Meta Platforms beat market expectations for second-quarter revenue on Wednesday and issued a rosy sales forecast for the third quarter, signalling that robust digital-ad spending on its social media platforms can cover the cost of its artificial-intelligence investments.

The Facebook and Instagram parent said it anticipates third-quarter revenue in the range of $38.5 billion to $41 billion, the midpoint of which is higher than analysts’ estimates of $39.1 billion, according to LSEG data, a Reuters report stated.

Revenue rose 22 percent to $39.1 billion for the April to June period, Meta said, compared with analysts’ expectations of $38.3 billion.

Meta Chief Financial Officer Susan Li told analysts on a call that the company was “continuing to see healthy global advertising demand” and was also reaping the fruits of a multiyear project to use artificial intelligence to improve targeting, ranking and delivery systems for digital ads on its platforms.

Li and Chief Executive Mark Zuckerberg said those tools would continue to drive growth in the coming two years, while new generative AI features like chat assistants would take longer to monetize.

“Any apprehensions investors may have had about Meta‘s spending on AI and the metaverse are likely to be allayed by this quarter’s results,” said eMarketer analyst Max Willens.

Although Meta’s costs rose 7 percent in the second quarter, its revenue jump topped expense growth substantially and led to a 9-point rise in operating margin, to 38 percent from 29 percent.

Family daily active people (DAP), a metric used by the company to track how many unique users per day open any one of its apps, was likewise up 7 percent year-over-year to an average of 3.27 billion for June.

Meta’s earnings come after disappointing results posted by fellow tech industry powerhouses which suggested the payoff from hefty investments in AI technology may take longer than Wall Street had hoped.

The social media giant also signalled it would continue to spend big on AI infrastructure, anticipating 2024 capital expenditure would come in between $37 billion and $40 billion, up $2 billion at the lower end from its previous forecast of $35 billion to $40 billion.

It left its total expense forecast for the year unchanged at $96 billion to $99 billion, while cautioning that infrastructure costs would continue to be a “significant driver” of expense growth in 2025.

Threads nears 200 mn MAU: Meta Founder and CEO Mark Zuckerberg announced that Threads, the rival platform to X, is on the verge of reaching 200 million monthly active users (MAUs). This milestone reflects the company’s continued progress in developing Threads into a significant social app, a IANS report said.

During Meta’s Q2 earnings call, Zuckerberg highlighted that WhatsApp now serves over 100 million MAUs in the US. He also noted robust year-over-year growth across Facebook, Instagram, and Threads, both domestically and internationally, IANS reported.

Meta’s family of apps continues to expand, with approximately 3.27 billion people using at least one of its apps daily as of June. The Q2 total revenue for Meta’s family of apps reached $38.7 billion, marking a 22 percent year-over-year increase. Advertising revenue alone accounted for $38.3 billion, reflecting a 22 percent rise, or 23 percent on a constant currency basis.

Zuckerberg emphasized the company’s commitment to enhancing user experience and delivering innovative features across its platforms, ensuring sustained growth and engagement.