as impressions are delivered; action-based ads when the contracted user action occurs. Average price per ad is total advertising revenue divided by ads delivered. RL products reach customers through retailers, resellers and distributors as well as Meta.com and Meta stores.

Technology and infrastructure. Meta designs and builds its own data centers and much of its technical infrastructure, while a substantial portion is also supplied by third parties. Management is explicit that frontier AI model development has driven a step-change expansion in computing needs, and that delivering products depends on continued availability of components, power and network capacity. Meta has a history of open-sourcing AI work, including the Llama foundation models, and expects to keep training a mix of open and closed models.

Competition. Meta competes for users, advertisers and developers with online connection/sharing/communication products and with advertising platforms; it also competes directly in frontier AI model development and in consumer hardware, AR and VR.

People. Global workforce of 78,865 as of December 31, 2025, up 6% year over year, with offices in more than 90 cities. Compensation is salary plus bonus or sales incentive plus equity, with equity granted at hire and annually. The company notes it has periodically undertaken cost-reduction efforts including layoffs and restructurings.

Intellectual property. Protection rests on a combination of patents, trademarks, copyrights, trade secrets, license agreements and contractual rights; Meta states its proprietary technology is not dependent on any single patent or group of related patents.

Risk factors

From the FY2025 Form 10-K, accession 0001628280-26-003942, updated where noted by Part II, Item 1A of the Q2 2026 Form 10-Q, accession 0001628280-26-050705.

Product and demand

• User growth and engagement. Financial performance is determined largely by adding, retaining and engaging users who see ads, particularly on Facebook and Instagram. Meta has experienced and expects further fluctuations and declines in its active user base in some markets, especially where penetration is already high. Competitive products, TikTok named specifically, have reduced some users' engagement. Access to Facebook and Instagram was restricted and then prohibited in Russia following the war in Ukraine.
• Advertiser concentration in the revenue mix. Substantially all revenue is advertising. Any loss of marketers or reduction in their spending would seriously harm the business.
• Erosion of ad-targeting signals. Meta depends on data signals from user activity on sites and services it does not control. Regulatory change (GDPR and its evolving CJEU interpretation, the ePrivacy Directive, the DSA, the DMA, U.S. state privacy laws, youth-access laws) and platform change (Apple's 2021 iOS data-use changes; Google) have reduced and are expected to keep reducing the effectiveness of targeting and measurement, with a direct effect on marketer budgets.
• Mobile operating system dependence. Growth, engagement and monetization depend on operating effectively with mobile platforms Meta does not control.
• New products may not work. Product changes may fail to engage users, marketers or developers, or fail to justify the investment.

AI and Reality Labs, the two large discretionary bets

• AI initiatives. Meta has made large and growing AI investments and expects continued increases in infrastructure and headcount, and, added in the Q2 2026 update, that infrastructure investment tied to AI has already increased significantly and will keep rising. Named risks: harmful or illegal content, accuracy, misinformation and deepfakes, bias, discrimination, toxicity, consumer protection, product liability, IP infringement, model extraction or theft (added in the Q2 2026 version), defamation, privacy, cybersecurity, and sanctions and export controls. Meta discloses it has been the subject of media and government scrutiny over AI and AI chatbots, including inquiries and investigations by the FTC, members of Congress and state attorneys general. Competitors' AI features may be similar, superior or cheaper. Model training depends on data availability and cost, on specialized personnel in a tight talent market, and on third-party processing hardware, network capacity, computing power and energy, none of whose availability or pricing Meta controls. Open-sourced models may be misused by third parties Meta cannot see or control.
• Reality Labs. The metaverse may not develop as expected; Meta has relatively limited experience in consumer hardware and AR/VR; some RL products depend on third-party mobile platforms that do not offer the same interoperability they give their own competing products; and RL diverts resources and management attention. Reality Labs reduced 2025 overall operating profit by approximately $19.19 billion, and Meta expects full-year 2026 RL operating losses to remain similar to 2025.
• Investment burden on margins and, in the Q2 2026 wording, on cash flows. The 10-K risk factor states that AI and Reality Labs investments have the effect of reducing operating margin and profitability. The Q2 2026 version broadens this to "cash flows, operating margin and profitability" and adds a new sentence: Meta "has incurred significant indebtedness and other contractual commitments, including lease obligations, to finance these investments and expect[s] to continue to incur additional obligations." Financings may not be available on favorable terms; additional debt raises fixed obligations and interest expense; equity issuance dilutes.
• Decisions that do not prioritize short-term results. Meta explicitly makes product decisions that reduce near-term monetization, the "Your Activity off-Meta Technologies" control, feed ranking changes, ad load changes, and the continued promotion of Reels, which management expects to keep monetizing at a lower rate than Feed and Stories for the foreseeable future.

