The one number
$784 million.
That was Meta's ($META) free cash flow in the second quarter of 2026, on Meta's own definition, printed in Meta's own earnings release, on revenue of $60.80 billion. In the second quarter of 2025 the same figure was $8.5 billion.
In the second quarter of 2026 Meta paid $1.35 billion of dividends. That quarter, the dividend was not covered by free cash flow.
This is the number that changes the description. For the second quarter of 2026 it was not a cash machine buying back its own stock. It generated less free cash than it paid out, raised $24.91 billion of debt in May, and bought back nothing.
Meta's definition, from the release: free cash flow is net cash provided by operating activities, less purchases of property and equipment, less principal payments on finance leases. Meta adds that free cash flow "is not intended to represent our residual cash flow available for discretionary expenditures." The window matters too: over the first half of 2026 as a whole, free cash flow was $13.17 billion against $2,699 million of dividends. The uncovered dividend is a one-quarter fact.
Where the cash went
Operating cash flow did not fall. It rose 24.7% in the second quarter of 2026 against the second quarter of 2025, to $31.86 billion. Capital spending, including finance-lease principal, rose 82.7% to $31.08 billion over the same window, and took 97.5% of the operating cash.
| $ billions, Meta's own definitions | FY2024 | FY2025 | H1 2026 |
|---|---|---|---|
| Net cash from operating activities | 91.33 | 115.80 | 64.09 |
| Capex including finance-lease principal | 39.23 | 72.22 | 50.92 |
| Free cash flow | 52.10 | 43.59 | 13.17 |
Meta's 2026 capex guidance is $130 billion to $145 billion. It was first given in January at $115 to $135 billion, raised in April to $125 to $145 billion on "higher component pricing" and data center costs, and narrowed in July. The low end of the range is 12% more than Meta's entire FY2025 operating cash flow. With $50.92 billion spent in the first half, the guidance implies roughly $79 billion to $94 billion in the second half (our subtraction). Meta gives no operating cash flow guidance, so full-year free cash flow cannot be calculated from what it has disclosed. We are not estimating it.
The buyback stopped
Meta's Q2 2026 10-Q says it plainly: "we did not repurchase any shares of Class A common stock" in the six months to 30 June 2026, and $25.03 billion "remained available and authorized for repurchases." That is the same figure Meta reported at 31 December 2025 and 31 March 2026. No new authorisation has been announced.
Differencing Meta's own cumulative cash-flow statements puts the quarterly repurchases like this (the quarterly splits are our subtraction):
| Quarter | Class A repurchases, $m |
|---|---|
| Q1 2025 | 12,754 |
| Q2 2025 | 10,167 |
| Q3 2025 | 3,327 |
| Q4 2025 | 0 |
| Q1 2026 | 0 |
| Q2 2026 | 0 |
On those figures the last repurchase was in the third quarter of 2025, and Q2 2026 was the third straight quarter at zero. One quarter at zero is not new for Meta: Q4 2024 was also zero. Three in a row is.
The share count has turned with it. Class A shares on the cover went from 2,187,177,748 in the FY2025 10-K to 2,205,128,509 as of 24 July 2026, about 17.9 million more. Diluted weighted-average shares were 2,566 million in Q2 2026 against 2,570 million in Q2 2025, essentially flat.
The dividend, started at $0.50 on 1 February 2024 and raised to $0.525 for the first quarter of 2025, has not been raised since. The $0.525 declared on 10 September 2026 is the seventh straight quarter at that rate. The trailing yield at Friday's close is 0.28%.
The filings show that the buyback stopped. They do not say why.
What Meta earns now
Revenue is growing faster than profit. In the second quarter of 2026 against the second quarter of 2025:
| $ millions | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Revenue | 60,801 | 47,516 | +28.0% |
| Research and development | 21,656 | 12,942 | +67.3% |
| General and administrative | 5,609 | 2,663 | +110.6% |
| Income from operations | 18,775 | 20,441 | −8.2% |
| Net income | 15,848 | 18,337 | −13.6% |
| Diluted EPS | $6.18 | $7.14 | −13.4% |
Operating margin went from 43% to 31% as Meta printed it. Family of Apps, the advertising business, went from 53% to 39%.
Two items should come out before believing that, and both make the picture look better, not worse. General and administrative expense in Q2 2026 carried $2.40 billion of "charges related to legal proceedings," which Meta does not attribute to any named case. Add that back and Q2 2026 operating income was $21.18 billion, up 3.6% on Q2 2025. The Q2 10-Q also discloses $1.18 billion of severance costs from a reduction of about 8,000 positions in May 2026. Add that back as well and operating income grew more than 9%, on revenue up 28.0%. The compression is real after the one-offs. The driver is research and development, up 67%.
The half-year profit line needs care. Net income for the first half of 2026 was $42.62 billion, up 21.8% on the first half of 2025, but it includes a discrete tax benefit of $8.03 billion recognised in the first quarter of 2026 under US Corporate Alternative Minimum Tax transitional relief. The half's effective tax rate was negative 5%. Take out that one disclosed item and, on our arithmetic, first-half net income was slightly down on the first half of 2025.
Reality Labs lost $4.62 billion in the second quarter of 2026 on $431 million of revenue. Summing the annual segment figures Meta has reported since 2019, the first year it disclosed the segment, the cumulative operating loss through 30 June 2026 is $96.73 billion (our sum of Meta's own figures).
