AI bets pay off as Meta delivers US$18.3bil profit in Q2
The Facebook and Instagram owner's share price soared as much as 12 per cent in after-hours trading, with investors buoyed by the company's growing advertising business and a rise in users across its family of platforms.
"We've had a strong quarter both in terms of our business and community," said CEO Mark Zuckerberg. "I'm excited to build personal superintelligence for everyone in the world."
Meta posted a net profit of US$18.3 billion, compared with US$13.5 billion in the same period last year. The results exceeded Wall Street expectations as advertising revenue climbed a stellar 21 per cent to US$46.6 billion.
Meta's Family of Apps segment, which includes Facebook, Instagram, WhatsApp and Messenger, saw daily active users reach 3.48 billion in June, up 6 per cent from a year earlier.
The company significantly increased its capital expenditures to US$17 billion in the quarter, primarily for AI infrastructure investments. Meta projects total 2025 capital spending between US$66 billion and US$72 billion.
Zuckerberg has embarked on a major AI spending spree, poaching top researchers with expensive pay packages from rivals like OpenAI and Apple as he builds a team to pursue what he calls AI superintelligence.
"To win the superintelligence race requires the best of the best talent and Meta's been on a roll when it comes to recruiting top AI talent. Money talks and Meta has plenty of it," said Forrester research director Mike Proulx.
The big question is whether Wall Street will continue backing the expensive strategy.
Meta is locked in a bitter rivalry with other tech behemoths as they invest heavily in AI, aiming to ensure the technology benefits society and generates profits in the not-so-distant future.
Most analysts believe Meta will make the investment pay off by improving its advertising efficiency and creating new opportunities, such as with its smart glasses through a partnership with Ray-Ban maker EssilorLuxottica.
"Capital expenditures are still shockingly high, but with these strong results, Meta has bought itself more time with investors," said Debra Aho Williamson, chief analyst at Sonata Insights.
However, others signal that Meta's AI spending spree needs a clearer sense of direction.
A strong quarter "won't shield Meta from questions concerning the company's future as it breathlessly tries to keep up in the AI race," said Emarketer analyst Minda Smiley.
Another reason that Zuckerberg's spending bonanza may raise eyebrows is because it echoes his previous leap into spending vast amounts on virtual reality and entering the metaverse, with the CEO even changing the company's name from Facebook to Meta to reflect the strategy change.
The bleeding continued in that segment, with the Reality Labs division, Meta's virtual and augmented reality unit, posting significant losses.
The unit lost US$4.5 billion in the quarter on revenue of just US$370 million, highlighting ongoing challenges in the metaverse business.
Zuckerberg's AI team is headed by Alexandr Wang, the former CEO of Scale AI, a startup in which Meta invested US$14.3 billion at the beginning of the company's spending blitz in June.
Hours before the earnings report, Zuckerberg insisted that the attainment of superintelligence is now "in sight."
In a post outlining Meta's AI strategy, Zuckerberg signaled that the remainder of the decade would be a transformative period for artificial intelligence development and that the company's priority was to bring AI to its users.
"There's no other company that is as good as us at taking something getting it in front of billions of people," he told analysts.--AFP
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Income Statement (In thousands of US$)(unaudited) Three-month period ended June 30, Six-month period ended June 30, 2025 2024 2025 2024 Revenue 69,063 77,884 124,073 154,973 Gross profit (1) 14,126 17,916 21,855 34,728 As a percentage of sales 20.5 % 23.0 % 17.6 % 22.4 % EBITDA 14,005 16,391 21,031 33,964 As a percentage of sales 20.3 % 21.0 % 17.0 % 21.9 % Operating profit 9,689 12,116 12,583 24,740 As a percentage of sales 14.0 % 15.6 % 10.1 % 16.0 % Net profit for the period 6,015 7,809 7,042 16,273 Attributable to: Equity holders of the Company 6,336 7,760 7,880 16,606 Non-controlling interests (321) 49 (838) (333) EPS (in US cents) Basic 6.43 7.87 7.99 16.84 Diluted 6.34 7.70 7.87 16.48 (1) This line item includes amortization and depreciation expenses related to operations Highlights – Q2 2025 Revenue Total revenue in Q2 2025 was US$69.1 million, compared to US$77.9 million in Q2 2024. At constant exchange rates, revenue decreased by US$5.8 million. 