Operations and financial results

• Competition across every part of the business, now explicitly including frontier AI models.
• Quarterly volatility. Results fluctuate and are difficult to predict.
• Technical infrastructure. Growth depends on scaling infrastructure, network capacity, computing power and energy. Meta discloses it has experienced difficulty building and operating key portions of its infrastructure and has changed, suspended and terminated projects. It relies on components manufactured by a small number of third parties, often concentrated in a single region such as Asia; tariffs, sanctions, export controls and other trade measures could restrict supply. Undetected design or implementation issues may only surface after equipment is in full use, degrading experience or increasing cost, or impairing balance-sheet assets.
• Metric accuracy. DAP is a modeled estimate with an error margin management expects to run at roughly 3% of worldwide DAP; actual unique-people counts could vary significantly and potentially beyond that margin. Age data is acknowledged to be unreliable because a disproportionate number of younger users register with an inaccurate age.
• International operations, consumer-hardware design/manufacturing/supply chain, and inventory risk on hardware products.
• Litigation. Meta is a target of numerous class actions where plaintiffs claim enormous damages even where per-user harm is small; it names advertising, antitrust, privacy, security, biometrics, content, algorithms, copyright, user well-being, younger users, employment and consumer protection claims, and notes rising litigation over services to younger users.
• Acquisitions and strategic transactions. Regulatory challenge is a stated obstacle, Giphy was divested in 2023 following a UK CMA order, and the FTC sought to enjoin the Within Unlimited acquisition. Integration may fail; undiscovered liabilities may surface.
• Tax. IRS transfer-pricing assessments issued in 2016 and 2018 covering the 2010–2013 tax years are in litigation. Effective tax rates are volatile and sensitive to jurisdictional profit split, valuation allowances, share-based compensation and legislative change.
• Goodwill and intangible impairment; key-personnel loss; share repurchase and dividend programs carry no guarantee of continuation.

Government regulation and enforcement

• Country-level restriction. Access is restricted in whole or part in China, Iran and North Korea; Hong Kong's National Security Law (plus 2024 additions) could restrict products; Facebook and Instagram are prohibited in Russia. Meta discloses it generates meaningful revenue from a small number of resellers serving China-based advertisers, which Chinese, U.S. or other government action, including tariffs, could reduce or eliminate. Turkey is named as a similar exposure.
• Privacy, data and content regimes. GDPR and UK GDPR, ePrivacy, DMA, DSA, the UK Online Safety Act, the EU AI Act, the UK DMCC, Korea's PIPA, India's DPDP Act, CCPA/CPRA and a growing set of U.S. state privacy and youth laws. EU–U.S. transfers rest on the EU-U.S. Data Privacy Framework; Meta states that a further CJEU invalidation "could create considerable uncertainty and lead to us being unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe."
• The European consent model. After moving the legal basis for behavioral advertising in the EU/EEA/Switzerland from "legitimate interests" to "consent," Meta launched a "subscription for no ads" alternative in November 2023 and a less personalized ads (LPA) option in November 2024. The European Commission ruled in April 2025 that the subscription model does not comply with the DMA. Meta has appealed but warns that further mandated modifications during the appeal "could result in a materially worse user experience for European users and a significant impact to our European business and revenue."
• The FTC consent order. The July 2019 settlement and modified consent order took effect in April 2020 and required a $5.0 billion penalty and a comprehensive privacy program with board oversight, reporting obligations and independent third-party assessment. The FTC has initiated an administrative proceeding alleging deficient compliance and COPPA violations and seeking, among other things, a prohibition on using minors' data for any commercial purpose, changes to board composition, and significant limits on modifying and launching products. Meta is challenging this at the agency and in federal court; if unsuccessful, the effect on product launches and use of under-18 data would be material.
• Youth-access laws. Arkansas, California, Colorado, Florida, New York, Texas and Utah among others restrict services to minors without parental consent; enforcement of several is enjoined or stayed but those injunctions may not hold. Australia bans social media for users under 16. EU member states are weighing mandatory age verification and minor bans.
• Intermediary liability. In June 2025 the Brazilian Supreme Court partially invalidated Brazil's intermediary liability framework; the replacement requires removal of unlawful content on private notice and preventive measures, with civil liability for non-compliance. Meta expects product and operational changes in Brazil and possible increased litigation. Section 230 protections in the U.S. remain contested. In Canada, Meta ended news availability on Facebook and Instagram in response to legislation requiring payment to publishers.
• Payments regulation across anti-money-laundering, money transmission, stored value, electronic funds transfer, virtual currency, sanctions and export restrictions.

