Meta Platforms (NASDAQ: META) saw a significant rise in its stock price following the release of its second-quarter earnings, beating Wall Street expectations and providing an optimistic forecast for the upcoming quarter.

For the second quarter ending June 30, Meta reported earnings of $5.16 per share, surpassing the $4.73 per share expected by analysts. Revenue reached $39.07 billion, compared to the anticipated $38.31 billion, marking a robust 22% increase from the same period last year when revenue stood at $32 billion. This quarter’s performance marks the fourth consecutive quarter of revenue growth exceeding 20%.

Meta’s net income also saw a substantial increase, jumping 73% to $13.47 billion from $7.79 billion, or $2.98 per share, a year earlier.

Advertising continues to be Meta’s core revenue driver, with advertising revenue rising 22% year-over-year. This growth is particularly notable given the competitive landscape, highlighted by Alphabet’s recent report of an 11% increase in Google ad sales, with YouTube falling short of expectations. Meta’s strong advertising performance is largely driven by its popular platforms, Facebook and Instagram.

Mark Zuckerberg, Meta’s CEO, stated, “We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year. We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps.”

Meta’s operational efficiency has seen significant improvements, with operating income climbing 58% to $14.9 billion, and the operating margin expanding to 38% from 29% in the previous year. These figures reflect the company’s aggressive cost-cutting measures, including the elimination of approximately 21,000 jobs since late 2022. As of June 30, Meta’s headcount stood at 70,799, a 1% decrease from the previous year.

Despite the layoffs, Meta has been investing heavily in advanced technologies such as artificial intelligence (AI) and virtual reality (VR). The company reported capital expenditures of $8.47 billion for the quarter, below the $9.51 billion estimated by analysts. However, Meta has maintained its annual expense outlook at $96 billion to $99 billion, with capital expenditures projected between $37 billion and $40 billion.

Zuckerberg has emphasized the importance of these investments, particularly in AI. Earlier this year, Zuckerberg said that Meta’s computing infrastructure will include 350,000 Nvidia H100 graphics cards by the end of 2024, a significant investment in the computational power needed for AI development. Additionally, Meta has launched the latest version of its Llama AI model, featuring a version with 405 billion parameters, showcasing its commitment to staying ahead in the AI race.

Meta also reported that 3.27 billion people used its apps daily during the quarter, meeting estimates. This metric reflects the number of users engaging with any of Meta’s apps, including Facebook, Messenger, Instagram, and WhatsApp.

Looking ahead, Meta provided revenue guidance for the third quarter of 2024, estimating between $38.5 billion and $41 billion, with the midpoint of $39.75 billion slightly above analysts’ expectations of $39.1 billion.

The company also acknowledged ongoing regulatory challenges, particularly in the EU and the U.S., which could impact its operations and financial results. “We continue to monitor an active regulatory landscape, including increasing legal and regulatory headwinds in the EU and the U.S. that could significantly impact our business and financial results,” the company noted in its report.

A group of advertisers has recently filed a $7 billion lawsuit against Meta, alleging that the company inflated its “potential reach” metrics for advertising campaigns on Facebook and Instagram. The lawsuit claims that Meta knowingly misrepresented the number of users who could potentially see ads, resulting in significant financial losses for advertisers. The 9th U.S. Circuit Court of Appeals in San Francisco has ruled that the advertisers can proceed with their legal action, accusing Meta of overstating the platforms’ potential reach by as much as 400%.

Meta’s stock has risen 34% year-to-date, significantly outperforming the Nasdaq’s gains.

Meta last traded at $474.83 on the NASDAQ.

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