What Meta owns now
Property and equipment is now more than half of the balance sheet. Net property and equipment was $225.72 billion at 30 June 2026, against total assets of $449.96 billion.
And a large part of it is not being depreciated yet. Of $292.87 billion of gross property and equipment, $80.35 billion was construction in progress, up from $50.52 billion six months earlier. That is 27.4% of the gross figure. By Meta's own accounting policy, assets in construction in progress are not depreciated until they are placed in service.
A dollar of FY2025 earnings per share came from an accounting estimate. Meta's FY2025 10-K says that in January 2025 it extended the estimated useful life of most servers and network assets to 5.5 years, which reduced FY2025 depreciation by $2.92 billion and added $1.00 per diluted share to FY2025 net income. Meta made a similar change in January 2023. Both 2026 10-Qs report no material change to accounting policies since the 10-K, so there was no such extension in January 2026.
Depreciation and amortisation is already climbing: $12.36 billion in the first half of 2026 against $8.24 billion in the first half of 2025, up 49.9%.
The commitments are larger than the debt. At 30 June 2026 Meta disclosed $278.99 billion of operating and finance leases that had not yet commenced, running to 2036, and said it signed roughly $68 billion more in July 2026. Total non-cancelable contractual commitments were $349.31 billion. None of that is in the debt figure.
The debt itself. Meta owes $84.0 billion of principal at 30 June 2026, $55 billion of it raised since November 2025. The May 2026 notes carry the highest coupons Meta has paid, up to 6.45%. Net interest and other income went from +$919 million in the first half of 2025 to −$1,139 million in the first half of 2026. Cash and marketable securities of $90.26 billion still exceed the $83.66 billion carrying value of the debt, and nothing matures in the rest of 2026.
Where it sits
Meta closed Friday at 751.66, down 3.33% on 25.75 million shares. We found no reported cause for the fall.
From the 18 September close of 665.75 to Friday's close the stock rose 12.9%. Most of that was one session: +11.3% on Monday 21 September, which was reported as a Wells Fargo analyst note plus Muse reaching number one on the US App Store. A JP Morgan note was reported on Thursday 24 September, the day after the Connect keynote, when the stock rose 4.50%. Muse itself was announced on 8 September, and the stock went from 644.38 that day to 648.03 on 11 September. The launch did not move it over 8 to 11 September; the big session came thirteen days after the announcement.
On the chart the stock is above all three daily averages (the 50-day at 615.75, the 100-day at 609.73, the 200-day at 626.47), above the weekly support band at 609.33 to 623.88, and above the weekly 100-period average at 642.19. Those levels are clustered between 609 and 643, roughly 15% to 19% below Friday's close. Daily RSI at Friday's close was 71, having peaked at 80.5 on 24 September. Weekly RSI was 64. The 52-week high of 779.82 is 3.6% above Friday's close, and the only one of these levels overhead. The close is 44.3% above the 52-week low of 520.26.
The New Mexico verdict
On 25 September 2026 a jury in the First Judicial District Court, Santa Fe County, in State of New Mexico v. Facebook, Inc., found about 43.9 million violations of New Mexico's Unfair Practices Act, and found them willful. The count is statements multiplied by consumers reached, not a number of people. The case concerns data practices, content moderation, misinformation and hate speech.
This is liability only. No damages have been awarded. The Attorney General's own release says the penalty amount is left to the judge, in a later phase of the case. We could not confirm a date for that phase.
The only publishable figure is Meta's own. Its Q2 10-Q, filed 30 July 2026, says the Attorney General "intend[s] to seek up to $62.85 billion in penalties" in this case. That is a demand, not an award, and it is less than 3.3% of Friday's market value on the share count in that 10-Q.
Meta has filed no 8-K about the verdict, and there is no accrual for it in the filings. A Meta spokesperson told Source New Mexico the company disagrees with the verdict and will continue to defend itself. This is a different case from Meta's New Mexico child-safety case, which went to a jury in March 2026.
The date on the calendar
Very little is dated in front of this stock, and that is itself worth knowing.
- The $0.525 quarterly dividend is payable 28 September 2026.
- Meta has not announced a third-quarter earnings date. Its investor events page says only that upcoming events are to come.
- The New Mexico penalty phase has no date we could confirm.
The question
In the second quarter of 2026 Meta spent almost all of the cash its operations brought in on property and equipment, bought back no stock, and sold bonds. In the second quarter of 2025 it generated $8.5 billion of free cash and bought back $10.17 billion of stock.
What we still don't know:
- Why the buyback stopped, and whether it restarts. The filings give the fact and not the reason.
- Whether any of the $2.40 billion of Q2 legal charges relates to New Mexico. Meta doesn't say, so nobody outside the company can tell whether the verdict is partly provided for.
- What the second-half free cash flow will be. Guidance implies second-half capex well above the first half's, and there is no operating cash flow guidance to set against it.
- Whether the server useful life gets extended again. Meta did it in January 2023 and January 2025, each time cutting depreciation. It did not in January 2026, and has disclosed nothing either way for January 2027.
- What Muse earns. Meta has disclosed a product with subscription plans, and no revenue, users or pricing in any filing.
Next checkpoint: Meta's third-quarter 10-Q, not yet dated. It is the first filing that has to show whether the buyback stayed at zero, whether anything was accrued for New Mexico, and where second-half capex actually landed.