Data, security and intellectual property

Security breaches and improper access to data; intentional misuse of services by third parties; software and hardware errors, bugs or vulnerabilities; inability to protect IP; and patent, trademark and copyright suits, including, as detailed below, a large body of AI-training copyright litigation where U.S. statutory damages are computed per work.

Ownership structure

The dual-class structure concentrates voting control with the founder, Chairman and CEO, who controls a majority of voting power. Meta is a "controlled company," which it flags as potentially making Class A stock less attractive to some investors. Class A stock has been and is expected to remain volatile. Delaware law and charter/bylaw provisions could impede a merger, tender offer or proxy contest.

Management's discussion and analysis, full year 2025

From the FY2025 Form 10-K, accession 0001628280-26-003942.

Headline results. Total revenue of $200.97 billion, up 22% from 2024. Income from operations of $83.28 billion, up $13.90 billion or 20%, with a 41% operating margin (42% in 2024). Net income of $60.46 billion and diluted EPS of $23.49, note that net income fell year over year from $62.36 billion despite the 20% gain in operating income, entirely because of tax (see below).

Segment results. FoA revenue $198.76 billion (+22%) with income from operations of $102.47 billion (+18%) at a 52% margin, down from 54%. RL revenue $2.21 billion (+3%) with a loss from operations of $19.19 billion, an 8% wider loss than 2024's $17.73 billion. RL revenue growth came from AI glasses, partly offset by declining Meta Quest sales; the wider loss came from employee compensation, estimated losses on non-cancelable RL inventory purchase commitments, and technology development.

Revenue drivers. Advertising revenue of $196.18 billion rose 22%, from a 12% increase in ad impressions delivered and a 9% increase in average price per ad. Impressions grew in all regions, most in Asia-Pacific. The price increase reflects stronger advertising demand, which management attributes mostly to improving ad performance from targeting and measurement tools, partly offset by a higher mix of impressions in geographies and products (Reels) that monetize at lower rates. Online commerce was the largest vertical contributor. FoA Other revenue of $2.58 billion rose 50%, driven by WhatsApp paid messaging and Meta Verified. By user geography, 2025 revenue rose 21% in United States & Canada, 24% in Europe, 20% in Asia-Pacific and 27% in Rest of World. Currency was a modest headwind: at constant rates, 2025 total revenue would have been $201.38 billion and advertising revenue $196.60 billion, $418 million and $420 million higher respectively.

Family metrics. Worldwide DAP averaged 3.58 billion during December 2025, up 7% from 3.35 billion in December 2024. Annual worldwide ARPP was $57.03, up 15%.

Cost lines. Cost of revenue rose 20% on data center and technical infrastructure operating expense, moderated by a lower depreciation growth rate after the January 2025 extension of the estimated useful life of most servers and network assets to 5.5 years, effective January 1, 2025. R&D rose 31% on compensation and AI-related infrastructure, with 8% growth in engineering and technical headcount plus higher share-based compensation. Marketing and sales rose 6% on platform-integrity professional services. G&A rose 25%, mainly on legal costs and on lapping a $1.55 billion decrease in accrued legal losses that had benefited 2024.