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Activity in North America declined by 21% to US$25.3 million in Q2 2025, compared to US$32.1 million in Q2 2024. This decrease was primarily driven by the discontinuation of certain client programs and delays in starting new contracts. Asia Pacific delivered growth with revenue reaching US$24.7 million, up 11% compared to Q2 2024. This strong performance reflects the ongoing success of operations and the continued commissioning of new proprietary rigs. Revenue in South America was US$11.3 million, compared to US$18.2 million in Q2 2024. In Chile and Argentina, the Company started new long-term contracts during the quarter, which are currently in the mobilization and learning curve phases, impacting both revenue and margins. In Brazil, operations were affected by disruptions in the mobilization process caused by client-driven delays. In the EMEA region, revenue was US$7.8 million in Q2 2025, compared to US$5.3 million in Q2 2024. Revenue in Africa and Europe grew by 47%, supported by the start of contracts that are significant for the region. Overall, rig utilization rate in Q2 2025 was 35% compared to 40% in Q2 2024. H1 2025 H1 2025 revenue totaled US$124.1 million, down from US$155 million in H1 2024. In Asia Pacific, the Company's first-largest revenue contributor, H1 2025 revenue amounted to US$45.0 million, marking the best first half ever with a 22% increase compared to H1 2024. This growth is primarily attributable to successful operations and the commissioning of new proprietary rigs. North America, the Company's second revenue contributor region, declined by 27%, The decrease was primarily due to the discontinuation of certain client programs and delays in starting new contracts. Revenue in South America totaled US$21.4 million in H1 2025, down 51% from US$43.8 million in H1 2024. In Chile and Argentina, the Company started new long-term contracts during the period, which are currently in the mobilization and learning curve phases, impacting both revenue and margins. In Brazil, the Company was impacted by disruption in the mobilization process due to client-driven delays. In the EMEA region, revenue slightly decreased by US$0.9 million compared to H1 2024. Excluding the exit from CIS and certain West African countries, the revenue increased by US$4.1 million (41%). Gross profit (In thousands of US$) – (unaudited) Q2 2025 % change Q2 2024 H1 2025 % change H1 2024 Reporting segment Mining 10,336 -33 % 15,396 14,376 -53 % 30,842 Water 3,790 50 % 2,520 7,479 92 % 3,886 Total gross profit / (loss) 14,126 -21 % 17,916 21,855 -37 % 34,728 Q2 2025 The Q2 2025 gross margin, including depreciation within cost of sales, was US$14.1 million (20.5% of revenue), or US$15.1 million (21.9% of revenue) when excluding one-off costs, compared to US$17.9 million (23.0% of revenue) in Q2 2024. The decline in the mining segment's gross margin was primarily due to the phasing and ramp-up of new contracts, which are typically associated with lower initial margins. In contrast, gross profit in the water segment was supported by the deployment of new proprietary rigs on long-term contracts. H1 2025 The H1 2025 gross margin including depreciation within cost of sales was US$21.9 million (or 17.6% of revenue) compared to US$34.7million (or 22.4% of revenue) in H1 2024. Selling, General and Administrative Expenses (In thousands of US$) – (unaudited) Q2 2025 % change Q2 2024 H1 2025 % change H1 2024 Selling, general and administrative expenses 4,726 -19 % 5,800 9,561 -21 % 12,099 Q2 2025 SG&A expenses were reduced by 19% versus the prior-year quarter. As a percentage of revenue, SG&A improved to 6.8% from 7.4% in Q2 2024. H1 2025 SG&A decreased 21% compared to last year. As a percentage of revenue, SG&A remained stable at approximately 7.8% of revenue. Operating result (In thousands of US$) – (unaudited) Q2 2025 % change Q2 2024 H1 2025 % change H1 2024 Reporting segment Mining 6,692 -35 % 10,234 6,887 -69 % 22,149 Water 2,997 59 % 1,882 5,696 120 % 2,591 Total operating profit / (loss) 9,689 -20 % 12,116 12,583 -49 % 24,740 Q2 2025 The operating profit was US$9.7 million compared to US$12.1 million in the same quarter last year. Foraco sold its 50% stake in its Kazakh subsidiary, Eastern Drilling Company LLP, generating a net gain of US$289 thousand, which was recorded under 'Other Operating Income' in the Company's consolidated financial statements for Q2 2025. H1 2025 The H1 2025 operating profit was US$12.6 million compared to US$24.7 million in H1 2024. Financial position The following table provides a summary of the Company's cash flows for H1 2025 and H1 2024: (In thousands of US$) H1 2025 H1 2024 Cash generated by operations before working capital requirements 21,032 33,964 Working capital requirements (7,893) (23,497) Income tax paid (7,565) (6,264) Purchase of equipment in cash (9,777) (9,978) Free Cash Flow before debt servicing (4,203) (5,775) Proceeds from / (repayment of) debt 2,894 1,796 Interests paid (2,877) (3,931) Acquisition of treasury shares (721) (556) Deconsolidation of EDC Russia & Kazakhstan Dividends paid to non-controlling interests (5) – (2,076) (330) Net cash generated / (used in) financing