Below is a roundup of last week’s notable industry news, with summaries and our opinions. To make sense of Q2 earnings, we revisit the “AI earners & AI burners” storyline yet again!

Meta (👎): Revenue was up 28% to $60.80B, beating estimates. Ad revenue was up 27% as daily active users across Meta's apps increased 3% year over year. Free cash flow shrank to $784M, down from $8.55B last year, due to AI spending. Q3 guidance underwhelmed. Shares fell 10% in after-hours trading. 

Microsoft (👍): Revenue was up 18% to $90.01B, beating estimates. Azure revenue was up 43%, beating expectations and topping $100B in annual revenue for the first time. Microsoft Copilot passed 30M paid seats, up from 20M in April. Current quarter guidance beat estimates. Shares rose 8% in extended trading. 

Amazon (👍): Revenue was up 20% to $200.6B, beating estimates. AWS revenue was up 37%, beating estimates and marking its fastest growth since 2021. Ad revenue was up 26% to $19.8B, beating estimates. Amazon raised its 2026 capex forecast to $220B, citing rising memory costs and AI demand. Q3 guidance missed estimates. Shares rose 10+% in extended trading.

Reddit (🤷): Revenue was up 61% to $805M, beating estimates. Ad revenue was up 64% to $762M. Daily active users were up 18% to 130.3M, beating estimates. Q3 revenue guidance topped estimates. CEO Steve Huffman called search referral traffic "choppy," raising concerns about Reddit's reliance on Google. Shares fell 11% in after-hours trading.

Spotify (👎): Revenue was up 14% to $5.5B, narrowly missing estimates. Premium subscribers hit 300M for the first time. Ad revenue increased just 1% to $513M, and monthly active users undershot guidance at 777M. Q3 guidance missed estimates. Shares fell roughly 6%.🔒

Snap (👍): Revenue was up 19% to $1.6B, beating estimates. CEO Evan Spiegel cited momentum in the ads business. Daily active users grew 5% to 493M, beating estimates. Q3 guidance topped estimates. Shares jumped 8% in extended trading.

Pinterest (🤷): Revenue was up 18% to $1.18B, beating estimates. Global monthly active users hit an all-time high of 640M, up 11% and topping estimates. Q3 guidance met estimates, with execs saying that Amazon Prime Day's shift from Q3 to Q2 will be a headwind for Q3. Shares fell 7% in extended trading.

Zeta Global (🤷): Revenue was up 44% to $443M, beating estimates. “Super-scaled” customer count grew 17% to 197. Zeta raised full-year revenue guidance, beating estimates. Investors seemed to want more. Shares fell about 6% in after-hours trading.

MNTN (🤷): Revenue was up 21% to $82.5M, beating estimates, but MNTN missed big on earnings-per-share forecasts: $0.11 vs. $0.22. MNTN swung to net income of $6.7M from a year-ago loss. MNTN's board authorized a $100M stock buyback. Q3 guidance met expectations. Shares fell about 6% in after-hours trading.

Apple (👎): Revenue was up 16% to $109.42B, beating estimates. iPhone revenue was up 22% to $54.25B. Services revenue, which includes advertising, was up 12% to $30.74B, missing estimates. Apple issued weak current-quarter guidance, citing supply constraints from a global memory shortage. Shares fell 6+% in extended trading.

Stagwell (👍): Organic net revenue was up 5%, driven by digital transformation services, which grew 18% organically. The challenger agency holding company posted a record $171M in net new business wins, including IBM, Adobe, Mondelez and Heineken. Shares finished 5% higher.

People Inc. (👍): Revenue was down 1% to $436.7M, beating estimates. Digital revenue rose on higher licensing and performance marketing sales, offset by continued print declines. Profit more than doubled to $506.9M, boosted by its MGM stake. People reaffirmed full-year guidance. Shares rose 7%.

Opinion: It seems as though the market doesn't really care about ad revenue that much anymore. All that matters is the AI story: is the company an "AI burner" or an "AI earner"?

Pretty much every ad business had a good quarter. Meta's ads grew 27%. Amazon's ads grew 26%. Reddit's ads grew 64%. Those are GREAT numbers! But the market rewarded some of these companies and punished others.

Amazon and Microsoft got rewarded. Amazon's ad growth was nice, but the real story was AWS, up 37% YoY, a business that is generating real AI infrastructure revenue growth with no end in sight. Microsoft didn’t really even have an ad story, it was all about Azure crossing $100B in annualized revenue, with growth accelerating to 43%, which sent the stock up 8%.

Meta, Reddit, and Apple got crushed. Meta doesn't have a real AI infrastructure play yet, just reports that it's building "Meta Compute" to resell spare AI capacity (a rumor that popped the stock 9% in July). Reddit doesn't even have a rumor. Apple doesn't either; it's just watching AI eat its memory chip supply, which is turning out to be its own expensive problem.

Then there's Google, which is becoming a complicated company. Google Cloud grew 82%, making it an "AI earner" by definition. But Google’s always predominantly been an ad business and investors can't tell which of its AI investments are paying for Cloud's growth vs. consumer-facing AI products and ads. Hence the 6% stock price drop.

For marketers: your ad dollars aren't getting shareholders paid anymore. The AI infrastructure story is. That reduces your leverage. Will ad revenue become a number that gets optimized in the background, marketers’ wishes and desires be damned? Watch for pricing and ad load to creep up, especially at companies like Meta and Reddit. They need ad dollars to work harder than ever while figuring out how to become “AI earners”.

Disney selling 50% A+E stake to Hearst for more than $1B - Hearst already owns half of A+E Global Media, which includes A&E, History Channel, and Lifetime, and this deal would hand it the rest. Analysts see it as a sign Disney could be inching toward exiting linear TV altogether, following Comcast's lead.

Teads sues Google, cites 6.88T ad impressions loss - Teads joins a number of other SSPs🔒 in  alleging that Google illegally tied its buying tool and publisher ad server tools to AdX, squeezing out Teads and other rival exchanges and ad servers. Teads said some unlawful practices like “Last Look” are still happening🔒.

AI agents are giving publishers a new way to monetize their data - PubMatic and Optable are teaming up on an end-to-end agentic workflow that lets publishers package and sell their first-party data.

LiveRamp adds Meta to Cross-Media Intelligence - Marketers can now pull Meta campaign data, including de-duplicated attribution and incrementality results, into the same view as their CTV, programmatic, social, and audio spend.

BMW car dashboards blasted with Spider-Man: Brand New Day pop-ups because if there's a screen someone will force ads onto it - BMW owners are seeing Spider-Man ads on their dashboard screens, two years after a BMW SVP said cars would never carry ads because they're "a private space".

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