Tax, the dominant 2025 distortion. The One Big Beautiful Bill Act, enacted July 4, 2025, introduced immediate expensing of domestic R&D and certain capital expenditures and an enhanced foreign-derived intangible income deduction effective 2026, but limited the benefit through the 15% Corporate Alternative Minimum Tax. Meta recorded a $15.93 billion charge in Q3 2025, of which $14.03 billion was a valuation allowance against U.S. federal deferred tax assets at the enactment date. The 2025 effective tax rate was 30% versus 12% in 2024; absent the valuation allowance charge it would have been 13%. Management guided to a 13–16% effective rate for full-year 2026. Net uncertain tax positions were $11.23 billion at year-end, predominantly research tax credits and transfer pricing with foreign subsidiaries.

Cash flow and capital. Operating cash flow of $115.80 billion. Purchases of property and equipment of $69.69 billion plus $2.52 billion of finance-lease principal payments left free cash flow (as Meta defines it) of $43.59 billion, down from $52.10 billion in 2024 despite far higher operating cash flow, because capital spending roughly doubled. Investing also included $18.33 billion of purchases of non-marketable equity investments and $10.05 billion of net marketable securities purchases. Financing included $26.25 billion of buybacks, $18.40 billion of taxes paid on net share settlement of RSUs and $5.32 billion of dividends, against $29.91 billion of net proceeds from senior unsecured notes issued in November 2025.

Balance sheet and commitments at December 31, 2025. Cash, cash equivalents and marketable securities of $81.59 billion, up $3.78 billion. Long-term debt of $58.74 billion carrying value on $59.0 billion aggregate principal, maturing 2027 through 2064, with $2.98 billion of short-term and $56.74 billion of long-term future interest obligations. Leases not yet commenced totaled approximately $103.77 billion, mostly data centers, colocations and network infrastructure, commencing 2026–2030. Contractual commitments of $131.05 billion, mostly third-party cloud capacity and servers/network infrastructure/data centers/RL hardware, with $30.63 billion due in 2026. Non-marketable equity investments under the measurement alternative carried at $20.08 billion (versus $6.02 billion a year earlier) and equity-method investments at $7.45 billion (versus $52 million), a large expansion in one year. Marketable equity securities were $5.99 billion versus $1.23 billion.

Capital return. In 2025 Meta repurchased and retired 40 million Class A shares for $26.26 billion, with $25.03 billion remaining authorized at year-end. The quarterly dividend was raised from $0.50 to $0.525 per share beginning in Q1 2025; total dividends and dividend equivalents paid were $5.32 billion.

2026 capital expenditure guidance given in the 10-K: approximately $115 billion to $135 billion, to support AI efforts and the core business.

Critical accounting estimates: loss contingencies, income taxes, and valuation of non-marketable equity investments.

Market risk. A hypothetical 100 basis point rise in market rates would have reduced the market value of available-for-sale debt securities and cash equivalents by $711 million. Fixed-rate notes are carried at amortized cost, so rate moves affect fair value but not the income statement. A hypothetical 10% adverse move would cut marketable equity securities by $599 million. Foreign currency transaction gains, net were $352 million in 2025 against losses of $690 million in 2024.

Current quarter, three and six months ended June 30, 2026

From the Form 10-Q for the quarter ended 2026-06-30, accession 0001628280-26-050705.

The quarter in one line: revenue accelerated, operating income fell.

Q2 2026 revenue was $60.80 billion, up 28% year over year (up 27% at constant currency). Income from operations was $18.78 billion, down $1.67 billion or 8%, with the operating margin compressing to 31% from 43%. Net income was $15.85 billion and diluted EPS $6.18, against Q2 2025 net income of $18.34 billion and diluted EPS of $7.14. For the six months, revenue was $117.11 billion (+30%), income from operations $41.65 billion (+10%) and net income $42.62 billion, the last flattered by a large tax benefit.