activities (709) (5,097) Net cash variation (4,912) (10,872) Foreign exchange differences 1,325 (1,458) Variation in cash and cash equivalents (3,588) (12,330) Cash and cash equivalents at the end of the period 20,775 21,959 In H1 2025, the cash generated from operations before working capital requirements amounted to US$21.0 million compared to US$33.9 million in H1 2024. During the same period, working capital requirements were US$7.9 million, a decrease compared to the same period last year, primarily driven by tightened control on working capital management and the reduction in activity. During the period, Capex totaled US$9.8 million in cash compared to US$10.0 million in H1 2024. Capex primarily relates to new rigs, and the acquisition of ancillary equipment and rods to support new contracts. Strategy The Company's strategy is to assist its customers in exploring or managing their deposits throughout the entire cycle, with a special focus on the life of mine activity. The Company intends to continue developing and growing its services across the world with a focus on stable jurisdictions, high tech drilling services, optimal commodities mix including battery metals and gold – with a significant presence in water related drilling services – and a gradual implementation of remote-controlled rigs and other advanced digital applications. The Company expects to execute its strategy primarily through organic growth and targeted acquisitions. The Company addressed the environmental, social and governance (ESG) requirements, and implemented a pragmatic and measurable approach to ESG with quantitative KPIs to maximize improvement and efficiencies. Currency exchange rates. The exchange rates for the periods under review are provided in the Management's Discussion and Analysis of Q2 2025. Non-IFRS measures EBITDA represents Net income before interest expense, income taxes, depreciation, amortization and non-cash share based compensation expenses. EBITDA is a non-IFRS quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations. The Company believes that the presentation of EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the drilling industry. EBITDA is not defined in IFRS and should not be considered to be an alternative to Profit for the period or Operating profit or any other financial metric required by such accounting principles. Net debt corresponds to the current and non-current portions of borrowings and the consideration of payables related to acquisitions, net of cash and cash equivalents. The Company's lease obligations are included in the net debt calculation. Reconciliation of the EBITDA is as follows: (In thousands of US$) (unaudited) Q2 2025 Q2 2024 H1 2025 H1 2024 Operating profit / (loss) 9,689 12,116 12,583 24,740 Depreciation expense 4,154 4,173 8,137 9,020 Non-cash employee share-based compensation 162 102 312 204 EBITDA 14,005 16,391 21,031 33,964 Conference call and webcast On July 31, 2025, Company Management will conduct a conference call at 10:00 am Eastern Time to review the financial results. The call will be hosted by Tim Bremner, CEO, and Fabien Sevestre, CFO. You can join the call by dialing 1-888-836-8184 or 1-289-819-1350. You will be put on hold until the conference call begins. A live audio webcast of the Conference Call will also be available An archived replay of the webcast will be available for 90 days. About Foraco International SA Foraco International SA (TSX: FAR) is a leading global mineral drilling services company that provides a comprehensive and reliable service offering in mining and water projects. Supported by its founding values of integrity, innovation and involvement, Foraco has grown into the third largest global drilling enterprise with a presence in 16 countries across five continents. For more information about Foraco, visit 'Neither TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release.' Caution concerning forward-looking statements This document may contain 'forward-looking statements' and 'forward-looking information' within the meaning of applicable securities laws. These statements and information include estimates, forecasts, information and statements as to Management's expectations with respect to, among other things, the future financial or operating performance of the Company and capital and operating expenditures. Often, but not always, forward-looking statements and information can be identified by the use of words such as 'may', 'will', 'should', 'plans', 'expects', 'intends', 'anticipates', 'believes', 'budget', and 'scheduled' or the negative thereof or variations thereon or similar terminology. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed under the heading 'Risk Factors' in the Company's Annual Information Form dated March 2, 2025, which is filed with Canadian regulators on SEDAR ( The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to Foraco or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.