Segments. FoA revenue of $60.37 billion (+28%) but income from operations of $23.39 billion, down 6%, with margin falling from 53% to 39%. RL revenue of $431 million (+16%) against a $4.62 billion loss from operations, 2% wider. For the six months FoA income from operations was $50.29 billion (+8%) and the RL loss was $8.65 billion, 1% narrower than the prior-year six months. RL represented 13% of total costs and expenses in the first half of 2026, down from 18% for full-year 2025.

Where the cost growth came from. Cost of revenue +33% on data center, technical infrastructure and third-party cloud services. R&D +67% on compensation (higher share-based compensation and severance), infrastructure including third-party cloud, and third-party AI token costs, a cost category that did not appear in the FY2025 10-K's cost descriptions and is now cited across R&D and marketing. Marketing and sales +15% on third-party AI token costs and severance. G&A +111%, driven primarily by $2.40 billion of charges related to legal proceedings recorded in the quarter.

Headcount reduction. Headcount was 75,472 at June 30, 2026, down 1% year over year and down from 78,865 at the end of 2025. Employee compensation for the quarter included $1.18 billion of severance expenses related to a May 2026 headcount reduction of approximately 8,000 employees, affecting both FoA and RL. Reported headcount still includes most of those employees; the majority will drop out by the end of Q3 2026.

Family metrics. DAP averaged 3.60 billion during June 2026, up 3% from 3.48 billion in June 2025, a marked deceleration from the 7% growth reported for December 2025. The filing attributes a slight DAP decline in Q1 2026 to internet disruptions in Iran, largely restored in Q2 2026, and to a restriction on access to WhatsApp in Russia. Q2 2026 ARPP was $16.86, up 24% year over year. Ad impressions delivered rose 14% and average price per ad rose 12% in the quarter (16% and 12% respectively for the six months). Revenue by user geography rose 32% in United States & Canada, 24% in Europe, 19% in Asia-Pacific and 36% in Rest of World.

Currency turned into a tailwind. At constant rates, Q2 2026 total revenue would have been $60.12 billion and advertising revenue $58.67 billion, $685 million and $693 million lower than reported. For the six months the constant-currency shortfall was $2.43 billion on each measure.

Below the operating line. Interest expense rose 225% to $783 million in the quarter on higher debt balances. Interest and other income (expense), net was negative $19 million for the quarter and negative $1.14 billion for the six months, the latter driven by unrealized losses on marketable equity investments partly offset by unrealized gains on non-marketable equity investments.

Tax. The Q2 effective rate was 16%, up from 11%, because U.S. benefits from foreign-derived deduction eligible income and excess share-based compensation benefits are limited by the CAMT regime in 2026. For the six months the company recorded a net tax benefit of $2.11 billion (an effective rate of negative 5%) because of U.S. Treasury Notice 2026-7, which provided CAMT relief related to expensing previously capitalized U.S. R&D costs. Management guides to a 15–17% effective rate for the remaining quarters of 2026. In January 2026 the OECD introduced a "Side-by-Side Safe Harbor" allowing U.S.-headquartered companies to remain subject only to U.S. global minimum taxes (CAMT) while being exempted from Pillar Two; Meta does not expect a material 2026 impact.

Liquidity, debt and the scale of committed spending. Cash, cash equivalents and marketable securities were $90.26 billion at June 30, 2026, up $8.67 billion from year-end. Operating cash flow for the six months was $64.09 billion; purchases of property and equipment were $49.11 billion and net purchases of marketable securities $31.56 billion. Financing was a net source of $9.41 billion, driven by $24.91 billion of net proceeds from the May 2026 notes.

• Long-term debt: $83.66 billion carrying value on $84.00 billion face, up from $58.74 billion at year-end. In May 2026 Meta issued $25.00 billion of fixed-rate senior unsecured notes in six series, with stated rates of 4.55%–6.45% and maturities from 2031 to 2066. The 8-K filed 2026-05-04 (accession 0001193125-26-204128) itemizes the offering completed May 4, 2026: $3.0 billion of 4.550% notes due 2031, $2.0 billion of 4.875% due 2033, $6.0 billion of 5.250% due 2036, $4.0 billion of 6.200% due 2046, $6.0 billion of 6.300% due 2056 and $4.0 billion of 6.450% due 2066. Total notes now mature 2027 through 2066; $2.75 billion comes due in 2027 and $73.75 billion after 2030. Future interest obligations were $4.40 billion short-term and $84.98 billion long-term. There are no financial covenants. Estimated fair value of the notes was $79.75 billion against $84.00 billion face.
• Leases not yet commenced: approximately $278.99 billion at June 30, 2026 (versus $103.77 billion at December 31, 2025), for data centers, colocations and network infrastructure, commencing from the remainder of 2026 through 2036 with terms up to 30 years.
• Non-cancelable contractual commitments: $349.31 billion (versus $131.05 billion at year-end), mostly third-party cloud capacity and servers, network infrastructure, data centers and RL hardware, with approximately $53.52 billion due in 2026 and $81.65 billion in 2027. On top of that, contingent obligations to purchase up to $14.72 billion of cloud capacity over five years, reducible if the provider resells the capacity.
• Restricted cash: $10.80 billion of money market funds was reclassified from unrestricted to restricted during the half, tied to escrow requirements under multi-year infrastructure purchase agreements; total restricted cash equivalents were $13.55 billion. The escrowed funds are expected to be released between 2028 and 2030 as the underlying purchase obligations are satisfied.
• Property and equipment gross rose to $292.87 billion from $233.73 billion in six months, with construction in progress at $80.35 billion (from $50.52 billion) and servers and network assets at $119.68 billion (from $98.04 billion). Net PP&E was $225.72 billion. Depreciation was $6.00 billion in the quarter versus $4.28 billion a year earlier.

2026 capital expenditure guidance was raised to approximately $130 billion to $145 billion, from the $115–135 billion range in the 10-K.

Capital return has stopped on the buyback side. Meta repurchased no Class A shares during the six months ended June 30, 2026; $25.03 billion remains authorized, unchanged from year-end. Dividends and dividend equivalents of $2.70 billion were paid in the half.

Off-balance-sheet data center structures. Non-marketable equity investments totaled $30.16 billion at June 30, 2026 ($20.75 billion measurement alternative, $9.41 billion equity method). Equity-method holdings include an October 2025 arrangement to co-develop a data center campus in Louisiana in which Meta holds a 20% membership interest; the parties have committed to fund their pro rata share of approximately $27 billion of estimated development costs. Meta's lease agreements with that venture begin in 2029 with an aggregate initial lease commitment of approximately $12.31 billion, four-year initial terms and renewals up to 20 years, plus residual value guarantees with an aggregate threshold of approximately $28 billion that declines over time. Meta concluded it is not the primary beneficiary and does not consolidate the variable interest entity. Carrying value of the equity investment was $2.92 billion, but maximum exposure to loss related to the venture was $46.03 billion. Other unconsolidated VIEs carried a further $6.41 billion of maximum exposure.

El Paso held-for-sale assets. In March 2026 Meta approved a plan to dispose of certain data center assets with a carrying value of $1.48 billion, mostly construction in progress and land, via contribution to a third party to co-develop data centers in El Paso, Texas. At June 30, 2026 held-for-sale assets, net, were $2.03 billion, and $1.27 billion of Family of Apps goodwill had been reclassified to held-for-sale with no impairment recognized.

Board. Hock E. Tan and Tracey T. Travis notified the company on April 8, 2026 that they would not stand for re-election at the 2026 Annual Meeting (8-K filed 2026-04-14, accession 0001628280-26-025108).

Legal, regulatory and contingency picture as of the Q2 2026 report

From Part I, Item 1, Note 9 and Part II, Item 1 of the Form 10-Q, accession 0001628280-26-050705, with background from Part I, Item 3 of the FY2025 Form 10-K, accession 0001628280-26-003942.

Meta states that the number and potential significance of litigation and investigations have increased over the last several years and that the maximum aggregate monetary damages or penalties sought across its various legal proceedings could amount to up to hundreds of billions of dollars and could be material to the financial condition of the company. It also discloses that it has accrued significant amounts for loss contingencies related to European regulatory inquiries and that additional accruals could be material individually or in aggregate. Q2 2026 G&A included $2.40 billion of legal-proceeding charges.

Youth-related litigation, the most active front.

• First personal-injury bellwether (Judicial Council Coordination Proceeding No. 5255, Los Angeles County Superior Court): trial began January 27, 2026; on March 25, 2026 a jury awarded $6 million in compensatory and punitive damages between Meta and YouTube, allocated 70% to Meta and 30% to YouTube. Meta has appealed. The next two user bellwether trials are set for October 28, 2026.
• New Mexico Attorney General (First Judicial District Court): trial began February 2, 2026; on March 24, 2026 a jury ordered Meta to pay a $375 million civil penalty. A bench trial on the public nuisance claim and injunctive relief was held in May 2026; the AG is seeking $953 million in abatement costs plus extensive injunctive terms. No decision yet. A separate New Mexico AG case, expanded to include content moderation claims, is scheduled for trial September 8, 2026, in which the AG has indicated it intends to seek up to $62.85 billion in penalties.
• Tennessee Attorney General: trial began July 20, 2026.
• Multidistrict litigation (N.D. Cal.): the first state-attorneys-general trial is scheduled for August 12, 2026, covering claims by four states plus a federal disgorgement claim asserted by all 29 state AGs in the MDL. Meta settled the first school district bellwether in May 2026; the next is set for February 2027.
• Across these cases, plaintiffs have indicated they could seek damages, disgorgement or penalties "up to more than a trillion dollars" in certain cases, along with injunctive relief that would materially change how Meta provides its services. Counsel for over two hundred thousand individual claimants have sent mass arbitration demands relating to alleged Instagram "social media addiction."
• The European Commission's DSA proceedings on minors (opened May 16, 2024) produced preliminary findings on April 29, 2026 and July 10, 2026 that users under 13 are present on Facebook and Instagram and that both platforms present potentially addictive design features.

Privacy.

• The California AG consumer-protection settlement, entered in December 2025, was approved by the court in March 2026.
• The FTC's administrative proceeding to modify the 2020 consent order remains stayed pending resolution of Meta's two judicial challenges; supplemental briefing in the district court was completed in May 2026, and a status update in the constitutional challenge is due the earlier of 30 days after a decision in the jurisdictional case or September 8, 2026.
• The Irish Data Protection Commission's €1.2 billion fine over EEA-to-U.S. transfers remains under appeal and stayed by the Irish High Court.
• Frasco v. Flo Health: an August 1, 2025 jury verdict found liability under Section 632 of the California Invasion of Privacy Act for a California subclass; plaintiffs seek $5,000 statutory damages per class member against an asserted class of up to approximately 1.25 million members. In Meta Pixel Tax Filing Cases, class certification was denied March 30, 2026.

Competition.

• FTC v. Meta Platforms (Instagram/WhatsApp monopolization): the court granted judgment in Meta's favor on November 18, 2025; the FTC filed a notice of appeal on January 20, 2026.
• Klein advertiser class action: summary judgment motion pending. The user action was resolved in Meta's favor September 29, 2025 and is on appeal.
• European Commission Facebook Marketplace tying decision: €798 million fine, appealed January 28, 2025.
• European Commission DMA decision on the "subscription for no ads" model: €200 million fine, appealed July 4, 2025, with the risk of further imposed modifications during the appeal.
• Spain, AMI v. Meta Ireland: November 19, 2025 judgment awarded approximately €542 million in damages on unfair competition (abuse of dominance not established); under appeal. A related Spanish claim (UTECA) goes to trial October 2026 and a French claim (Amaury et al., now with 34 additional intervening plaintiffs) is expected in 2027. The UK CAT class action (Lovdahl-Gormsen) is now scheduled for trial in October 2028, pushed back from the September 2027 date given in the 10-K.
• New since the 10-K: in December 2025 the European Commission opened an antitrust investigation into Meta's policy of barring general-purpose AI providers from using the WhatsApp Business API for chatbot services. In June 2026 the Commission imposed an interim measure requiring WhatsApp to offer that API access free of charge to such providers. Meta intends to appeal. Similar competition investigations are underway in Africa, Brazil and Turkey.

AI training and copyright. In Kadrey v. Meta Platforms the court granted Meta summary judgment on fair use as to the named plaintiffs on June 25, 2025; remaining claims of copyright infringement and contributory infringement over alleged distribution of books during downloading proceed, with summary judgment motions now scheduled for February 25, 2027 (moved out from July 2026). A wave of additional cases filed from November 2025, Entrepreneur Media, Carreyrou, TED Entertainment, Chicken Soup for the Soul, Beaulier, Cognella, Elsevier, Hobbs, Sullivan, is in progress, with summary judgment in four of them set for February 25, 2027 and trial in Entrepreneur Media scheduled for May 24, 2027. Meta notes that U.S. statutory copyright damages are computed per work, which given training-data volumes may produce substantial damages.

Securities. In In re Facebook, Inc. Securities Litigation the district court granted in part and denied in part Meta's motion to dismiss the fourth amended complaint on February 27, 2026. In In re Meta Platforms, Inc. Securities Litigation, plaintiffs filed a second amended complaint on February 13, 2026 adding claims regarding encryption and age verification practices; Meta moved to dismiss on March 30, 2026. The stockholder derivative action over historical platform and user data practices (In re Facebook Inc. Derivative Litigation, Delaware Court of Chancery) reached a settlement in principle on July 17, 2025, subject to court approval, per the FY2025 Form 10-K, accession 0001628280-26-003942; the Q2 2026 Form 10-Q does not address the matter. Per the Form 8-K filed 2025-12-12, accession 0001628280-25-056768, the Court of Chancery entered a scheduling order on December 5, 2025 setting a settlement approval hearing for April 7, 2026, and the parties' settlement stipulation is dated November 20, 2025. The outcome of that hearing is not disclosed in the filings covered here.

Other. European Commission DSA proceedings opened April 30, 2024 produced preliminary findings on October 24, 2025 that Meta infringed obligations on illegal-content notice-and-action mechanisms, content moderation appeals and researcher data access. Meta continues to face inquiries relating to advertising and content, financial scams, drugs, fraud and discrimination, and law-enforcement disclosure disputes in Brazil, Russia and elsewhere.

Subsequent events

From Note 13 to the condensed consolidated financial statements and related disclosures in the Form 10-Q for the quarter ended 2026-06-30, accession 0001628280-26-050705.

El Paso data center joint venture. In July 2026 Meta entered into an exclusivity agreement to co-develop a data center campus in El Paso, Texas, through a venture in which Meta would hold a 20% membership interest. The transaction is subject to execution of definitive agreements and customary closing conditions. Upon closing, expected in the third quarter of 2026, Meta estimates it will:

• contribute approximately $2.3 billion of held-for-sale assets, net of liabilities, consisting mostly of construction in progress and land;
• receive a one-time distribution of approximately $1 billion;
• enter into lease agreements for the use of properties to be developed on the campus; and
• provide residual value guarantees with a maximum aggregate exposure of approximately $13 billion.

This is the transaction the held-for-sale classification recorded in March 2026 anticipated, $2.03 billion of net held-for-sale assets and $1.27 billion of reclassified goodwill on the June 30, 2026 balance sheet. Counterparty name and consideration beyond the items above are not disclosed in the filing.

Additional data center leases. In July 2026 Meta entered into additional data center leases with lease obligations of approximately $68 billion, expected to commence in 2027 and 2028, with lease terms of 18 to 20 years. These are on top of the approximately $278.99 billion of not-yet-commenced lease obligations recorded as of June 30, 2026.

Litigation. In the California personal-injury coordinated proceeding, the second user bellwether trial scheduled for July 27, 2026 was dismissed on the plaintiff's motion and the trial date vacated by the court. The other post-June-30 trial dates in the youth-related cases are set out in the legal section above.

Beyond the items described above, the quarterly report discloses no post-period acquisitions, divestitures or financings.